Bitcoin Miners Rake in Massive Profits with Bitcoin NFT and Meme Coin, Reports Bloomberg

By 0xK2 05/22/23 9:02 AM

The emergence of Bitcoin NFTs and Meme coins has led to increased profits for Bitcoin miners, despite opposition from pure Bitcoinists who prefer to use Bitcoin solely as a store of value.

Bloomberg reported on May 21st that Bitcoin miners’ daily revenue, including mining and transfer fees, has surged by up to $40 million. This significant rise in income can be attributed to the congestion of the Bitcoin network, resulting in higher transaction fees.

Jihan Wu, chairman of Bitdeer Technologies Group, a leading cryptocurrency mining company, stated, “The Ordinals protocol has caused a tectonic shift in the Bitcoin mining environment.” The introduction of the Ordinals protocol, developed by Casey Rodarmor, has revitalized Bitcoin miners who had been experiencing a stagnant period. This protocol allows the inclusion of digital content, such as videos, images, and text, into Satoshi, the smallest unit of Bitcoin. Each bitcoin consists of 100 million Satoshis.

Bitcoin mining yield | Source: Bloomberg

Galaxy Digital Holdings predicts that the Bitcoin NFT ecosystem will reach a value of $4.5 billion by 2025. Since the debut of Bitcoin NFTs in March, approximately 25,000 meme coins have been created on the Bitcoin blockchain.

Domo, a blockchain developer, introduced the BRC-20 standard based on the Ordinals protocol, enabling the creation of coins without a smart contract. This standard has been widely utilized for the creation of meme coins. However, recent figures from BRC-20.io indicate that the value of meme coins dropped from close to $1 billion in early May to $582 million.

Sami Kassab, an analyst at Messari Research, believes that the meme coin craze will eventually fade. Nonetheless, Kassab suggests that Bitcoin can be utilized in valuable ways, such as serving as a data availability layer to store important documents requiring permanent retention.

It is important to note that the total issuance of Bitcoin is limited to 21 million coins, with only 10% of the total mining capacity remaining. The expected date for the Bitcoin block reward halving is May 1, 2024, which will reduce the block reward from 6.25 coins to 3.125 coins. At the current mining rate, Bitcoin mining is projected to be completed by 2140.

Following the introduction of the BRC-20 standard, the trend of meme coins has expanded to other cryptocurrencies. The LTC-20 standard for Litecoin and the DRC-20 standard for Dogecoin were introduced in May, further fueling the meme coin phenomenon.

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