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- Q2 2023 is the first quarter to cross the $100 million mark since Q2 2021.
- The figure is more than five times the fees earned for the previous five quarters combined.
Bitcoins [BTC] miners generated $184 million in transaction fees in the second quarter of 2023. This is far more than miners generated in all of 2022.
The findings are based on a report published by cryptocurrency analytics platform Coin Metrics on July 5.
Q2 2023 was the first quarter to cross the $100 million mark since Q2 2021. The $184 million payout amount represented a jump of more than 270% from Q1 2023. In fact, it was more than five times the fees earned during the previous period. five quarters (Q1 2022- Q1 2023) combined.
Source: Coin Metrics
However, transaction fees accounted for only 7.7% of the total $2.4 billion earned by miners during the last quarter.
The report attributes this spike in transaction fees to the recent Bitcoin price rally and the introduction of the BRC-20 and Ordinal token standards.
BRC-20 and Ordinals benefit Bitcoin miners
The BRC-20 token was announced in March 2023. It uses the Ordinal inscription to mint and transfer exchangeable tokens on the Bitcoin network. This new token class is modeled after Ethereum [ETH] ERC-20 token standard. Since its introduction, the market capitalization of BRC-20 tokens has increased to over $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 putting data to a single satoshi. Satoshis are the smallest unit of currency that we can divide into Bitcoins, which is 1/100,000,000 of a unit of BTC.
Bitcoin miners also benefited from better macroeconomic conditions in the last quarter, with “reducing inflationary pressures” leading to lower leverage levels for US-based miners, the report said.
The report also adds that the amount of payments related to transaction fees has decreased as the excitement around the BRC-20 token ebbs. Despite this, the amount of compensation that miners receive from transaction fees remains large.
However, as the Bitcoin hashrate has continued to reach new all-time highs over the last 12 months, competition in the mining fee market has become fiercer.
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