As a seasoned crypto investor with a deep understanding of the Bitcoin ecosystem, I’ve witnessed firsthand the impact of halving events on miners. The recent 50% reduction in miners’ rewards following the fourth Bitcoin halving event was a significant blow. However, the emergence of decentralized applications (dApps) and their subsequent surge in activity on the Bitcoin blockchain has brought much-needed relief to miners in terms of revenue contribution.
As a crypto investor, I’ve witnessed firsthand how the fourth Bitcoin halving has reduced miners’ rewards by a substantial 50%. But despite this setback, the surge in decentralized application (dApp) activity on the Bitcoin blockchain has brought some consolation in terms of revenue generation for miners.
Bitcoin Miners See Boost In Revenue Streams
As a crypto investor following the insights from Ki Young Ju, CEO of CryptoQuant, I’ve noticed an intriguing change in miners’ income sources. Bitcoin network development has led to a substantial rise in transaction fees’ contribution to miners’ earnings. Two years ago, transaction fees accounted for merely 1% of their total revenue. However, this figure has climbed up to over 7% in the recent past. This trend, which has persisted for the last month, is predicted to strengthen Bitcoin’s foundation and add value to its long-term fundamentals.
Building apps on #Bitcoin has significantly changed miners’ income streams.
Transaction fees now account for over 7% of their total revenue, up from 1% two years ago.
As an analyst, I have observed this trend continuing for the past four weeks, which could potentially fortify the network’s foundations.
— Ki Young Ju (@ki_young_ju) May 7, 2024
As a researcher studying the Bitcoin network, I’ve observed an intriguing trend: the surge in transaction fee revenue. This growth can be linked back to groundbreaking token protocols such as Ordinals and Runes, which have significantly expanded Bitcoin’s capabilities. These advancements enable the generation of both non-fungible tokens (NFTs) and fungible tokens (FTS) directly on the network. Consequently, the volume of transactions has increased noticeably due to this enhanced utility.
The income of a Bitcoin miner derives from two sources: fixed rewards per block and commissions from transactions made by users. With built-in reduction events called halvings, the rewards per block decrease over time. Nevertheless, as transaction fees grow in significance, they might offset the shrinking profitability after each halving event.
BTC Miners Feel The Heat
On the day after the halving event, transactions amounting to over $80 million in fees helped boost miner earnings. During Rune’s peak activity, the average transaction fee on the network reached a high of $40. However, it has since dropped below $10 as Bitcoin network activity settles down.
With fees returning to normal rates, the income miners earn from transaction fees has dropped below $5 million, creating a challenging situation for them. The average Bitcoin miner revenue per terahash per second (TH/s) over the past week has hit rock bottom at $0.048.
In contrast, Bitcoin mining companies are experiencing a surge on Wall Street. With the recent rebound on the stock exchange, shares of Bitcoin mining companies have seen significant gains. Moreover, leading Bitcoin mining companies such as Marathon Digital are implementing strategic moves to enhance mining operations and increase their market dominance.
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2024-05-07 09:36