Amid Bitcoin’s recent spike in transaction fees, block number 788695 marks a special milestone for miners: For the first time since 2017, the transaction fees in a single block surpassed the block rewards doled out to miners. Transaction fees in the block clocked in at 6.7 Bitcoin, beating the block subsidy of 6.25 Bitcoin.
Though this spike in fees has thrown a curveball to users, this block shows how it’s benefitting Bitcoin miners, the global network of volunteers that run expensive, specialized computers to secure the Bitcoin network. They’re the ones raking in this newfound treasure trove of fees.
Bitcoin miners have two sources of income built in for them. One is the block subsidy. Roughly every 10 minutes, miners are awarded 6.25 Bitcoin. This value is split in half every four years in an event known as the Bitcoin “halvening.”
The second source is transaction fees. Users optionally can tag on a fee to every Bitcoin transaction. If there’s more demand for Bitcoin, users need to hike their fee if they want it to get through in a timely manner. There’s been lots of demand recently, pushing the average fee up to $19 according to the cryptocurrency statistics website BitInfoCharts.