- The network was overloaded with more than 232,000 transactions waiting for approval
- The astronomical increase in fees has been attributed to the launch of the Runes Protocol
Bitcoin [BTC] Earlier in the day, Bitcoin experienced its fourth halving and, contrary to what you might think, miners have been celebrating ever since.
Premiums go down, fees go up
While the rewards given to miners for creating each block halved, they were more than offset by an explosive increase in transaction fees paid by users.
According to AMBCrypto's analysis of Mempool data, the iconic halving block – 840,000 – earned a whopping 37.62 BTCs in fees from miners, worth nearly $2.4 million at prevailing market prices. Combined with the reduced block subsidy of 3.12 BTCs, miners earned more than $2.6 million on the block. Several blocks after the halving also brought in more than a million in fees.
Total fees increased dramatically, surpassing the December ordinals rush and just barely reaching the all-time highs (ATH) in May 2023.
Source: Mempool
At the time of writing, fees per transaction ranged from $50 to $60. In fact, there were more than 232,000 transactions waiting for approval and memory usage exceeded 300MB.
Say hello to Runes
Popular Bitcoin market analyst Dylan LeClair linked the astronomical rise in fees to the new token protocol Runes, which went live with the block halving.
Developed by Casey Rodmarmor, who also introduced the Bitcoin Ordinals concept last year, Runes also allows users to mint tokens on the Bitcoin chain. However, unlike ordinal inscriptions, each runic unit is the same, meaning they can be interchanged.
According to the rune researcher, at the time of going to press, around 1,171 runes were “engraved” – the term for their creation in the chain. The total number of transactions is almost 44,000, generating $12 million in fees.
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Old fault lines are re-emerging
Like Ordinals, the launch of Runes drove a wedge between Bitcoin purists and pragmatists. Dylan LeClair described runes as “pure degenerate speculation” that offers no benefit.
A crypto trader Moon complained about the complexity of the technology, describing it as “complete chaos.”
However, someone else called out
Meanwhile, miners whose revenue streams were affected post-halving are not complaining in the slightest.
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