Bitcoin Halving Breaks Block Fee Rewards Record with $2.4 Million Generated – But How Big a Deal is Runes?
Inaugural Bitcoin Runes activity send transaction fees soaring. Photo by Ksenia Yakovleva on Unsplash.
Key Takeaways
- Bitcoin’s halving block generated 37.7 BTC in transaction fees.
- The spike in fees was partly driven by high demand for block space from Bitcoin Runes projects.
- The new protocol could rival BRC-20 as the blockchain’s go-to fungible token standard.
On Friday, April 19, Bitcoin’s halving cut the amount of new BTC issued as block rewards from 6.25 to 3.125. But the block that triggered the halving itself, number 840,000, was the most profitable block in Bitcoin’s history. It brought in a total of 40.751 BTC to the lucky mining pool – ViaBTC.
The record-breaking rewards were the result of users spending 37.7 BTC worth around $2.4 million on gas fees to get their transactions included in the halving block, partly fueled by the rush to mint memecoins using the new Bitcoin Runes protocol
Bitcoin Transaction Fees Spike as Runes Launch
Developed by the Ordinals inventor Casey Rodamor, the Runes protocol lets people mint fungible Bitcoin tokens.
The new token standard went live at the moment of the Bitcoin halving. Runes like Satoshi.Nakamoto, RSIC and Wanko Manko were issued on the halving block.
For block 840,000, a surge in transaction activity, including the issuance of Runes, ensured that transaction fees made up over 90% of ViaBTC’s reward for mining it. Throughout the day, transaction fees made up 75% of all rewards. However, the spike in fees soon subsided.
Alvin Kan, COO at Bitget Wallet said: “We’re seeing quite a drastic fluctuation in fees on the Bitcoin network following the halving event.”
Immediately after the halving, gas fees were around 0.0036 BTC, or roughly $240, but it has since fallen to around $34 or even less.
However, overall he noted that the launch of the Runes protocol has been “a boon for miners.”
Transaction Fees Increasingly Important
With new Bitcoin issuance slashed post-halving, miners are now dependent on transaction fees and increases in the price of BTC to make up the difference.
Although Runes transactions aren’t the only driver of Bitcoin transactions fees, the rising prevalence of non-standard transactions (i.e. those that don’t just involve transferring normal BTC between addresses) generally helps to shore up miner’s revenues.
Rudy De La Cruz, General and Strategic Partner at basedVC said: “Transaction fees surpassing new Bitcoin issuance in block rewards signifies the growing importance of fees for miners.
“This trend is likely to continue post-halving as demand for block space and network usage rise.”
RUNES vs. BRC-20
Compared to the more established BRC-20 standard, Runes are much more efficient with block space, making them cheaper to issue and transact with.
On a per-transaction basis, Runes therefore generate fewer fees. But there is an argument to be made that high fees have limited the appeal of BRC-20 tokens. If Runes can overcome this challenge, Bitcoin’s next breakout meme coin may be even more popular than Ordinals tokens like ORDI and SATS.
