The average Bitcoin transaction fee dropped on Sunday after reaching a record high the day before.
After the highly anticipated Bitcoin halving event, the typical cost for a Bitcoin transaction reached an all-time high of $128.45 due to increased demand represented by Runes. However, according to YCharts data, this amount dropped significantly to $34.8 million on April 21.
Bitcoin Transaction Fees Plunges
The transaction fees for Bitcoin reached a high of $81 million per day on April 20, up significantly from the $7.7 million recorded the day before. In contrast, the daily fees dropped to only $22.37 million on April 21.
The surge in transaction fees was mainly caused by the arrival of the Runes Protocol, a fresh token standard akin to BRC-20s, resulting in a flurry of activity and higher fees for creating meme coins.
For those unfamiliar, Runes was introduced at Bitcoin block 840,000 coinciding with the halving event, aiming to boost on-chain activity. It offers users the ability to generate NFT-like inscriptions directly on the Bitcoin network. Essentially, this innovative protocol simplifies the process of creating tokens on Bitcoin, much like Solana and Ethereum do.
Existing guidelines such as BRC-20 and SRC-20 are founded on Ordinals theory but may result in an excessive number of UTXOs, potentially clogging the Bitcoin network. In response to this challenge, Rodarmor introduced Runes in September 2023 as a more eco-friendly approach for token generation.
Runes Protocol Fails to Offset Revenue Losses for Bitcoin Miners
During the same period, Luxor’s “hash price” index, which measures miner earnings based on hash rate, dropped significantly from around $183 per hash/day to just $81 after the halving event. Surprisingly, these figures even fell below the previous levels before the halving occurred.
Bitcoin miners had anticipated lower earnings post-quarterly event, but were hopeful that the Runes protocol would compensate for this decrease. Unfortunately, the value of runestone NFTs on Magic Eden plummeted by almost 50% within a day to approximately 0.0364 BTC.
In contrast, collections such as Bitcoin Puppets and NodeMonkeys experienced growth of 15% and 9.5% respectively during the same time frame.
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2024-04-22 15:34