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Bitcoin, the largest cryptocurrency by market capitalization and trading volume, sets another record with block 788695 as transactions on its blockchain network spiral out of control.
Recently, there has been an alarming increase in user transactions on the Bitcoin blockchain, resulting in increased network traffic and congestion. This greatly increased the profitability of miners as transaction fees skyrocketed to control the situation.
In an interesting development that the crypto community witnessed yesterday, it was seen that miners made big profits as the transaction fees contained in block 788695 surpassed the block subsidy. This will be the second time in the Bitcoin network that the transaction fee contained in a block exceeds the block subsidy.
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Bitcoin block 788695 sets another record
According to Bitcoin mining reports from Mempool, the transaction fee contained in block 788695 was greater than the block subsidy. Reports show that 6.7 BTC of transaction fees were contained in block 788695, which is more than the block subsidy of 6.25 BTC.
The last time this happened was in 2017, when it was reported that the transaction fee contained in block 500546 exceeded the block subsidy. This phenomenon occurs primarily when the Bitcoin blockchain network receives extremely high network activity from user transactions.
It is believed that miners profit more from these overloaded blocks, which contain a large number of user transactions compared to regular blocks. They create blocks by collecting transactions from the mempool and adding them to a block, and when the blocks are filled, complex mathematical calculations are performed. A miner who solves a mathematical problem receives a transaction fee and a block subsidy.
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The block subsidy refers to the number of new bitcoins created or minted in each block. For each successfully created block, the miner is allowed to mint a fixed amount of new Bitcoins, which is based on the “current supply level as determined by the Bitcoin protocol.”
The subsidy amount per Bitcoin block is determined by the algorithm in its source code and starts at 50 BTC per block, which is halved every four years. The process of splitting the block subsidy, otherwise known as the BTC halving, has shrunk to 6.25 from the 50 BTC where it started and is expected to be split in 2024.
Why are BTC transaction fees increasing?
The spike in BTC transaction fees can be attributed to recent user activity on the blockchain network. Firstly, the introduction of the BRC-20 token standard in the Bitcoin network for the seamless minting of fungible tokens has gained great popularity in the blockchain and cryptocurrency community.
The recent hype around tokens, including meme coins minted using the BRC-20 standard, has led to an increase in FOMO users making numerous token purchases and transactions on the Bitcoin network.
BTC price opens in the red on the daily timeframe | Source: BTCUSD on TradingView.com.
