The Runes Protocol: A Solution for Sustaining the Bitcoin Mining Industry, with a Catch

The Fourth Bitcoin Halving: How Runes Protocol Sent Transaction Fees Soaring

Bitcoin Miners See Record Revenue Despite Halving

The fourth Bitcoin halving may be considered to be the most memorable, as industry experts believe this event was unlike any other. Bitcoin miners, in particular, were pleasantly surprised, as the recent halving sent BTC transaction fees soaring to record levels. As a result, Bitcoin miners saw an impressive amount in total revenue. According to YCharts, miners took in a record $107.8 million on the day of the halving.

Runes Protocol Increases BTC Transaction Fees

Yet the launch of Casey Rodarmor’s new Runes protocol – which took place the same day as the Bitcoin halving – proved so popular that it created network congestion, along with unusually high transaction fees. To put this in perspective, Bitcoin transaction fees averaged a record $127.97 on April 20, 2024.

Why Miners Are Bullish on Runes

McAvity elaborated that there was a race to get transactions included in the newly launched Rune protocol, which launched at the halving block. “Bitcoin mining pool ViaBTC found halving block number 840,000,” he said. “Data shows that 37.7 BTC in fees were paid in that block due to Runes.”

Are Runes Spam Transactions?

While it’s notable that Runes have boosted the Bitcoin mining industry for the time being, ecosystem participants remain aware of challenges associated with the protocol. Luke Dashjr, Co-founder of non-custodial Bitcoin mining pool OCEAN, told Cryptonews that while Runes are somewhat compatible with Bitcoin, there are a number of issues.

Are Runes’ High-Transaction Fees Sustainable?

Although Bitcoin miners may view Runes in a favorable light, Dashjr thinks that the high fees associated with Runes will die down. “Due to the more apparent and costly nature of flaws associated with Runes, this will likely be short-lived – along with any profits it provides to miners,” he remarked.

The Bottom Line

While the future of Runes and its impact on the Bitcoin industry is yet to be determined, Shah believes that overall the model of high fees on the Bitcoin network is unsustainable. As a result, Shah mentioned that there will be an influx of Bitcoin layer 2 (L2) solutions to accommodate protocols like Runes.

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