Miners and fees: How rising transaction fees affect Bitcoin mining costs

The introduction of the Ordinals Protocol has transformed Bitcoin from a single-asset network to a multi-asset blockchain enabling NFTs and BRC-20 tokens.

This transition has caused a lot of controversy in the industry, with the market forming strong opinions about inscriptions.

A strong critical current formed, arguing that flooding the blockchain with inscriptions created unsustainably high fees and caused congestion. On-chain data confirmed these worries — previous CryptoSlate analysis found a sharp spike in transaction fees. The number of transactions bloated the mempool, with hundreds of thousands of transactions waiting to be processed.

Others argued that inscriptions were a natural progression and perfectly represented Bitcoin’s ability to foster a free market.

And while the market debated the impact rising fees had on the average user, Bitcoin miners experienced a much-needed surge in revenue.

Miner revenue has declined rapidly since October 2021, with many public mining companies struggling to cover operating costs and service debt. The jump in transaction fees has pushed miner revenue to yearly highs.

In this market report, CryptoSlate dives deep into rising fees’ effect on public Bitcoin mining companies and analyzes their performance in the wake of increasing revenues.