Q2 Sees Bitcoin Miners Earn $184 Million From Transaction Fees

Bitcoin miners scored $184 million from transaction fees in Q2 2023, thanks to Bitcoin's price surge and the rise of BRC-20 tokens.

Bitcoin Miners Earn $184 Million

Bitcoin transaction fees have proven profitable for miners in Q2 2023, with earnings hitting $184 million—a figure greater than the total fees earned in 2022.

This recent surge, which represents a staggering 270% increase from Q1 2023, is attributed to Bitcoin's price increase and the rising popularity of Ordinals and BRC-20 tokens. Q2 2023 stands out as the first quarter to cross the $100 million mark since Q2 2021, as reported by the cryptocurrency analysis platform, Coin Metrics.

Transaction fees per quarter, 2020-2023
BTC miner fee revenue (Source: Coin Metrics)

Transaction fees for Bitcoin miners are earned with every validated block, with the fee amount dependent on block space demand and data volume.

The recent fee increase was propelled by Bitcoin’s price rise, contributing to “top-line revenues”, combined with the implementation of BRC-20 tokens on the Bitcoin network, a standard introduced in March for creating and transferring fungible tokens such as Ordinals inscriptions. Coin Metrics added that the new token standard paves the way for new experimental use cases and facilitates Bitcoin's scalability via the Lightning Network.

However, it's important to note that transaction fees comprised just 7.7% of the total $2.4 billion that miners made over the quarter. The lion's share came from Bitcoin block rewards—currently 6.25 BTC per block, scheduled to halve to 3.125 BTC around May 2024.

Q2 brought some additional victories for Bitcoin miners. In May, a proposed Digital Asset Mining Energy tax from the US administration was blocked, which was considered a win for the industry. Furthermore, easing inflation pressures led to lower electricity costs for miners based in the US.

However, as Bitcoin's hash rate persistently sets new records, competition in the mining fee market is also intensifying. Coin Metrics pointed out that the network's overall efficiency continues to grow due to the adoption of modern ASICs, such as the S19 XP.

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