In the wake of the highly anticipated halving event, the Bitcoin network witnessed a surge in transaction fees following the introduction of the Runes Protocol, leading to record highs before a subsequent decline.
According to data from YCharts, the average fee per Bitcoin transaction soared to a record $128.45 immediately after the halving, driven by the introduction of the Runes Protocol. However, by April 21, the average fee dropped significantly to $34.8 million.
On April 20, Bitcoin’s total daily transaction fees spiked to $81 million, a stark increase from the $7.7 million recorded the previous day. However, by April 21, the total fees on the network plummeted to $22.37 million.
The brief escalation in fees can be attributed to the launch of the Runes Protocol, a new token standard akin to BRC-20s, which led to a surge in transaction fees as users rushed to create meme coins. Runes, launched simultaneously with the halving at block 840,000, aims to enhance on-chain activity by enabling users to create NFT-like inscriptions on the Bitcoin blockchain.
While existing token standards such as BRC-20 and SRC-20 are rooted in Ordinals theory, they risk causing UTXO proliferation, potentially spamming the Bitcoin network. To mitigate this issue and establish a more sustainable token creation method, Rodarmor introduced Runes in September 2023.
Despite hopes among Bitcoin miners that the introduction of the Runes protocol would compensate for reduced revenue post-halving, the reality proved different. Floor prices for the runestone NFT collection plummeted nearly 50% within 24 hours to approximately 0.0364 BTC, according to statistics from Magic Eden.
Conversely, ordinal collections like Bitcoin Puppets and NodeMonkes experienced increases of 15% and 9.5% respectively over the same period.
Meanwhile, the ‘hash price’ index, a metric used by Luxor to measure miner earnings per unit of hash rate, witnessed a significant drop from around $183 per hash/day to $81 following the halving. These figures were recorded to be lower than pre-halving levels, signaling challenges for Bitcoin miners in maintaining profitability amid evolving network dynamics.
As the Bitcoin network adjusts to the introduction of the Runes protocol and navigates post-halving challenges, miners and investors alike are closely monitoring developments to gauge the impact on transaction fees and overall network stability.
