Bitcoin miners are currently enjoying a FAT payday, thanks to a new inscription token standard known as BRC-20. This token standard has driven Bitcoin transaction fees to their highest levels since 2017.
On Sunday, May 7, the average transaction count per block hit an all-time high of 4373.26 transactions, while Monday, May 8, witnessed the second-highest at 4197.17. Miners have reaped 2749.95 BTC ($63,212,552) in transaction fees in May alone, versus 2233.14 BTC ($69,264,805) in the first four months of 2023.
The BRC-20 bonanza started bubbling up on Sunday and peaked on Monday. The bidding wars were so intense that some block rewards were over 12.5 BTC – last halving epoch’s block subsidy. It was the first time that transaction fee rewards eclipsed the block subsidy this halving epoch, and hashprice topped out at $129/PH/day on Monday from the fee action, a 72% increase from the prior week.
Despite the high fees, BRC-20s did not lead to all-time high block sizes. In fact, blocks were fuller in February and March, the inception of the inscriptions mania.
The recent transaction fee mania has slung mining revenue back to the levels we saw in May and early June of last year – the final days before Bitcoin’s price fell below $30,000. While hashprice was roughly $120/PH/day back then, now it’s ~$103/PH/day.
Therefore, the recent fee and BTC price action hasn’t put profitability back on par with May 2022. But a 14% decrease isn’t bad when considering that hashrate grew 54% over the same period, along with difficulty.
BRC-20 tokens are carrying those gains forward still – or more specifically, the token standard’s minting incentives and design are fueling the transaction fee boom. The market for inscriptions did the proving last weekend. The average fee-to-block-subsidy ratio over the last week was 33.09%, versus 6.37% the week prior. Compared to the first week of November, when that ratio was 1.9%, last week’s average looks damn good, and this week’s average looks ungodly good. It will be interesting to see how this dynamic continues to play out in the coming weeks.
Read more:
- BRC-20 Tokens Overtake Bitcoin As Meme Coins Surge In Popularity
- Bitcoin Network Overwhelmed By BRC-20 “Junk” Coins: Record Fees And Unconfirmed Transactions
- Strong Surge In BRC-20 Tokens Following Binance NFT’s Announcement Of Bitcoin Ordinals Support