Bitcoin mining revenue reaches $184 million in Q2

Launched earlier this year, Ordinals is a protocol that allows people to create NFT-like assets on Bitcoin by inscribing data to a single satoshi

Bitcoin miners are awash with funds from transaction fees, a multimillion-dollar windfall generated in Q2 because of the popularity of BRC-20 tokens and Ordinals, as per Coin Metrics.

The crypto analytics company stated that a previously “tepid fee market” for Bitcoin miners has been instantly lifted, with its most recent “State of the Network” report uncovering that miners made $184mln from transaction fees between April and June.

Compared to $2.4bln in Bitcoin mining proceeds overall, that figure may appear meagre, but the most recent transaction fee sum constitutes more than the five previous quarters taken together, Coin Metrics added. It explained the change as “exceptional” influenced by BRC-20 tokens.

Launched earlier this year, Ordinals is a protocol that allows people to create NFT-like assets on Bitcoin by writing data to a single satoshi—the smallest unit of currency that a Bitcoin can be split into, worth 1/100,000,000 of a whole Bitcoin.

Even though the arrival of Ordinals’ has encountered some resistance from within the Bitcoin community, its potential has been underscored by figures such as MicroStrategy co-founder and Executive Chairman Michael Saylor, a notable Bitcoin backer who recognised the protocol’s new ability to aid miners stay profitable over time.

BRC-20 tokens were launched in March, and the experimental class of coins takes inspiration from Ethereum’s ERC-20 token standard. BRC-20 tokens have surged to more than $240mln in market cap since being launched, as per CoinGecko.

In order for people to mint BRC-20 tokens—and essentially claim them from a BRC-20 project that is introduced—users have to submit a transaction together with a fee to have their move to mint tokens processed on Bitcoin’s network and included in the next block of transactions.

As a feeling of “mania” around BRC-20 tokens took hold in May, people became more disposed to pay more premium on transactions in exchange for speed, Nick Hansen, Chief Executive Officer and co-founder of Luxor Technologies, told Decrypt.

BRC-20s introduced this urgency since what you needed to do was get your transactions confirmed faster than other peoples’ transactions, Hansen added. Then you would essentially win the coins from the mint.

Bitcoin transaction fees were so high in May that some people argued Bitcoin was under attack. And the amount of Bitcoin miners earned from transaction fees surpassed Bitcoin’s block subsidy for the first time since 2017.