The CEO of CryptoQuant, Ki Young Ju, indicated a major change in the Bitcoin environment, which mostly affects miners and their profitability. Based on the latest data posted in a recent X post, the wave of build applications on Bitcoin network is changing the economic model for miners.
Before, the majority of the miners’ income was from their block rewards for creating new Bitcoin blocks. Nevertheless, there is a new tendency that has greatly changed this income structure. The last two years have seen transaction fees increasing to more than 7% of miners’ total income, as compared to the just 1% of two years ago.
Bitcoin’s Evolving Economic Model
This transition not only has impact on miners income streams but it is going to affect the BTC network in general. The dynamics of the growth of income from commissions over the last four weeks as well as the stability of the trend are evidence of the strengthening of the network’s fundamentals. Applications that are built on the BTC blockchain grow in number and as they do, they generate more transactions, and therefore, an increase in the fees that miners earn.
Source: Image by CryptoQuant
The data implies that it may be a longer-term change, possibly resulting in increased stability and the safety of the Bitcoin network. Increased transaction costs could motivate more continuous mining activity, even though the block rewards are halved roughly every four years.
This changing situation is a bright but also tough future for BTC mining. The entry of fee-based income gives miners another source of revenue but it also necessitates changes in their operational approach. Transaction fee become more important and to avoid such situation miners could choose the most high-cost transactions, which will affect the speed of transactions and user costs.
In addition, such a development would affect the valuation of Bitcoin and the behavior of both investors and users in the ecosystem. The stakeholders may need to re-think their ways of using, investing in, and protecting the bitcoins as the network adjusts to these changes.
CEO of CryptoQuant’s insights are a valuable sign of the shift in the dynamics taking place within the Bitcoin network. This move to a higher reliance on the transaction fees is the evolution of cryptocurrency economics, which also influences the security, miner’s behavior, and the stability of the network.