The new “flippening”: Bitcoin fees surpass block reward for miners

Quick Take

• Bitcoin fees have started to explode due to the emergence of Ordinals and BRC-20 tokens.
• Taproot made it easier for “Ordinals” to enter the Bitcoin blockchain.
• The mempool is processing as designed, but as a result, the fees are adjusting much higher.
• This results in one of if not the highest recorded transaction fees ever.
• This has potentially sorted out Bitcoins security model; when the block reward diminishes, will the miners continue to mine? Would they be incentivized enough?
• Miners, for the first time since 2017, are getting paid more than the block reward; in block 788695, miners were paid 6.701 ($193,075) in fees. At the same time, the block reward was 6.25 BTC.
• However, if you use the Bitcoin blockchain for payments, your fees have gone up, but this is the work of a free capital market. If people want to continue minting tokens via “ordinals,” they hope to sell for more than the cost of mint.
• For historical context, 31.7% of miner revenue has come from fees over the last 24 hours.

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