After the halving, transaction fees will be crucial to keeping Bitcoin miners afloat because the reward for mining a block will decrease from 6.25 BTC to 3.125 BTC.
For the past three days, fees on Bitcoin have exceeded those on Ethereum as miners and traders get ready for the impending halving of Bitcoin and, to a lesser degree, the debut of Runes on Bitcoin.
According to Crypto Fees, on April 17, Bitcoin miners received $7.47 million in fees, which is almost $160,000 more than the $7.31 million paid to Ethereum stakes.
Additionally, on April 15 and 16, bitcoin miners made $9.98 million and $5.91 million, respectively, outpacing Ethereum stakes by $3.5 million and 1.1 million.
On a 7-day average fee basis, Ethereum is slightly ahead of Bitcoin ($7.57 million) at $8.55 million.
The size or data volume of the transaction and the demand for block space at the time the transaction request is made influence the cost of a Bitcoin transaction.
The increase in Bitcoin (BTC) fees coincides with a critical moment for Bitcoin miners, as the mining subsidy will drop from 6.25 BTC ($398,000) to 3.125 BTC ($199,000) on April 20th, the day of the Bitcoin halving event.
At the moment, over 900 Bitcoins are mined per day, or $57.2 million at the current exchange rate.
Based on the $7.47 million fee figure from April 17, this indicates that transaction fees made up 11.5% of the total block rewards given to Bitcoin miners.
But since about 450 Bitcoin will have been mined by then, the portion of block rewards from transaction fees would rise significantly.
Therefore, to offset the revenue decline that the halving would cause, at least initially, miners will have to rely more on higher fees and a continuous rise in the price of Bitcoin.
With the release of Runes, a new Bitcoin token standard, at block 840,000, miners will have access to a new source of income. In the meantime, the introduction of NFT-like Ordinals inscriptions in January 2023 has helped them earn more money from transaction fees.
By attempting to make it simpler for memecoin aficionados and other community-driven audiences to generate fungible tokens on Bitcoin, Runes will rival Ordinals.
Runes should not spam Bitcoin to the same degree as Ordinals because they are entirely UTXO-based, according to its designer Casey Rodarmor, who also designed Ordinals.
The recent drop in BRC-20 token prices as some traders’ focus has shifted to Runes may have contributed to the recent increase in Bitcoin costs.
The two largest BRC-20s by market value, Ordinals (ORDI) and Sats (SATS) have dropped 38% and 43%, respectively, over the past week, according to CoinMarketCap.
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