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Bitcoin Transaction Fees Soar to Record Levels Following Halving and Runes Launch

The introduction of the Runes protocol and the recent Bitcoin halving have led to unprecedented spikes in transaction fees on the Bitcoin network.

Overview

  • Bitcoin transaction fees reached an all-time high due to the launch of the Runes protocol, which allows for the creation of fungible tokens directly on Bitcoin's blockchain.
  • The fourth Bitcoin halving, which occurred on April 19, reduced the block reward from 6.25 to 3.125 BTC, intensifying competition for block space.
  • Runes, inspired by the Runic alphabet, offers a new way for users to mint tokens, significantly increasing transaction fees due to heightened demand.
  • Despite the halving reducing miner rewards per block, increased transaction fees have bolstered miners' earnings, with fees on some days exceeding the block subsidy.
  • The Runes protocol has been described as a high-stakes environment, likened to a 'land grab' and 'silent auction,' driving a surge in transaction fees.