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 Bitcoin’s April 2024 Bitcoin halving block, 840,000. Together, these protocols reshaped Bitcoin’s transaction fee market. During active periods, transaction fees can account for roughly 5% to 10% of total block value, while block 840,000 alone generated approximately 37.6 BTC in fees. By the 2028 halving, modeling fees at 15% to 20% of block value may serve as a useful planning scenario, though it should not be treated as a guarantee. ViaBTC confirmed that block 840,000 included 37.6256 BTC in transaction fees, and multiple market reports linked the spike to the halving event and Runes activity.

Bitcoin miners historically treated transaction fees as a secondary revenue source, while the block subsidy remained the primary driver of earnings. Ordinals, BRC-20, and Runes changed that dynamic.

They did not change Bitcoin’s 21 million supply cap. They did not alter Bitcoin’s proof-of-work model. What changed was demand for block space. Higher demand led to higher fees, increasing the share of miner revenue generated by transaction fees. More demand meant higher fees. Higher fees meant a larger part of miner revenue came from the transaction fee market.

For traders, Ordinals resembled NFTs on Bitcoin. For investors, BRC-20 and Runes represented meme-token infrastructure and a new speculative layer for digital assets. For miners, they represented a more practical shift: a new source of fee pressure at the exact moment the block subsidy fell from 6.25 BTC to 3.125 BTC during the 2024 halving.

Key takeaways

• Bitcoin Ordinals enables inscribing arbitrary data onto individual satoshis on the Bitcoin blockchain.
• BRC-20 tokens function as fungible tokens created via JSON inscriptions through the Ordinals protocol.
• Bitcoin Runes launched at halving block 840,000 as a fungible token standard using Bitcoin’s UTXO model.
• Halving block 840,000 paid about 37.6 BTC in transaction fees alone, making it one of the most visible fee events in Bitcoin history.
• For miners, the main shift is simple: transaction fees are becoming a real revenue line, not a rounding error.

How bitcoin ordinals work: inscriptions on individual satoshis

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

A satoshi is the smallest unit of Bitcoin. One BTC equals 100 million satoshis. Ordinal theory assigns each satoshi a numerical order, making it possible to identify, track, and transfer specific sats. An inscription attaches data to one of those satoshis. That data can be an image, text, JSON, HTML, or another file type.

Bitcoin Ordinals enables inscribing arbitrary data onto individual satoshis on the Bitcoin blockchain.

The Ordinals protocol assigns serial numbers to each satoshi based on the order in which it was mined. It then uses a first-in-first-out (FIFO), method to track how satoshis move across transactions. This is what makes a specific satoshi traceable and allows additional data, known as inscriptions, to be attached to it.

Ordinals are stored on-chain as part of Bitcoin transaction data, which makes them durable parts of the Bitcoin ledger as long as the network continues to preserve and validate that history. In practice, users can mint Ordinals in a way that feels similar to non fungible tokens: they create transactions that inscribe data onto satoshis, and those inscription-linked sats can then be bought, sold, or traded on a dedicated marketplace.

The technical base came from earlier Bitcoin upgrades. SegWit separated witness data from transaction data and introduced the witness discount. Taproot later made it easier to include more flexible witness data. Ordinals used this design space to put more data into Bitcoin blocks.

Ordinals also introduced a rarity culture around satoshis. Some sats are treated as more collectible because of when they were mined, such as sats from early blocks, halving blocks, or other historically significant moments. That value is social and market-driven, not built into Bitcoin’s consensus rules.

That is why the debate became so heated inside the Bitcoin community. Supporters saw new demand for Bitcoin block space and a new way for the Bitcoin ecosystem to host digital collectibles, art, and other assets. Critics saw unnecessary data, higher fees, and pressure on node operators. For miners, the argument was more direct: if users are willing to pay for block space, that demand enters the fee market.

What are BRC 20 tokens: creating fungible tokens via 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. BRC-20 became one of the first major attempts to create fungible token functionality on Bitcoin without changing Bitcoin’s base consensus rules.

BRC-20 tokens function as fungible tokens created via JSON inscriptions through the Ordinals protocol.

Unlike Ethereum’s ERC-20 tokens, BRC-20 tokens do not rely on smart contracts. They are created by inscribing JSON data onto individual satoshis. That JSON format defines token properties such as ticker, supply, minting limits, and transfer rules. The Bitcoin blockchain stores the inscription data, while off-chain indexers interpret it to track balances, mints, and transfers.

That dependence on indexers is significant. BRC-20 activity can create high transaction demand, but the standard itself is less native to Bitcoin than a UTXO-based design. It also means the Bitcoin base layer stores the data, while indexers provide much of the token functionality users see in wallets, marketplaces, and dashboards.

For miners, the design of the token standard is not the primary concern. The key issue is that BRC-20 minting and transfers created bursts of mempool congestion. During BRC-20 mania, users bid aggressively to get transactions confirmed. That pushed up higher transaction fees.

As of the first major BRC-20 cycle, more than 14,000 BRC-20 tokens had been minted. Market estimates later placed the category around the billion-dollar range, with some references citing approximately $1.67 billion in total market cap depending on date, pricing, and included tokens. For miners, the exact market-cap snapshot matters less than the fee-market signal: BRC-20 became large enough to create real mempool congestion and raise transaction fees.

What are Bitcoin Runes: the Runes protocol and new token standard

Runes is a fungible token protocol created by Casey Rodarmor. It launched in April 2024 at Bitcoin block 840,000, the same block that marked Bitcoin’s fourth halving.

Bitcoin Runes launched at halving block 840,000 as a fungible token standard using Bitcoin’s UTXO model.

The Runes protocol was designed as a more UTXO-native alternative to BRC-20. Instead of using JSON inscriptions and relying heavily on account-style interpretation, Runes uses Bitcoin’s UTXO model. A UTXO, or unspent transaction output, is the basic unit of spendable Bitcoin state. Runes uses that model to issue and transfer fungible assets more directly.

The terminology also differs. In the Runes protocol, token creation is referred to as etching. Transfers use Bitcoin transactions and OP_RETURN data. This made Runes more aligned with Bitcoin’s transaction model than BRC-20, although Runes still competes for block space and can still increase fee pressure when demand spikes. Kraken describes Runes as a fungible token standard created by Casey Rodarmor with a more Bitcoin-integrated design compared with BRC-20s.

Runes offer a different process from BRC-20. Instead of relying on JSON inscriptions to track token logic, Runes use UTXO-based balances and OP_RETURN messages. That makes the protocol easier to explain as a Bitcoin-native asset layer, though it does not remove speculation, liquidity risk, or pressure on block space.

Runes launched exactly when miners were losing half of the block subsidy. That timing mattered. The halving reduced the subsidy from 6.25 BTC to 3.125 BTC, while Runes demand created a fee spike around the same block. Investopedia reported that the Runes launch around the halving helped drive higher fees because users competed to mint digital tokens directly on Bitcoin.

The key differences between Ordinals, BRC 20, and Runes

The key differences are easiest to see through miner economics.

Ordinals made Bitcoin block space useful for data and digital assets. BRC-20 made that data speculative and repeatable by allowing users to create fungible tokens through JSON inscriptions. Runes introduced a new token standard built around Bitcoin’s UTXO logic.

Other token standards may still appear in the future. That is the nature of blockchain technology: new users, new assets, and new experiments keep testing what the base layer can support. For miners, the question is not whether every protocol survives. The question is whether each wave creates enough transaction demand to affect revenue.

How they changed the Bitcoin network fee market

Before Ordinals, Bitcoin fees mattered, but most miners still thought primarily in terms of block subsidy, hashprice, electricity cost, and difficulty.

Ordinals changed the demand curve. It created a new class of users who wanted Bitcoin block space not only for financial transfers, but also for inscriptions, collectibles, token mints, and protocol launches.

After Ordinals appeared, the upper range of average Bitcoin block size rose from a steady 1.5-2.0 MB to around 3.0-3.5 MB during active inscription periods. That did not mean every block stayed that large forever. It meant new demand could fill more of Bitcoin’s available block weight.

Public inscription trackers and market coverage showed 46 million+ inscriptions after the January 2023 launch, making it clear that demand was not limited to a few early collectors. The important shift was not only that users created inscriptions. It was that they created enough on-chain activity to compete with regular Bitcoin transfers for limited block space.

BRC-20 also created a measurable block-space load. BitMEX estimated that BRC-20 tokens used 13.9 billion weight units, while image inscriptions used 8.9 billion weight units. BitMEX also estimated that BRC-20 transactions had paid more than 5,000 BTC in transaction fees since the protocol was invented.

That matters because miner revenue increases when users compete for limited block space.

For miners, the new fee market has three effects:

1. Fee spikes increase gross block value.
2. Fee volatility makes daily revenue harder to forecast.
3. Fee markets become more important as each halving cuts the subsidy.

That last point is the strategic one. The subsidy keeps shrinking. Transaction fees are widely viewed as the long-term replacement for declining block subsidies.

Mining revenue before vs after Ordinals

Bitcoin miner revenue has two main parts:

• Block subsidy: newly issued BTC per block
• Transaction fees: payments from users competing for block space

Before Ordinals, a miner’s daily revenue model could often treat transaction fees as a smaller variable. After Ordinals, BRC-20, and Runes, fees became a serious line item.

A simplified Antminer S21 Pro example illustrates the difference. The S21 Pro is commonly listed at 234 TH/s, 3 510 W, and 15 J/TH. This example assumes the same miner, network difficulty, and BTC price. It is intended as a directional model rather than a live profitability estimate.

A rough example:

• If a block is worth 3.125 BTC from subsidy plus 0.15 BTC in fees, fees add about 4.6% to gross block value.
• If a block is worth 3.125 BTC plus 0.50 BTC in fees, fees add about 13.8%.
• If a block is worth 3.125 BTC plus 1.00 BTC in fees, fees add about 24.2%.

The miner’s share of the block does not change. What changes is the total value being shared.

If fee markets become structurally larger, mining pool models, payout methods, and fee distribution mechanics will become increasingly important.

The Bitcoin halving event at block 840,000: record tx fees

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

It was the fourth Bitcoin halving block. The block subsidy dropped from 6.25 BTC to 3.125 BTC. It was mined by ViaBTC. It also carried an extraordinary fee load.

ViaBTC stated that block 840,000 contained transaction fees totaling 37.6256 BTC. CoinDesk and other market reports put the fee value at more than $2.4 million at the time.

Halving block 840,000 paid about 37.6 BTC in transaction fees alone.

That means the fee portion alone was about 12 times larger than the new 3.125 BTC subsidy.

On April 20, 2024 UTC, Bitcoin miners collectively earned about $78.3 million in transaction fees, setting an all-time high in US dollar terms. That day was an outlier, and fees later declined. However, it demonstrated that users may pay exceptionally high fees when block space becomes culturally, financially, or historically scarce.

Why some users support Bitcoin Ordinals for long-term mining security

Bitcoin security depends on miners being paid enough to secure the network. Today, miners receive the block subsidy plus transaction fees. But the subsidy halves roughly every four years.

That means the transaction fee market has to matter more over time.

Supporters argue that Bitcoin Ordinals can strengthen the Bitcoin network’s long-term security by increasing demand for block space. As block rewards diminish over time, a stronger fee market may help sustain miner revenue and, by extension, Bitcoin’s security budget.

This is why Ordinals, BRC-20, and Runes extend beyond NFT-related speculation. They are tests of whether Bitcoin can develop durable block space demand beyond simple payments.

The miner-focused argument is straightforward:

• More block space demand means higher fee pressure.
• Higher fee pressure supports miner revenue.
• Stronger miner revenue supports hashpower.
• Stronger hashpower supports Bitcoin’s security budget.

This does not mean every inscription wave is healthy or sustainable. Fee spikes can be temporary. Token manias can fade. But the existence of non-payment demand for Bitcoin block space is important.

If transaction fees are 5-10% of block value during active periods today, miners should model 15-20% by the 2028 halving as a planning scenario, not as a guarantee. The 2028 subsidy will fall again, so the fee share of total block value will mechanically matter more even if absolute fee levels remain uneven.

The controversy: bitcoin community debate over spam vs innovation

The debate surrounding Ordinals is unlikely to disappear.

Critics argue that inscriptions and token mints create spam, increase mempool congestion, raise fees for ordinary users, and add pressure to node operators. Some Bitcoin users want Bitcoin optimized for monetary transfers only. They see BTC primarily as currency or hard money, not as a home for NFTs, tokens, and speculative assets.

Luke Dashjr, a Bitcoin Core developer and maintainer of Bitcoin Knots, has been one of the most visible critics of inscriptions. The Bitcoin Knots client has included policy changes aimed at filtering certain inscription-style transactions from node mempools. This matters because the disagreement is not only cultural. It touches node policy, relay rules, and what different users think Bitcoin should prioritize.

Supporters argue that Bitcoin block space functions as a market. If a transaction is valid and includes the required fee, miners can include it in a block. From this view, Ordinals and Runes are not breaking Bitcoin. They are revealing demand.

The mining perspective remains pragmatic. Valid transactions that pay higher fees raise block value. But miners also need a robust network, decentralization, and censorship-resistant block construction.

That is where Stratum V2 becomes relevant. Stratum V2 can improve mining protocol design and support more decentralized transaction selection by giving miners more ability to construct block templates instead of relying entirely on pools. If fee markets become more political, transaction selection will matter more.

So the debate is not only ‘spam or innovation?’ It is also: who decides what gets into blocks, and how decentralized is that decision?

What this means for the 2028 Bitcoin halving

The 2024 halving showed what happens when a new protocol launch collides with a historic block.

By 2028, the subsidy will halve again, from 3.125 BTC to 1.5625 BTC. At that point, transaction fees will need to carry more of the economic weight.

Mining operators should not assume every day will resemble block 840,000. Such assumptions would be unrealistic. The better approach is to model several fee regimes.

The goal is not to predict a single fee figure. The priority is recognizing that transaction fees are no longer insignificant.

For miners, the 2028 playbook should include hashrate planning, electricity contracts, ASIC efficiency, pool payout terms, and fee-market sensitivity.

Why this is not just a buy Bitcoin story

Some users look at Ordinals, BRC-20, Runes, the halving event, ETFs, market liquidity, and broader crypto cycles as reasons to buy Bitcoin, sell Bitcoin, make purchases with BTC, or invest in Bitcoin-linked assets. That may be a market narrative, but it does not reflect mining economics.

For miners, the practical question is different. It is not only whether Bitcoin price rises after a halving event. It is whether fee demand, block subsidy, mining difficulty, electricity cost, and pool payout structure together support equipment-level economics.

Mining operations can remain unprofitable despite long-term bullish Bitcoin assumptions if power costs, uptime, ASIC efficiency, or pool strategy are poorly managed. Fee markets matter because they affect operating revenue, not because they replace disciplined mining planning.

Pre-halving revenue checklist

Before the 2028 halving, miners should run a fee-aware revenue review.

1. Model subsidy reduction

   Build scenarios for 1.5625 BTC subsidy per block, not today’s 3.125 BTC.

2. Add fee share scenarios

   Model transaction fees at 5%, 10%, 15%, and 20% of block value.

3. Check pool payout method

   Understand whether your pool uses FPPS, PPS+, or PPLNS, and how transaction fees are reflected in payouts.

4. Review ASIC efficiency

   Compare older machines with current-generation hardware. Fee spikes help, but inefficient electricity use still destroys margins.

5. Stress-test electricity cost

   Run scenarios with higher difficulty, lower BTC price, and lower average fees. While not glamorous, this step remains essential.

6. Track mempool congestion

   Watch fee rates, block weight, and pending transaction volume during Ordinals, BRC-20, and Runes cycles.

7. Understand payout variance

   High-fee blocks are not evenly distributed. FPPS can smooth expected payouts, while other models may expose miners to more variance.

8. Prepare for transaction-selection politics

   Monitor Bitcoin Knots, Bitcoin Core policy debates, Stratum V2 adoption, and pool-level template construction.

FAQ

How do Ordinals affect Bitcoin miners?

Ordinals affect Bitcoin miners by increasing demand for block space. When users pay to inscribe data onto satoshis or transfer inscription-based assets, they compete for confirmation. That can raise transaction fees, which can increase miner revenue when those fees are included in block rewards or reflected in pool payout economics.

How do Bitcoin Ordinals work?

Bitcoin Ordinals work by assigning serial numbers to satoshis and tracking them across transactions. The protocol uses ordinal theory and a FIFO tracking method to follow satoshi movement. Users can attach data to specific sats through inscriptions, creating inscription-linked satoshis that can be transferred, collected, or traded.

How many tokens can BRC 20 create?

BRC-20 does not have one universal token limit for the whole standard. Each BRC-20 token defines its own supply and minting limits through JSON inscription data. That is why BRC-20 became easy to copy, launch, and mint during the 2023 hype cycle, and why more than 14,000 BRC-20 tokens appeared during the first major wave.

What is the difference between BRC-20 and Runes?

BRC-20 uses JSON inscriptions through the Ordinals protocol to create and transfer fungible tokens. It depends on off-chain indexers to interpret token state. Runes is a newer fungible token protocol by Casey Rodarmor that uses Bitcoin’s UTXO model and OP_RETURN more directly. In simple terms, BRC-20 is inscription-heavy and indexer-dependent, while Runes is designed to be more Bitcoin-native.

Will transaction fees replace block rewards?

Transaction fees will not replace the block subsidy overnight. But as halvings reduce the subsidy, fees must become a larger part of miner revenue if Bitcoin’s security budget is to remain strong. The 2024 halving showed that fee spikes can temporarily dominate block value, but miners should model a range of fee scenarios rather than rely on extreme events.

Are Ordinals good for Bitcoin?

It depends on the lens. Critics call Ordinals spam because they increase block space demand and can raise fees for regular users. Supporters call them innovation because they create new demand for Bitcoin block space and strengthen the fee market. For miners, Ordinals are economically useful when they increase transaction fees, but the long-term network debate remains open.

Do BRC-20 and Runes break Bitcoin?

No. BRC-20 and Runes use valid Bitcoin transactions. They do not change Bitcoin’s supply cap or consensus rules. They do, however, compete for block space and can increase mempool congestion. That is why they are controversial.

Conclusion

Ordinals, BRC-20, and Runes did not change Bitcoin mining by changing the mining algorithm. They changed mining by changing demand for block space.

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

For miners, the takeaway is simple: transaction fees are no longer small background noise. They are an emerging revenue variable, a security-budget signal, and a planning input for the next halving.

By 2028, miners that continue modeling revenue as “subsidy first, fees second” may be relying on outdated assumptions. The more important question is not whether Ordinals are controversial or innovative. The more important question is how much future payouts will depend on the fee market—and whether mining pool strategy is prepared for that shift.