Bitcoin-Based Applications Contribute to a Significant Part of Miners’ Income
The fourth Bitcoin halving event significantly reduced miners’ rewards by 50%. However, the increase in dApp activity on the Bitcoin blockchain has provided enough relief to miners in terms of revenue contribution.
Bitcoin Miners See Increase in Revenue Streams
CryptoQuant CEO Ki Young Ju emphasized that there has been a significant shift in miners’ revenue streams due to the development of applications on the Bitcoin network. According to Ju, transaction fees now contribute more than 7% of miners’ total revenue; This is a significant increase from the 1% observed two years ago. This trend has been continuing for the past four weeks and is expected to strengthen the fundamentals of the network moving forward.
Increased transaction fee revenue can be attributed to innovative token protocols such as ordinals and Runes that increase Bitcoin’s utility. These developments facilitate the creation of both non-fungible and non-fungible tokens on the network, ultimately leading to an increase in transaction volume.
Bitcoin Miner revenue consists of fixed block subsidies and transaction fees paid by users. Block rewards decrease with scheduled halving events. But as transaction fees make up a larger share of revenue, they could potentially offset reduced profit margins after each halving.
BTC Miners Are Feeling the Heat
The day after the halving, transaction fees totaling more than $80 million contributed to an increase in miner revenue. At the peak of Runes activity, the average transaction fee on the network rose to $40, but since Bitcoin network activity returned to normal, this fee has fallen below $10.
However, as fees returned to normal levels, total miner revenue from transaction costs dropped below $5 million, putting pressure on miners. The 7-day moving average of Bitcoin miners’ revenue per terahash per second (TH/s) dropped to $0.048, marking an all-time low.
On the other hand, Bitcoin mining companies continue to rejoice on Wall Street. Amid the current rally on Wall Street, shares of Bitcoin mining companies have also been on the rise recently. On the other hand, leading Bitcoin mining players such as Marathon Digital are making significant changes to increase their mining activities and expand their market share.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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