Bitcoin Miners' Earnings Triple Post-Halving, Thanks to Runes Protocol

Bitcoin halving and Runes protocol launch spike transaction fees to $127.97, driving miner revenue to a record $107.8 million in one day.

By Max Weldon

4/22, 08:06 EDT
Bitcoin / U.S. dollar
Marathon Digital Holdings, Inc.
Riot Blockchain, Inc

Key Takeaway

  • Bitcoin miners earned an average of 19 BTC per block post-halving, tripling revenue due to a spike in network fees.
  • Daily miner revenues hit around $100 million, with $80 million from transaction fees, following the Runes protocol launch.
  • Bernstein predicts a sustainable 15% of miner revenues from transaction fees amid speculative activity on the Bitcoin blockchain.

Halving Meets Innovation: Runes Protocol Sparks Revenue Surge

The recent Bitcoin halving, a much-anticipated event designed to reduce miner rewards by half, coincided with an unexpected boon for miners. The launch of Casey Rodarmor's Runes protocol, enabling the minting of digital tokens on Bitcoin's blockchain, led to a significant spike in transaction fees. On April 20, the day of the halving and the Runes debut, Bitcoin transaction fees soared to an average of $127.97, marking a more than sevenfold increase from the previous day and setting a new record. This surge contributed to a record-breaking total revenue of $107.8 million for Bitcoin miners in a single day, as per YCharts data.

Runes Protocol: Beyond Meme Coins

The introduction of the Runes protocol by Casey Rodarmor, known for his work on the Ordinals protocol, has ushered in a new era for Bitcoin. This protocol facilitates the creation of fungible tokens, a departure from the non-fungible tokens (NFTs) previously enabled on Bitcoin's blockchain. The immediate popularity of Runes, evidenced by 4,923 runes etched and over 801,124 transactions within days of its launch, underscores the protocol's appeal. Despite concerns about the longevity of interest in meme coins and speculative tokens, the Runes protocol has significantly impacted network congestion and transaction fees on the Bitcoin blockchain.

Economic Implications and Miner Windfall

The Runes protocol's launch has not only introduced a new asset class to the Bitcoin ecosystem but has also reignited discussions about Bitcoin's economic model and its sustainability. With transaction fees constituting a record 75% of total miner revenue per block, this event provides a preview of potential future dynamics in Bitcoin mining economics. Major mining firms like Marathon Digital Holdings ($MARA), Riot Blockchain ($RIOT), and others have seen a positive outlook due to this surge in revenue. Grayscale noted that if transaction fees stabilize at higher levels, the impact of halving events on miner revenue could be lessened, suggesting a shift in the economic landscape for Bitcoin miners.

Street Views

  • Gautam Chhugani and Mahika Sapra, Bernstein (Neutral on Bitcoin):

    "This is driven by speculative activity to mint new tokens (mostly meme tokens) by retail traders."
    "Investors should not extrapolate these fees into the future, but it indicates the level of developer interest on the Bitcoin blockchain, and the fee revenue potential for miners."
    "We expect 15% of miner revenues to be network transaction fees, on a sustainable basis."