Bitcoin’s fourth block reward halving, which occurred at 3:09 a.m., was followed by a transaction fee war. In the 840,000th block where the halving occurred, rewards dropped from 6.25 BTC to 3,125 BTC, while transaction fees reached 37,626 BTC ($2.4 million), more than more than 10 times that amount. This was also a record in Bitcoin history for the amount of transaction fees to block reward.

But why was the total transaction fee paid in the halving block so high, when it was 1 BTC in the previous block?

The answer lies in the Runes protocol, which was launched alongside the halving.

Runes is a new protocol created by Casey Rodarmor, the developer of the Ordinals protocol, which allows NFT creation by writing data to satoshis, the smallest unit of Bitcoin, equivalent to one hundred millionth of a Bitcoin. Runes, which allows for the first time to issue interchangeabl tokens on Bitcoin, introduces a new token standard that is proposed as a better and simpler alternative to the BRC-20 standard in Bitcoin.

Bitcoin developer Jimmy Song says the post-halving record transaction fees were driven by the competition to be one of the first teams to issue tokens on the Runes protocol (high marketing value) and to get the best name (also high marketing value) . Because Runes does not allow another token with the same name to exist to avoid any confusion.

As is well known, miners usually rank transactions according to the fees paid. The transactions with the highest fees are placed first. This, along with the race to be the first team to issue tokens on the Bitcoin blockchain and to grab the best name, caused the total fees paid to skyrocket.

As a result, over $54 million in transaction fees were paid in the first 60 blocks after the halving. The vast majority of this was spent on issuing Bitcoin tokens. The first tokens mined were Uncommon Goods, Decentralized, Satoshi Nakamoto, The Runix Token, Dog Go To The Moon, Meme Economics.