Low Fees for Bitcoin Miners
Bitcoin transactions have been incredibly cheap lately, with fees hovering near their lowest point in recent times. This means that miners have been earning very little from fees.
Block Subsidy and Transaction Fees
The total revenue for Bitcoin miners comes from two sources: block subsidies (rewards per block) and transaction fees. Historically, transaction fees have been much lower than block subsidies. However, as block subsidies decrease with each halving, transaction fees will become more important for miners.
Halving Impact
Halvings, which occur every four years, permanently cut block rewards in half. The next halving is just around the corner, which will reduce the block subsidy from 6.25 BTC to 3.125 BTC. This will further squeeze miners’ income.
Past Trends
Analyst James Van Straten has observed that transaction fees tend to increase before and after halvings. He expects a similar pattern to play out this time around.
Bitcoin Price
As of writing, Bitcoin is trading around $69,400, up over 3% in the past week.
