5 months ago
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Bitcoin's transaction fees have now stabilized after the fourth halving event.
Miners enjoyed a brief boon as transaction fees sharply rose to as much as $128 per transaction following the fourth Bitcoin halving event and the much-awaited launch of the Runes protocol.
Two days ago saw the much anticipated Bitcoin halving event which reduced Bitcoin (BTC) rewards for miners from 6.25 BTC per block to just 3.125. A halving occurs every four years and are built into Bitcoin’s code as a protection against inflation.
Halvings decrease revenue rewards for miners which would could entail that miners will probably less incentivized to keep mining: the bedrock of blockchain technology in the first place. This recent upsurge however, which netted miners close to $107.8 million, provided a damper on this worry. But more importantly, there are the new functionalities and avenues for expansion introduced alongside Runes.
Runes is the latest brainchild of Ordinals creator Casey Rodarmor. It is an expansion of the Ordinals protocol which launched on January 2023. Where Ordinals enabled the inscription of data directly on satoshis, the smallest unit of Bitcoin (and thus enabling a kind of NFT but for Bitcoin), the Runes protocol enables the creation of new tokens themselves.
It utilizes Bitcoin’s UTXO (unspent transaction output) model and thus embeds token information onto the UTXOs directly, thus ensuring a smoother and economical use of the Bitcoin network’s resources. Its launch attracted the interest of enthusiasts eager to try out the new protocol and create their own Runes-based memecoins. Token creation is but one of the many applications of the new Runes protocol; the protocol can be used for projects such as marketplaces or wallets.
On the other hand, BTC’s value has stayed on its upward trend currently trading at $66,097 (up 1.5%) as of writing, according aggregated data from CoinGecko. It was not significantly affected by the halving as well the recent upsurge and the subsequent normalization of transaction fees due to the launch of Runes.
The steady trend means that the Bitcoin network is as busy as ever; with interest and adoption slowly but steadily increasing. It remains to be seen how exactly the Runes protocol will affect or impact the Bitcoin ecosystem as the scarcity progresses.
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