The Bitcoin network is experiencing intense activity with the speculative frenzy around Ordinal’s BRC-20s. This influx has created real network congestion, leading to a drastic increase in transaction costs. Yesterday, block number 788695 broke an all-time high by hitting 6.7 bitcoins in fees, surpassing the block subsidy of 6.25 bitcoins.
Block number 788695 records more transaction fees than block rewards
As you know, Bitcoin is a decentralized currency that relies on miners to secure the network. These miners run their machine around the clock and get a reward for their services.
In reality, Bitcoin miners have two sources of income. The first is the block subsidy, which involves receiving 6.25 bitcoins approximately every 10 minutes. However, this value is halved every four years in an event known as the bitcoin halvening.
The second source is transaction fees. Users have the option to add fees to each bitcoin transaction. The higher the demand for bitcoins, the more users need to increase their fees if they want their transaction to be processed quickly.
With the rise of Bitcoin Ordinals and the recent appearance of BRC-20 standard tokens, the network has seen dramatic growth in its business. However, this surcharge has led to an unprecedented rise in transaction fees. According to the Cryptocurrency Statistics website BitInfoChartsthe transaction fees reached an average of $19, which seems quite high.
But the highlight of the show happened yesterday at midnight. Block transaction fees 788695 exceeded the block reward, reaching an astronomical sum of 6.7 bitcoins! So, the lucky miner of this block pocketed an incredible total of 12,951 BTC.
A common situation for Bitcoin!
With the rise of activities on the network, transaction fees are becoming a significant source of income for Bitcoin miners. However, what happened at block 788695 is not unique.
Since the BRC-20 tokens launched in March on Bitcoin, several blocks have seen fees above the block reward of 6.25 BTC.
Here are the most profitable blocks for miners in terms of fees:
- Block 788700 : 6.339 BTC
- Block 788702 : 6.529 BTC
- Block 788760 : 6.663 BTC
- Block 788762 : 6.587 BTC
- Block 788763 : 7,016 BTC
Furthermore, it should be noted that this situation is not a first in the history of Bitcoin. Indeed, the first time the transaction fee exceeded the block reward was on December 11, 2011 on the block 157077. The fees then amounted to 71.846 BTC, a historic record not broken since.
But that’s not all, another similar case took place on December 22, 2017 in the block 500521where the fee reached the colossal sum of 13,715 BTC.
A turning point for minors?
Ultimately, the increase in transaction fees on the Bitcoin network elicits mixed opinions. On the one hand, users suffer the consequences of this congestion. On the other side, Bitcoin miners make significant profits from it.
Indeed, in the long term, the subsidy for miners will no longer be relevant and transaction fees will become the only source of income. This development could encourage miners to continue securing the network.
However, it remains uncertain whether this request for transaction fees will persist. Either way, this spike in transaction fees could ultimately allow the Lightning Network to prove what it was made out of.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
