Bitcoin Runes' Rising Transaction Fees Bolster Revenue for Miners, Says TeraWulf CEO
Summary:
The surging transaction fees of the new Bitcoin Runes protocol have led to increased revenues for Bitcoin miners, according to Nazar Khan, CEO of TeraWulf. Despite the Bitcoin halving which reduced the block rewards, the rise in transaction fees has bolstered earnings for miners and is expected to lower the Bitcoin production costs for firms like TeraWulf, thereby increasing their profitability.
Fees linked to transactions from Bitcoin Runes, a nascent protocol for introducing exchangeable tokens via the Bitcoin network, have unexpectedly surged, leading to a significant upturn in revenues for Bitcoin miners, says Nazar Khan, TeraWulf CEO and co-founder. He claimed in an interview with Cointelegraph that the spike in the transaction costs had resulted in a surge in hash prices soon after the halving. Although the fees have since shrunk, they remain above average levels seen in 2023. Besides the constant issuance of the rest of the Bitcoin block reward, the erratic fees are what operators of Bitcoin (BTC) mining processes depend on stated Khan.
Bitcoin miners were presented with a critical financial aid via the escalation in transaction charges shortly after the Bitcoin halving slashed block rewards from 6.25 BTC to 3.125 BTC. Aggregate Bitcoin transaction fees amounted to 105 Bitcoin on April 25, a considerable drop from its zenith of 1,257 observed on April 20 when Bitcoin halving took place, as revealed by Cryptoquant studies. In spite of this, transaction fees stayed relatively high compared to the majority of the year 2023.
Post the halving, transaction fees typically contributed to about 30% of Bitcoin block rewards, implying an extra BTC for miners in addition to the current block rewards, mentioned Khan. In 2023, transaction fees accounted for an average of 10% of Bitcoin block rewards. TeraWulf, in its computations, assumed a production cost of around $37,000 per Bitcoin post-halving based on a 10% average transaction fee.
However, with inflated average transaction costs, there's a high possibility that TeraWulf's Bitcoin production expenses may drop, thus bolstering its profitability, as Khan suggested. With a market capitalization surpassing $750 million, TeraWulf is the eighth largest Bitcoin mining outfit, as per data from Companies Market Cap. The firm aims to expand further notwithstanding the halving of block rewards.
Published At
4/26/2024 12:50:36 PM
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