Bitcoin Ordinals, BRC-20, and Runes: How They Changed Mining Revenue After Halving

Bitcoin Ordinals launched in January 2023, BRC-20 followed in March 2023, and Runes debuted at block 840,000, the block of the April 2024 halving. Together, these protocols reshaped Bitcoin's transaction fee market. Block 840,000 alone carried about 37.6 BTC in fees, roughly 12 times the new block subsidy.

Miners historically treated transaction fees as a secondary source of income, with the block subsidy as the main one. Ordinals, BRC-20, and Runes changed that balance:

• they did not change Bitcoin's 21 million supply cap;
• they did not change the proof-of-work model;
• they changed demand for block space.

More demand meant higher fees, and a larger share of miner revenue began to come from the fee market.

For traders, Ordinals looked like NFTs on Bitcoin. For investors, BRC-20 and Runes were a new speculative layer of meme tokens. For miners, they meant something more practical: new fee pressure at the exact moment the block subsidy fell from 6.25 BTC to 3.125 BTC.

This article is for informational purposes only and does not constitute investment advice. Fee scenarios are illustrative and are not forecasts.

Key takeaways

• Ordinals let users attach arbitrary data to individual satoshis on the Bitcoin blockchain.
• BRC-20 tokens are fungible tokens created through JSON inscriptions on top of Ordinals.
• Runes launched at halving block 840,000 as a fungible token standard built on Bitcoin's UTXO model.
• Block 840,000 paid about 37.6 BTC in transaction fees, one of the most visible fee events in Bitcoin's history.
• For miners, transaction fees are becoming a real revenue line, not a rounding error.
• The 2028 halving will cut the subsidy to 1.5625 BTC, so the role of fees will grow further.

How Bitcoin Ordinals work

Ordinals is a protocol created by developer Casey Rodarmor that lets users track individual satoshis and attach data to them through inscriptions. It launched on Bitcoin mainnet in January 2023.

A satoshi is the smallest unit of Bitcoin: 1 BTC equals 100 million satoshis. Ordinal theory assigns each satoshi a serial number based on the order in which it was mined, and then tracks how satoshis move between transactions using the "first in, first out" principle. This makes a specific satoshi traceable and lets data be attached to it: an image, text, JSON, HTML, or another file type.

Inscriptions are stored on-chain as part of transaction data. In practice, creating an Ordinal resembles minting an NFT: the user creates a transaction that inscribes data onto a satoshi, and that satoshi can then be bought, sold, or traded.

The technical basis came from earlier Bitcoin upgrades:

1. SegWit separated witness data from the rest of the transaction and introduced a discount for it;
2. Taproot made it easier to include more flexible witness data.

Ordinals used this design space to put more data into Bitcoin blocks.

Ordinals also created a culture of "rare" satoshis, such as sats from early blocks or halving blocks. Their value is social and market-driven, not built into Bitcoin's rules.

BRC-20: fungible tokens on top of Ordinals

BRC-20 is an experimental token standard introduced in March 2023 by the pseudonymous developer Domo. It uses Ordinals inscriptions to create fungible tokens, issue supply, and transfer balances on Bitcoin without changing the network's base rules.

Unlike Ethereum's ERC-20, BRC-20 tokens do not use smart contracts. They are created by inscribing JSON data onto satoshis. This JSON defines the token's properties:

• ticker;
• supply;
• minting limits;
• transfer rules.

The blockchain stores the data, while off-chain indexers interpret it to track balances, mints, and transfers.

This dependence on indexers matters: BRC-20 is less native to Bitcoin than designs based on the UTXO model.

For miners, the design of the standard is not the main point. What matters is that BRC-20 mints and transfers created waves of mempool congestion. During BRC-20 mania, users competed for confirmation by bidding higher fees, which pushed fees up across the network. Thousands of BRC-20 tokens were created during the first wave alone.

Runes: a UTXO-native token standard

Runes is a fungible token protocol, also created by Casey Rodarmor. It launched in April 2024 at block 840,000, the block of Bitcoin's fourth halving.

Runes was designed as a more Bitcoin-native alternative to BRC-20:

• instead of JSON inscriptions, it uses Bitcoin's UTXO model, where an unspent transaction output is the basic unit of spendable state;
• token creation is called etching;
• transfers use regular Bitcoin transactions and OP_RETURN data.

This makes Runes closer to Bitcoin's transaction model. But Runes still competes for block space and can increase fee pressure when demand spikes.

The timing mattered. Runes launched exactly when miners were losing half of the block subsidy, and the demand to mint tokens directly on Bitcoin created a fee spike around the halving block.

Key differences between Ordinals, BRC-20, and Runes

The differences are easiest to see through miner economics:

1. Ordinals made Bitcoin block space useful for data and digital assets;
2. BRC-20 made this data speculative and repeatable;
3. Runes introduced a token standard built on Bitcoin's own transaction logic.

New standards may appear in the future. For miners, the question is not whether every protocol survives, but whether each new wave creates enough demand to affect revenue.

How they changed the fee market

Before Ordinals, fees mattered, but most miners planned primarily around the block subsidy, hashprice, electricity costs, and difficulty.

Ordinals changed the demand curve. A new class of users appeared who wanted Bitcoin block space not only for financial transfers, but also for inscriptions, collectibles, and token mints. During active inscription periods:

• average block size grew noticeably;
• individual blocks approached the network's maximum block weight;
• the number of inscriptions reached tens of millions.

The key shift: users created enough on-chain activity to compete with regular transfers for limited block space.

For miners, the new fee market has three effects:

1. Fee spikes increase the total value of blocks.
2. Fee volatility makes daily revenue harder to forecast.
3. With each halving, fees become more important as the subsidy shrinks.

The last point is the strategic one: transaction fees are widely seen as the long-term replacement for the declining subsidy.

Mining revenue before and after Ordinals

A miner's revenue has two parts:

• the block subsidy: newly issued BTC per block;
• transaction fees: payments from users competing for block space.

Before Ordinals, fees could often be treated as a small variable. After Ordinals, BRC-20, and Runes, they became a serious line item.

Take a simplified example with an Antminer S21 Pro, commonly rated at 234 TH/s, 3,510 W, and 15 J/TH. The example assumes the same difficulty and BTC price and shows the direction of change, not real profitability.

How the share of fees changes with the same subsidy of 3.125 BTC:

The miner's share of the block does not change. What changes is the total value being shared. That is why the pool's payout scheme matters more and more: under FPPS, the miner receives a share of expected transaction fees along with the subsidy, while under schemes that exclude fees, this part of revenue is lost. EMCD Mining Pool, for example, uses FPPS for BTC, so fees are reflected in payouts.

The halving block 840,000: record fees

Block 840,000 is the clearest example of the new mining reality:

• it was the fourth halving block, cutting the subsidy from 6.25 BTC to 3.125 BTC;
• it carried about 37.6 BTC in transaction fees, worth more than $2.4 million at the time;
• the fee part was about 12 times larger than the new subsidy.

On April 20, 2024, miners collectively earned about $78 million in transaction fees in a single day, an all-time high in dollar terms. That day was an outlier, and fees later declined. But it showed that users are willing to pay exceptionally high fees when block space becomes scarce for cultural, financial, or historical reasons.

Why some see Ordinals as support for Bitcoin's security

Bitcoin's security depends on miners being paid enough to secure the network. Today they receive the subsidy plus fees, but the subsidy halves roughly every four years. That means the fee market has to matter more over time.

Supporters argue that Ordinals strengthen Bitcoin's long-term security by increasing demand for block space:

1. More demand for block space means more fee pressure.
2. More fee pressure supports miner revenue.
3. Stronger miner revenue supports hashrate.
4. Stronger hashrate supports Bitcoin's security budget.

This does not mean every inscription wave is healthy or sustainable: fee spikes can be temporary, and token manias fade. But the very existence of non-payment demand for Bitcoin block space matters.

The controversy: spam or innovation

The debate around Ordinals is unlikely to disappear.

Critics argue that inscriptions and token mints:

• are spam;
• increase mempool congestion;
• raise fees for ordinary users;
• add load on node operators.

Some users want Bitcoin optimized only for monetary transfers. Luke Dashjr, a longtime Bitcoin developer and maintainer of the alternative client Bitcoin Knots, is one of the most visible critics: Knots includes policy settings aimed at filtering certain inscription-style transactions from node mempools. So the disagreement is not only cultural: it touches node policy, transaction relay rules, and network priorities.

Supporters argue that block space works as a market. If a transaction is valid and pays the required fee, miners can include it in a block. From this point of view, Ordinals and Runes do not break Bitcoin, but reveal demand.

The miner's perspective remains pragmatic: valid transactions with higher fees raise block value. But miners also need a robust network, decentralization, and censorship-resistant block construction.

This is where Stratum V2 becomes relevant. It improves the mining protocol and allows miners to construct block templates themselves instead of relying entirely on the pool. If the fee market becomes more political, the question of who selects transactions will matter more.

What this means for the 2028 halving

In 2028, the subsidy will halve again, from 3.125 BTC to 1.5625 BTC, and fees will have to carry more of the economic weight. Miners should not assume every day will look like block 840,000. A better approach is to model several fee regimes:

These are planning scenarios, not forecasts. The goal is not to guess the exact figure, but to recognize that fees are no longer insignificant. Even if the absolute level of fees stays uneven, their share of block value will grow mechanically after the subsidy halves.

The fee market does not replace disciplined planning. A mining operation can remain unprofitable despite long-term bullish expectations if power costs, uptime, ASIC efficiency, or pool strategy are poorly managed.

Pre-halving revenue checklist

1. Model the lower subsidy. Build scenarios for 1.5625 BTC per block instead of today's 3.125 BTC.
2. Add fee scenarios. Model fees at 5%, 10%, 15%, and 20% of block value.
3. Check your pool's payout scheme. Find out whether it uses FPPS, PPS+, or PPLNS and how transaction fees are reflected in payouts.
4. Review ASIC efficiency. Compare older machines with current generations: fee spikes help, but inefficient power use still destroys margins.
5. Stress-test electricity costs. Run scenarios with higher difficulty, lower BTC price, and lower average fees.
6. Track the mempool. Watch fee rates, block weight, and pending transaction volume during token and inscription cycles.
7. Understand payout variance. High-fee blocks are uneven. FPPS smooths expected payouts, while other schemes expose miners to more variance.
8. Follow the transaction-selection debate. Watch changes in node policy, Stratum V2 adoption, and how pools build block templates.

FAQ

How do Ordinals affect Bitcoin miners?

They increase demand for block space. When users pay to inscribe data onto satoshis or transfer inscription-based assets, they compete for confirmation, which can raise fees and increase miner revenue.

How do Ordinals work?

The protocol assigns serial numbers to satoshis and tracks them across transactions. Users can attach data to specific satoshis through inscriptions and then transfer, collect, or trade them.

How many tokens can BRC-20 create?

There is no single limit for the whole standard. Each BRC-20 token defines its own supply and minting limits through JSON data. That is why BRC-20 tokens were easy to copy and launch during the 2023 hype.

What is the difference between BRC-20 and Runes?

BRC-20 uses JSON inscriptions on top of Ordinals and depends on off-chain indexers. Runes uses Bitcoin's UTXO model and OP_RETURN more directly. In short, BRC-20 is inscription-heavy and indexer-dependent, while Runes is designed to be more Bitcoin-native.

Will transaction fees replace the block subsidy?

Not overnight. But as halvings reduce the subsidy, fees must become a larger part of miner revenue for Bitcoin's security budget to remain strong. Miners should model a range of fee scenarios rather than rely on extreme events.

Are Ordinals good for Bitcoin?

It depends on the perspective. Critics call them spam because they raise fees for regular users. Supporters see them as innovation that creates new demand for block space. For miners, Ordinals are economically useful when they increase fees, but the long-term debate remains open.

Do BRC-20 and Runes break Bitcoin?

No. They use valid Bitcoin transactions and do not change the supply cap or consensus rules. But they compete for block space and can increase congestion, which is why they are controversial.

Which pool payout scheme is better when fees are high?

FPPS pays miners a share of expected transaction fees along with the subsidy and smooths variance. Schemes that exclude fees, such as basic PPS, lose this part of revenue, which grows in importance after each halving.

Conclusion

Ordinals, BRC-20, and Runes changed Bitcoin mining not by changing the algorithm, but by changing demand for block space:

1. Ordinals popularized satoshi inscriptions;
2. BRC-20 turned inscriptions into a fungible token experiment;
3. Runes launched at the 2024 halving and showed how expensive block space can become when users compete for a historic moment.

For miners, the takeaway is simple: transaction fees are no longer background noise. They are a growing revenue variable, a signal for the network's security budget, and a key input for planning the next halving. The main question is not whether Ordinals are controversial or innovative, but how much future payouts will depend on the fee market and whether your pool strategy is ready for it.