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Bitcoin (BTC) miners earned a high $184 million in transaction fees in the second quarter, much more than they earned in all of 2022 when the price of bitcoin rose and BRC-20 tokens flourished.
According to a July 5 report from cryptocurrency analytics platform Coin Metrics, the payout of $184M increased by more than 270% compared to the first quarter of 2023, the first quarter to surpass the $100M mark since the second quarter of 2021. .
Bitcoin miners receive a transaction fee even after validating a new block, the size of which is determined by the amount of data and the user’s need for block space.
Coin Metrics said the spike in fees was driven by the recent spike in Bitcoin prices backing up “high returns,” as well as the emergence of BRC-20, a new token standard for Bitcoin introduced in March that uses Ordinals to mint and transfer fungible tokens across the network. adding:
“The token standard really opens up experimental new use cases for the main types of bitcoin transactions and accelerates the scaling of bitcoin with the Lightning Network.
However, it is worth noting that transaction fees accounted for only 7.7% of the total $2.4 billion earned by miners in the quarter.
The rest came in the form of Bitcoin block rewards, with miners currently receiving a reward of 6.25 BTC for solving each block. This should drop to 3,125 BTC after the next network halving cycle, which is expected to take place in May.
Related: Bitcoin Miners Send Record $128M in Revenue to Exchanges
Bitcoin miners had other reasons to rejoice in the second quarter, according to the firm.
In May, the Bitcoin mining industry “took the win” when the Biden administration blocked a proposed Energy Tax for Digital Asset Mining (DAME).
In this special edition of State of the Network, we take a data-driven look at the most important events that impacted the digital assets industry from Q2 2023.
— CoinMetrics.io (@coinmetrics) July 5, 2023
Coin Metrics noted that Bitcoin miners also experienced an easing of macroeconomic conditions this quarter, as “decreasing inflationary pressures” led to lower electricity prices for US miners.
However, as Bitcoin’s hash rate continues to hit new all-time highs over the past 12 months, competition in the mining fee market is also getting tougher, Coin Metrics explained:
“Competition remains as fierce as ever: Bitcoin hashrate hit a new high during the quarter at 375 EH/s […] We see the overall network efficiency continue to grow with the introduction of modern ASICs such as the S19 XP.”