May proved to be a profitable month for bitcoin miners, as several mining companies reported higher production levels.
This surge in production can be attributed to the rise in transaction fees, which have since returned to more normal levels.
The increased activity on the Bitcoin network, fueled by the surge in Ordinals and BRC-20 activity, played a significant role in driving up transaction fees.
Marathon Digital, a leading mining company, experienced a remarkable 77% month-over-month increase in bitcoin production.
The company attributed roughly 11.8% of its total earnings to the significant increase in transaction fees. The emergence of Ordinals, an NFT protocol on the Bitcoin mainnet, played a vital role in driving up fees.
CleanSpark, another prominent mining company, witnessed a boost in bitcoin production as its output increased from 524 BTC in April to 609 BTC in May.
The company’s CEO, Zach Bradford, noted that elevated transaction fees were a result of increased interest in Ordinals. While daily production spiked during this period, it has since returned to normal levels.
Experts believe that the temporary surge in transaction fees brought about by Ordinals offers insights into the future of mining economics.
Nishant Sharma, founder of BlocksBridge, emphasized that transaction fees could become a significant portion of miner rewards. This development could address long-term security concerns and incentivize BTC miners post-halving events.
Although the speculative frenzy around Ordinals and BRC-20 inscription subsided later in May, it was viewed as a positive development for miners.
Transaction fees, which initially accounted for a substantial portion of miner revenue, dropped back down to around 7% towards the end of the month.
However, the potential long-term benefits of increased transaction fees in securing the BTC network were acknowledged.
Riot Platforms and Core Scientific, two prominent mining companies, also experienced growth in their bitcoin production.
Riot Platforms produced 676 BTC in May, a 6% increase from April, while Core Scientific self-mined 1,314 BTC, marking a nearly 17% rise.