By Cointelegraph.com News
Fractal Bitcoin—a sidechain scaling solution for Bitcoin (BTC) that uses the Bitcoin core code—could potentially provide miners with an additional source of revenue. Conversely, fractal Bitcoin could end up slashing mining revenues.
According to TheMinerMag, Fractal Bitcoin is merge-mined alongside Bitcoin—meaning that the same mining hardware can simultaneously mine Bitcoin and Fractal Bitcoin. This could be an attractive and much-needed avenue for Bitcoin miners to bolster profits in the post-halving environment, without having to retool facilities for AI or high-performance computing.
However, the knife cuts both ways. Because Fractal Bitcoin supports the BRC-20 token standard and promises to be a faster, cheaper scaling solution for the Bitcoin base layer, this could reduce network fees created by demand for non-fungible tokens on the Bitcoin network, which translates to a reduction of miner profits.
Tokenized assets on the Bitcoin network as a source of miner revenue
Although the mania surrounding Bitcoin Runes, ordinals, BRC-20 tokens, and inscriptions has sharply declined since their inception, these tokenized assets still provide a healthy source of revenue for Bitcoin miners.
Related: Bitcoin miners see worst revenues in 11 months as difficulty climbs
Directly following the halving event in April 2024, the minting of Bitcoin Runes contributed 1,200 BTC in network fees to miners by the end of that same month—initially offsetting the decreased block subsidy.
Since that time, Bitcoin Runes have produced approximately $162.4 million in fees—this is not counting ordinals, BRC-20 tokens, or other forms of tokenized assets on the Bitcoin network.
Collapse of Ethereum layer-1 revenues
If Fractal Bitcoin and other Bitcoin layer-2 solutions become successful, they could create a situation reminiscent of the layer-1 revenue collapse on the Ethereum network.
Ethereum network fees have been in steady decline since the launch of the Dencun upgrade in March 2024—which dramatically reduced fees for Ethereum’s layer-2 transactions.
This significant reduction in fees created a catalyst that led to an explosion in Ethereum layer-2 networks and increased competition to provide customers with the fastest and cheapest scaling solutions.
As a result, fees on the Ethereum base layer have collapsed by 99% since the Dencun upgrade went live earlier this year.
Magazine: ‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters
Source: Cointelegraph.com News
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