For the first time in four years, bitcoin miners are apparently getting more money from transaction fees than from mining incentives. The crypto winter was a difficult moment for miners, thus this development is a welcome reprieve. The majority of miners generate new Bitcoin by solving challenging mathematical puzzles and execute transactions on the network to generate revenue. The first technique has, however, lost some of its profitability over time since the payout has been cut in half. The mining reward is now 6.25 BTC, and it will decrease once more in 2019. Due to the possibility that the reward might diminish significantly over time and eventually vanish after all Bitcoins have been mined (which is anticipated to take more than a century), this has generated a possible existential threat to the long-term viability of mining.
The current rise in processing transaction earnings is a nice development as mining incentives decrease. The practice has gained so much traction that on many times on Monday, mining pools like Luxor Technologies and AntPool received larger transaction fees from freshly added blocks than the 6.25 BTC mining payout. The advent of non-fungible tokens (NFTs) on the Bitcoin blockchain, which take up a lot of space and have a high transaction cost, may help to explain the trend, at least in part.
According to Colin Harper, the director of content for mining pool Luxor Technologies, many individuals are considering the possibility of replacing the subsidies entirely with transaction fees in the future. According to Harper, some people questioned if Bitcoin blockspace could be used for purposes other than value settlement, but new applications for blockspace where users must pay fees would benefit Bitcoin in the long run. Consequently, the issue is whether or not inscriptions and ordinals endure.
In conclusion, even if the trend of greater transaction fees exceeding mining returns may only be short-lived, it provides hope to miners who are battling with low rewards and might open up a new route for Bitcoin profitability.