Bitcoin Halving Impact on Miner Revenue Explained
Recently, the much-awaited Bitcoin Halving took place, marking the fourth such event in the cryptocurrency’s history. Halvings are programmed into the blockchain to reduce the block rewards by half every four years. This event has a significant impact on miner revenue, one of the main sources of income for miners.
Following the latest Halving, miner revenues initially surged to a record $100 million, despite the reduction in block rewards. This spike was attributed to the increase in transaction fees, which compensated for the drop in block rewards.
The Rise of Runes Protocol
On the day of the Halving, the Runes protocol was released, allowing users to mint fungible tokens on the Bitcoin blockchain. Fungible tokens are identical to each other, similar to bitcoins, while non-fungible tokens (NFTs) are unique tokens.
The Runes protocol quickly gained popularity among users, leading to a surge in network activity and transaction fees. The high demand for Runes upon launch drove up transaction fees, reflecting the increased network congestion.
However, data from the on-chain analytics firm CryptoQuant indicates that interest in Runes has since declined, resulting in a cooling-off period for transaction fees and network activity.
Impact on Bitcoin Mining Revenue
Due to the drop in interest in Runes and subsequent decline in transaction fees, Bitcoin mining revenue has decreased to $50 million from its peak of $100 million post-Halving. This decrease in revenue has put pressure on miners who were benefiting from temporary support provided by the Runes protocol.
Bitcoin Price Status
As of the latest data, Bitcoin is currently trading around $63,900, experiencing a slight decrease of over 1% in the past week.
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