The industry is experiencing a recent downturn, and this could be a welcome change.

Bitcoin Miners earn money in two ways : by generating new BTC through crunching of numbers and by processing transactions. The first method has, by design, become less profitable over time. Every so often, rewards are cut in half. This payment is currently 6.25 BTC and will be reduced again next year.

This creates an existential threat for the profitability of mining in the long run: the mining reward will eventually become very small and disappear (probably more than 100 year from now), once all BTC has been mined.

This recent increase in transaction fees could be seen as a positive development, given the pain that the mining industry has been experiencing during ‘s crypto winter. This trend is so strong that, on multiple occasions on Monday morning, mining pools like Luxor technologies and AntPool received higher transaction fees for newly added blocks than 6.25 BTC as a mining reward.

Ordinals may explain at least part of the shift. This new project encrypts non-fungible (NFT) tokens on Bitcoin’s Blockchain.

The market value of ‘Bitcoin request for comment’ tokens has risen to $137M

The emergence of these coins over the last few months is “a cool example of how just when you thought Bitcoin had become boring, something was waiting around the next corner that surprised everyone,” said Colin Harper. He, the head of content at mining pool Luxor Technologies, did not expect the transaction fees to exceed the block reward before the subsidy of 6.25 BTC gets halved.

Average Transaction Fee for Bitcoin (Glassnode).

Harper says that many people are wondering if they can “imagine a future in which we replace the subsidy completely with transaction fees. Many people thought this was impossible before.”

Harper said: “Some questioned whether Bitcoin blockspace could have other uses than settling value.” But now, “there are many new uses for Bitcoin blockspace. And any use of Bitcoin blockspace that people pay fees for is good for Bitcoin on the long term.”

BitInfoCharts data shows that the average Bitcoin transaction fee has increased by more than 560% to $19.20 in May.

Nick Baker is the editor.