Is the Bitcoin transaction fee dead? Miner income alarm sounded!
Bitcoin transaction fees have dropped to freezing point, miners' 'tip jars' are empty, and it's at a three-year low. This isn't a small ripple; it's a signal of a tsunami!
Hey, crypto friends, I'm Jin Zhu. As a veteran in the crypto space and an analyst, I'm here to clear up this fog. The latest data shows that Bitcoin transaction fees now account for less than 1% of the total miner rewards, hitting a three-year low. In simple terms, the fees users pay make up only a tiny fraction of miner income, smaller than a sesame seed. Previously, miners made money mainly from two sources: newly mined Bitcoins and the tips we give during transfers. Now, tips have shrunk significantly, dropping to below 1%. Why? Let me explain in plain language.
Middle case: Let's see what's really going on.
Do you remember that bull market in 2021? Bitcoin skyrocketed to over $60,000, and transactions flooded the network like a deluge. As a result, transaction fees soared, sometimes accounting for more than 15% of miner income! Let me give you a personal example: once I was in a hurry to transfer some coins, and the fee surged to over a hundred dollars. Miners were thrilled because those tips alone could support half a mining farm. But what about now? The market has cooled down, and with some optimization technologies, congestion has decreased, making transfers as cheap as free. Last month, a regular transfer fee was only $1-2, and its proportion of total rewards dropped directly to 0.8%. This means that miners are now mainly relying on block rewards for income; new coins are like Bitcoin's 'milk money,' with a limited total supply and periodic halving!
Personal view: Jin Zhu's 'microscope' analysis.
As an analyst, I think this situation has its pros and cons, but there is definitely a sense of urgency. The good news is that transaction costs are lower for ordinary users, making money transfers smoother, just like not having to queue in a supermarket. But from the miners' perspective, this is an alarm! Bitcoin block rewards halve every four years, and new coins will become increasingly scarce. If transaction fees remain this low, miners' income will be 'limping along,' possibly forcing them to shut down mining machines or raise service prices. In the long run, this could affect network security; with fewer miners, computing power decreases, making the network vulnerable to attacks. History has shown that during the bear market of 2018, low fees led to the closure of some small mining farms. The current situation is similar, and I feel that this record low proportion indicates the market is 'napping.' We need to wake up and not assume that low prices are the norm. Core viewpoint: This isn't a reason for panic, but it is definitely a signal to be cautious. When transaction fees are worthless, the entire ecosystem may rely more on the 'hard candy' of block rewards. When the halving wave comes, what will happen if the candy runs out?
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