More

    Get Ready for an Explosive Spike in Transaction Fees: The Bitcoin Halving Has Arrived!

    Bitcoin Halving: Fees Surge As Runes Protocol Launches

    The Bitcoin halving occurred early Saturday, disrupting the economics of operating the pioneering blockchain technology. As a new Bitcoin-based system called Runes launched, transaction fees skyrocketed. This article examines the implications of these events and their impact on the cryptocurrency landscape.

    Bitcoin Halving: A Momentous Occasion

    Bitcoin recently completed its fourth halving in its 15-year history, described by the blockchain community as an event on par with major sporting events such as the World Cup and Olympics. The event, which takes place every four years, reduces the amount miners are rewarded for creating new bitcoin. It occurred at 00:09 UTC on Saturday, with the addition of block 840,000 to the Bitcoin blockchain.

    While Bitcoin’s price remained relatively stable above $63,000 in the aftermath, attention was shifted towards the surge in transaction fees. This was due to the launch of the Runes protocol, which saw a flurry of transactions as speculators rushed to mint digital tokens on the blockchain.

    Interestingly, the halving block (block 840,000) recorded a record-high fee of 37.6 BTC (worth over $2.4 million). Fees continued to remain significantly higher than usual in the following hour.

    Notably, the winning mining pool for this block was ViaBTC, entitled to the new, lowered reward rate of 3.125 BTC. However, competition for the block was intense as it contained the first “sat” (the smallest denomination of bitcoin) after the halving. These “epic sats” are seen as collector’s items, with some estimating their value to be equivalent to millions of dollars.

    Runes Protocol Launches

    Screenshot from Mempool.space showing block No. 840,000, when the halving occurred (Mempool.space)
    Screenshot from Mempool.space showing block No. 840,000, when the halving occurred (Mempool.space)

    The launch of the Runes protocol, developed by Casey Rodarmor, creator of the Ordinals platform, also took place during the 840,000th block. Within an hour of its launch, 853 runes had already been etched, as reported by runealpha.xyz.

    A quick look at the fees paid for transactions during this period reflects the intense competition to mint new runes, with fees for the halving block reaching $2.4 million, compared to a more typical range of $40,000 to $60,000. These subsequent blocks also recorded fees exceeding $1 million.

    According to prominent Bitcoin developer Jimmy Song, there has never been an instance like this in the history of Bitcoin, as the network is being pushed to unprecedented limits.

    Chart from Mempool.space shows the massive spike in transaction fees (Mempool.space)
    Chart from Mempool.space shows the massive spike in transaction fees (Mempool.space)

    The median satoshis per byte (sats/vByte) fee has surged to 1,805 sats/vByte after the halving, compared to the pre-halving fee of about 100 sats/vByte on April 19. In simpler terms, this means that transaction fees have spiked significantly, with medium-priority transactions costing $146 and high-priority ones costing around $170.

    With the reduced mining subsidy, miners are expected to rely more on higher transaction fees and a potential increase in the price of bitcoin. This is especially crucial in the short term as they face a decline in revenue.

    "Transaction

    Latest articles

    Related articles

    Leave a reply

    Please enter your comment!
    Please enter your name here