BRC-20 And Ordinals Boon For Bitcoin Miners
Bitcoin miners have experienced a highly profitable second quarter of 2023, earning an impressive revenue of $184 million. This surge in profits can be attributed to the increasing popularity and demand for BRC-20 tokens and the Ordinals protocol. The fee market for Bitcoin miners used to be uneventful, but it has now turned around and generated significant transaction fees for miners. The market has seen more transaction fees in the second quarter than in the previous five quarters combined.
What Is Ordinals Protocol?
The Ordinals protocol, launched in early 2023, allows users to create NFT-like assets on the Bitcoin network by inscribing data to a single ‘satoshi.’ This protocol faced some criticism from the crypto community initially but has gained popularity, especially after MicroStrategy co-founder highlighted its role in generating profits for BTC miners.
Transaction Fee Surge Due To BRC-20
BRC-20 tokens, inspired by Ethereum’s ERC-20 tokens, have reached a market capitalization of over $240 million since their launch in March. Users need to submit a transaction with a fee to mint these tokens on the Bitcoin network. This has led to a surge in BTC’s transaction fees, particularly in May, as people paid higher fees to expedite their transactions. Some speculated that the network was under attack during this period.
Miners Continue To Profit
Bitcoin miners have earned more revenue from transaction fees than block subsidies for the first time since 2017. Despite a decline in payout amounts associated with transaction fees due to decreased enthusiasm for BRC-20 tokens, miners still receive substantial funds compared to previous years. The demand for Bitcoin block space remains persistent, allowing miners to make significantly more from transaction fees than in previous years.
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