Bitcoin Miners Earned $184 Million in Fees in the Second Quarter of 2023, Surpassing all of 2022

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Bitcoin miners made a massive $184 million from transaction charges within Q2 2023. This information emerged in a Coin Metrics report shared on July 5. Interestingly, transaction fees make up only 7.7% of the overall $2.4 billion earned by miners during the quarter.

In May, the Bitcoin mining sector had the upper hand after US President Joe Biden’s administration’s proposed tax on Digital Mining was halted. Also, the recent increase in Bitcoin price amid the slump caused by US SEC lawsuits boosted miners’ profitability. 

Bitcoin miners make a staggering $184 million in Fees

Within the second quarter of 2023, the Bitcoin mining sector earned $184 million in transaction charges. This figure is higher than the 2022 market earnings, thanks to the recent upsurge in BTC price and the BRC-20 token rally.

The fee payout during Q2 2023 rose by 270% from its value in the 2023 first quarter. As Coin Metrics reported, the second quarter earnings are now the only quarter to have surged past the $100 million mark since the 2021 second quarter. 

How Bitcoin Miners Earn Their Income

Bitcoin miners get paid transaction fees whenever a user in the network validates a block. The user’s need for block space and data volume determine the amount paid.

Coin Metric’s report also added that this fee spike emerged from the crypto’s recent price surge bolstering high revenues and introducing the latest BRC-20 token standard. 

BRC-20 is the newest Bitcoin token standard launched in March this year to enable users to mint non-fungible tokens. The standard expanded the use cases on the Bitcoin network making it more scalable through the Lightning Network. 

Meanwhile, it’s worth stating that this transaction charge makes up only 7.7% of the overall income earned by miners in the quarter, which recorded a staggering $2.4 billion.

The remaining percent earned came from Bitcoin (BTC) block rewards, with miners presently earning 6.25 BTC for every Bitcoin block solved. 

But this amount is preset to decline to 3.125 BTC. The upcoming Bitcoin halving event slated for 2024 will reduce the miner’s reward. 

The Halt in DAME Tax Favors Bitcoin Miners

Another important aspect of the Coin Metrics report is the halt of the Digital Asset Mining Energy (DAME) tax which the Biden Administration proposed. 

The tax was halted in May, and according to Coin metrics, it represents a win for the miners. Moreover, US miners could achieve more profits in the period under study because of reduced electricity costs due to the low inflation rate. 

As a result of the lower cost, these miners could operate efficiently while also making profits. 

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Abraham
Expert tech and gaming writer, blending computer science expertise