- The second quarter of 2023 is the first quarter to cross the $100 million mark since the second quarter of 2021.
- The figure is more than five times the fees earned during the previous five quarters combined.
Bitcoin [BTC] miners earned $184 million in transaction fees in the second quarter of 2023. The amount is far more than what the miners earned in 2022.
The finding is based on a report published by the cryptocurrency analytics platform Coin Metrics on July 5.
The second quarter of 2023 is the first quarter to cross the $100 million mark since the second quarter of 2021. The $184 million payout amount reflects an increase of more than 270% from the first quarter of 2023. The figure is even more than five times the fees earned during the previous five quarters (Q1 2022- Q1 2023) combined.
Source: Coin Metrics
However, transaction fees accounted for just 7.7% of the total $2.4 billion miners earned in the past quarter.
The report attributed this increase in transaction fees to Bitcoin’s recent price rally and the introduction of the BRC-20 token standard and Ordinals.
BRC-20 and Ordinals benefit Bitcoin miners
The BRC-20 token was announced in March 2023. It uses Ordinals inscriptions to store and transfer fungible tokens on the Bitcoin network. This new class of tokens is modeled after that of Ethereum [ETH] ERC-20 token standard. Since their introduction, the market cap of BRC-20 tokens has risen to more than $240 million.
Bitcoin Ordinals was launched in January 2023. Ordinals is a Bitcoin protocol that allows people to create NFT-like assets on the network by writing data to a single satoshi. Satoshi is the smallest currency we can divide Bitcoin into, at 1/100,000,000 of one unit of BTC.
Bitcoin miners also benefited from better macroeconomic conditions in the past quarter, with “easing inflationary pressures” leading to lower power rates for US-based miners, the report said.
The report also added that the payout amounts related to transaction fees have decreased as the excitement around BRC-20s tokens fades. Nevertheless, the amount of compensation miners receive from transaction fees remained significant.
However, as Bitcoin’s hashrate has hit new all-time highs over the past 12 months, competition in the mining fee market has intensified.