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Bitcoin miners made millions in fees in Q2, thanks to…

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Bitcoin miners made $184 million from transaction fees in Q2 2023— far more than what the miners made throughout 2022.

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  • Q2 2023 is the first quarter to exceed the $100 million mark since Q2 2021.
  • The figure is more than five times the fees earned during the preceding five quarters combined.

Bitcoin [BTC] miners made $184 million from transaction fees in the second quarter of 2023. The amount is far more than what the miners made throughout 2022.

The finding is based on a report published by the cryptocurrency analytics platform Coin Metrics on 5 July.

Q2 2023 is the first quarter to exceed the $100 million mark since Q2 2021. The payout amount of $184 million reflects a surge of more than 270% from Q1 2023. In fact, the figure is more than five times the fees earned during the preceding five quarters (Q1 2022- Q1 2023) combined.

bitcoin mining

Source: Coin Metrics

However, the transaction fees accounted for only 7.7% of the total $2.4 billion that miners earned during the last quarter.

The report attributed this surge in transaction fees to Bitcoin’s recent price rally and the introduction of BRC-20 token standard and Ordinals.

BRC-20 and Ordinals benefit Bitcoin miners

The BRC-20 token was announced in March 2023. It employs Ordinals inscriptions to mint and transfer fungible tokens on the Bitcoin network. This new class of tokens is modelled after Ethereum’s [ETH] ERC-20 token standard. Since their introduction, the market capitalization of BRC-20 tokens has risen to more than $240 million.

Bitcoin Ordinals was launched in January 2023. Ordinals is a Bitcoin protocol allowing people to create NFT-like assets on the network by inscribing data to a single satoshi. Satoshi is the smallest unit of currency that we can divide Bitcoin into, i.e. 1/100,000,000 of one unit of BTC.

Bitcoin miners also benefited from better macro-economic conditions in last quarter, with “receding inflation pressures” leading to lower power rates for U.S.-based miners, the report mentioned.

The report also added that payout amounts related to transaction fees have dwindled as the excitement around BRC-20s tokens ebbs. Nonetheless, the amount of compensation miners receives from transaction fees remained substantial.

However, as Bitcoin’s hashrate has continued to achieve new all-time highs over the last 12 months, competition in the mining fee market has tightened.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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