Bitcoin completed the fourth halving in its 15-year history, a milestone venerated and anticipated in the blockchain community just like the World Cup and Olympics are in sports.
The once-every-four-years event, which cuts in half the amount miners get rewarded for creating new bitcoin, took place at 00:09 UTC on Saturday when the 840,000th block was added to the Bitcoin blockchain.
While bitcoin’s price held mostly steady above $63,000 in the aftermath, something else stole the show: Transaction fees spiked on Bitcoin as the launch of a new protocol called Runes led to a flurry of transactions as speculators rushed to mint digital tokens atop the blockchain.
The halving block – block 840,000 – saw a record-high 37.6 BTC fee (worth more than $2.4 million) attached to it, and fees remained far higher than normal in the hour after the halving.
The winning mining pool for that block was ViaBTC, entitling it to the bitcoin rewards at the new, just-lowered rate of 3.125 BTC per block, worth about $200,000 at the current price. But crypto miners had been competing actively for the block since it contains the first “sat” – the smallest denomination of bitcoin – following the halving. These “epic sats” that follow halvings are seen as collector’s items, and some mining executives have suggested that this individual fragment of a bitcoin could be worth millions of dollars, or many multiples of the current price of an entire bitcoin.
The Runes protocol for fungible tokens, from Casey Rodarmor, the developer behind the Ordinals platform that launched last year to enable NFTs on Bitcoin, also launched at block 840,000. Less than an hour after the launch, 853 of the runes had already been etched, according to the website runealpha.xyz.
“We’ve not had anything like this in the history of Bitcoin,” the prominent Bitcoin developer Jimmy Song said during a livestreamed watch party hosted by Tone Vays. “We’re stressing the network in a different way, in ways we’ve never stressed it before.”
On-chain data shows that the median satoshis per byte (sats/vByte) fee has exploded post-halving to 1,805 sats/vByte. Pre-halving on April 19, this most recent median fee was closer to 100 sats/vByte.
(Sats/vbyte (satoshis per byte) is a measurement of the fee rate used to conduct a Bitcoin transaction, indicating how many satoshis (the smallest unit of Bitcoin) you are willing to pay for each byte of data in your transaction.)
In layman’s terms, this means that transaction fees have surged, with medium-priority transactions costing $146 and high-priority transactions costing around $170.
Miners are expected to rely more on higher transaction fees and a potential increase in bitcoin’s price to offset the expected decline in revenue due to the reduced mining subsidy, especially in the short term.
