This is how much miners are benefiting from the BRC-20 explosion

The new BRC-20 token standard has sent bitcoin (btc) transaction fees skyrocketing, and miners on the network are reaping every satoshi as additional profit.

HashRate Index data shows that the world's largest bitcoin mining pools have made about a third of their profits from transaction fees alone over the past three days.

BRC-20: a new source of income for miners

Foundry USA, the largest mining group with a 26% market share, has cattle an average of 3.23 btc per block in transaction fees over the relevant period. Meanwhile, Antpool, its biggest rival based in Beijing, China, has averaged 3.26 btc per block in fees.

For context, that's more than a 50% bonus for both groups, who already receive 6.25 btc as a base subsidy attached to each block. Until this year, the subsidy represented the vast majority of miners' income and was their main incentive to spend energy securing the network.

But with Ordinals taking off earlier this year, bitcoin users themselves are bidding high for miners to allow them to make use of the network's scarce block space. They can not only use it for standard btc transfers, but also to mint permanent NFTs and implement alt tokens and meme coins.

On-chain analysis shows that signups have generated between 20% and 40% of recent network fees. That includes a combination of large, heavy nft-based signups and a sea of ​​small text-based BRC-20 token transfers.

Since the average bitcoin block generates more than 9 btc ($374,000), miners may be better protected from the upcoming bitcoin halving. Expected in April, the halving will lock bitcoin's subsidy from 6.25 btc to 3.125 btc, an event that analysts claim “eliminates high-cost, inefficient miners.”

According cryptofees.infobitcoin has averaged higher daily fees than ethereum over the past seven days: $13.9 million per day.

Unmanageable rates

As of early December, bitcoin transaction costs hit a new all-time high of 350 satoshis per vByte (sat/vB). As of Monday, data from mempool.space shows that costs have cooled to 127 sat/vB, or about $7.00 per transaction. Last week, that cost hit $30 per transaction.

That's not good for average users, especially those who have multiple small bitcoin transactions in a single wallet. To move those coins, users must pay a fee for each of those separate transfers, called UTXOs, which can wipe out their holdings depending on how dispersed they are.

Bitcoiners, both for and against Ordinals, are looking for solutions to the problem, from blocking signups where possible to onboarding users and cheaper layer 2 scaling solutions.

Throughout the month, Blockstream CEO Adam Back cited a revival in transaction volume on bitcoin's Liquid network, a once-sterile sidechain created for fast, cheap and private btc payments.

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