ViaBTC: Bitcoin’s Ordinals and Runes Hold the Key to Resolving the Mining Subsidy Issue

Bitcoin miners are relying on transaction fees from applications like Ordinals, Runes, and BRC-20s to ensure their profitability in the face of halving events, according to ViaBTC, a cryptocurrency mining pool. The expansion of the Bitcoin network and the growing user base have significantly impacted miners’ fee income from on-chain transactions. Prior to the launch of the Ordinals protocol in January 2023, miners relied on peer-to-peer transaction fees alongside the block subsidy. However, the subsidy halves every 210,000 blocks, which has a long-term impact on miners’ revenue. While mining revenue can increase with the rise in Bitcoin’s price, further development at the application layer will increase network activity and compensate miners more. ViaBTC experienced this firsthand when it mined the halving block at block 840,000, which came with a record-setting 37.6 BTC transaction fee. This high fee was the result of memecoin and nonfungible token enthusiasts competing to inscribe “rare satoshis” and fungible tokens using the new Runes token standard. ViaBTC had anticipated that transaction fees would eventually break the 30, 40, 50 BTC barrier but did not expect to receive such a massive reward at the halving block. While Bitcoin miners made $78.3 million on halving day, they have also earned more from fees than Ethereum stakers and Uniswap liquidity providers in nine of the last 20 days since the halving, according to Crypto Fees. Satoshi Nakamoto, the creator of Bitcoin, predicted that transaction fees would become the main source of compensation for miners as the block subsidy halves. However, the popularity of Ordinals inscriptions, Runes, and BRC-20s has fluctuated, leading to some instability in miner revenue. ViaBTC, which has endured three halving events since its inception in 2016, mines blocks from miners in 118 countries.