According to information presented on Messari.io’s OnChainFX rankings, Bitcoin accounted for nearly $580 thousand USD in fees in the last 24 hours. On May 10, 2019, at 9:50 am UTC, Bitcoin miners earned more than eight times the transaction fees than the combined total of all other cryptocurrencies listed on the site.
Trailing Bitcoin in this metric is none other than Ethereum, the second-largest digital currency by market cap. According to Messari, Ether miners earned nearly $68 thousand in fees on Friday.
Bitcoin’s daily fees may be an example of functional governance
While Ethereum’s daily fees are a far cry from the amount that Bitcoin miners earned — 88% less to be exact — the next asset on the list: Litecoin, accounted for just $1,100. The next seven assets on the list combined (Lisk, Bitcoin Cash, Monero, Dash, XRP, Dogecoin, and Ethereum Classic) accounted for less than $1,500 USD in fees.
These figures illustrate a significant gap when it comes to the amount of fees that the miners of popular cryptocurrencies are earning each day. While many proponents will likely cite this as a win for altcoin users, who are theoretically left with less fees to pay when sending transactions, Bitcoin’s daily fees are an example of the currency functioning as its creator(s) intended.
In order to ensure that the Bitcoin network could stay safe from 51% attacks and/or other means of centralization, Satoshi Nakamoto conceived of Bitcoin’s transaction fees as a way of letting users pay additional money to have their payments prioritized. In turn, these fees financially incentivize Bitcoin miners around the world to temporarily donate their device’s resources for the purpose of verifying transactions.
For other assets, block rewards are the key incentive. Bitcoin’s rewards are halving
Many cryptocurrencies, including Bitcoin, make use of block rewards as a way of incentivizing crypto mining. Put simply, a block reward is the amount that a miner can claim for creating a new block. Over time, however, Bitcoin’s block reward is designed to halve. The current Bitcoin block reward is 12.5 BTC. It is projected to drop to 6.25 BTC sometime next year.
As block rewards become less of an incentive for miners, Bitcoin’s fees may become a key financial incentive. As a result, the asset’s current dominance by this metric may serve as a victory in the ongoing battle to stay both safe and decentralized.
Many other digital assets, however, take approaches that differ widely from Bitcoin’s governance model. In these circumstances, low fees are something to strive for.