The Bitcoin halving is an anticipated event, one of those Bitcoin holidays that happen every once in a while. Along with Soft Fork Activation and various financial instrument introduction days, it's one of those not-quite-predictable days that occur every few years which give Bitcoiners reason to pay attention and mainstream media to speculate.
This year's halving was much anticipated, as halvings usually are, but we had a bit of an incident that requires some further explanation. The block subsidy decreased from 6.25 BTC to 3.125 BTC on block 840,000 as expected, but what wasn't expected was the 37.626 BTC in fees that came along with it. To give some context, that's easily the highest ratio of fees to block subsidy that Bitcoin has ever had. One transaction paid nearly 8 BTC in fees by itself.

More Fees

It wasn't just block 840,000 that had high fees, over the next 5 blocks, we had fees of 4.486, 6.99, 16.068, 24.008 and 29.821 BTC respectively. The fees are the highest it's ever been. This situation in Bitcoin is unprecedented.
Up to this point in Bitcoin's history a block whose fees were higher than block subsidy were pretty rare. There were a few in the 50 and 25 BTC eras, but these were mistakes by the user (usually forgetting to put in a change address) and almost all of the fee came from a single error transaction. In the 12.5 BTC subsidy era, there were a few transactions toward the end of 2017 when the cumulative fees exceeded the 12.5 subsidy. In the just-ended 6.25 BTC subsidy era, there were many blocks during the ordinals craze which exceeded the 6.25 BTC subsidy.
Still, these were relatively rare, and most blocks even in the most recently completed era mostly didn't exceeded 1.5 BTC. Yet in this new era of 3.125 BTC subsidy, every single block as of this writing (block 840018) has had fees exceed the subsidy, some by many multiples. So what happened? Why was the halving block getting so much in fees?


The reason has to do with a new protocol called Runes. It's yet another colored coins protocol on top of Bitcoin that Casey Rodarmor designed back in September of 2023. The main idea is to allow coin issuance on Bitcoin that uses the UTXO set natively.
Now to back up a bit, colored coins have been around for a long time. The main idea is that you can "color" certain Bitcoin transaction outputs as meaning something in addition to the Bitcoin amount in the output. It could be another "asset" and issued as a token. The first implementation of such a protocol happened 11 years ago in 2013 and there have been many attempts since, including MasterCoin (renamed Omni), CounterParty, and more recently, RGB, Taro Assets and BRC-20.
As Rodarmor states in his blog, his motivation for making another protocol is to bring some of the asset issuing from other chains to Bitcoin. To make the launch of this protocol more interesting, Rodarmor decided to start the issuance on block 840,000, leading to the chaos we saw.

Simplification vs Game Theory

Casey Rodarmor is also the creator of ordinals, and he took one of the concepts, which was to name assets using the capital latin alphabet on Runes. This is a normal fine choice, but what happens when there's a conflict? If two assets have the same name, how do we distinguish between them?
To simplify things, the protocol just looks up what assets exist already and if the name conflicts with something that exists, then the new asset isn't issued. This indeed simplifies the client and gives a global unique name to each asset. Unfortunately, it also makes for some terrible incentives.

Sniping Asset Issuance

The first incentive problem is that if the transaction issuing the asset is sent out to the Bitcoin mempool, then as that transaction is gossiped to nodes around the network, other observers can snipe the name by getting the transaction in earlier.
Now "earlier" in Bitcoin is a strict concept. Blocks are ordered and transactions within a block are ordered. Whichever comes first gets the symbol and the asset issuance. But if you want to squat on a good symbol name, you can just look for mempool transactions that are attempting to create a new asset and create your own with a bigger fee. That's the essence of sniping.
What's really terrible about a situation like this is that both transactions will likely go into the block, but only the first will successfully issue the asset. The second will not issue the asset but still pay the fee.
Miners generally order transactions by fee rate, so a higher fee likely means that they'll get to issue the asset. I say likely, because there's a second incentive problem here I'll discuss later. But game-theoretically, both participants are incentivized to increase fees continually to one-up each other. The dynamic is similar to the One Dollar Auction, where participants end up making rational choices, but end up with an irrational result (like paying $1.50 for $1). Every loser pays lots in fees for nothing.

Second order Game Theory

Now given this first-order incentive playing out, it's not a surprise that a lot of issuers purposefully put in a very high fee initially to discourage anyone from trying to snipe the symbol. After all, if your sniping attempt fails, then you lose out on the fees you tried to snipe with. There's also a significant uptick in the usage of RBF for this reason, so that you have the option to one-up the sniper and the sniper to do the same to the issuer.
Note that RBF isn't useful here to get out of paying the fee, as a replacement transaction has to pay more than the previous transaction in fees. Either way, the miner ends up with the fees.
Now back to the miner's role. The miner can, if it so desires, give preference to the lower fee transaction by including it earlier in the block. Indeed, the incentive is to give miners off-band fees if possible to order transactions in such a way as to win by not revealing how much you've paid. Miners in this protocol have a lot of leverage.


Runes have resulted in some really high fees, though it's hard to know if the design was intentional or unintentional. What we do know is that Runes have been hyped up for the last few months and have been anticipated for a while, and certainly being one of the first assets issued under the protocol has some marketing value for the eventual goal of getting them listed on an exchange.
Sadly, in addition to the normal scamming of altcoins being completely centralized, there is a deeper cost in terms of block space congestion, where fees of 1000 sats/vbyte are currently not enough to get into certain blocks. The Runes asset issuance has overridden almost every other use case at the moment.
That said, the current rate of Runes issuance is completely unsustainable. Just in the first 18 blocks, there's been over $20M in fees spent, most of that in Runes issuance. At this rate, Runes issuers would be spending $150M a day or $1B a week. I honestly can't see them doing this for much longer than a month or two. In the meantime, it must be great to be a miner finding these blocks.
Sigh this is all so tiresome, I assume we had that quiet period because they ordinoobs were waiting to transition into runetards and because this is "new" the first blocks have to be spammed for the novelty, but my question is always what then? You minted your stuff you're all stake holders, who you selling to?
It's just a bunch of people shilling they "own" something hoping for someone to fall for this and they all waiting for any liquidity on an orderbook and then trying to get out? Is that really the game?
Lol they sure are doing their best to compensate miners for the loss in revenue, good on them
Apparently, there's a minting process that was added to the Runes protocol, so you have to first commit to the symbol using a hash and then reveal some number of blocks later. I was going off of the initial blog post, but a few people have pointed me to the update of the protocol because they saw this same problem. Thus, the one dollar auction dynamic does not happen, though there's plenty of altcoins being launched. There's already over 1000 new altcoins either minted or in the process of being minted on it.
Good explanation. Thanks.
The fees are still high but on the move down.
Jimmy, why you never answer to questions in your posts? People are asking interesting questions but you never come back to discuss your posts. I find this quite odd, especially on SN, where engagement and discussion is much easier. What is the meaning of posting something on SN and never answer ?
At a certain point, you have to make a choice between engaging online and living life. Once you get to a certain audience size, answering questions takes more time from your day than you have. I used to engage and answer questions and like all the comments and so on, but it just became unsustainable.
Take this post, for instance. I posted it and then went to bed and I wake up 8 hours later with 20+ comments. If I thoughtfully replied to each one, that would easily be 2 hours (even this comment is a good 10 minutes). Now multiply by all the other platforms (I post on 6, and this place is one of the least populated). Do the math, it's unsustainable.
But also mentally, it's very hard to be doing that much writing and thinking and arguing. My mind also needs breaks. And frankly, I need that willpower and energy to play with my kids, do deep dives into new signature schemes and work out. You only have so much in a day.
So like a Bitcoin node's mempool, I pick and choose. I engage once in a while on what I think provides the most value. Sorry if your question or comment doesn't make the cut, but honestly, you're a stranger on the internet. My family, friends, faith, finances and fitness all take priority.
I think he just likes to earn sats on SN.
I don't think I've ever seen him comment here.
I think you do not know who is Jimmy Song and for how long he's into Bitcoin.... He is not posting on SN to earn sats, that's for sure. SN is not an assmilking tool for him and he's not interested into this.
Then why does he never comment? Is he above the plebs?
He posts the same content on nostr BTW and probably his website too.
Also Twitter. I'm assuming he's looking at all of these essentially as publication platforms and not conversations. Which is fine to a degree -- he publishes great stuff -- but it would be nice if he engaged for some follow-ups.
SN publishers can engage as they wish. I still appreciate Jimmy's contributions a lot even if he only publishes.
21 sats \ 0 replies \ @OT 20 Apr
Yeah, I mostly agree. Its just that I think he has a bad take sometimes and it would be better if he could discuss it more with the SN community. This is how you refine ideas and develop new ones.
What would you credit-assign the fees to RUNES protocol?
Dude. It's halving. Historic moment. People will bid for blockspace just for making the history. No RUNES needed. And all fee-bidding-war-transactions that did not make it into 840000 block don't disappear from mempool so they spill over to further blocks.
Just wait till all the txs from 840000-fee-bidding-war clear and then we can conclusively talk about RUNES impact on fees.
RUNES-guys made en excellent choice to pick up 840000 block for starting out. They get free coverage from people assigning high fees to them. I didn't even know about that protocol before halving.
Fees dipped in 840,001 compared with later blocks.
my thought exactly. This is people trying to get into the halving block, as is evidenced by the fact that fees cool down again after. The few blocks after were the ones where people had hoped to get into the halving block, but were shifted to one of the next ones. Then, back to normal. unless Runes are a storm in a glass of water-phenomenon (here for an hour, gone the next), this makes way more sense as an explanation.
This was my thinking too. But I guess we can’t exclude the contributions from Runes either.
Runes are a fad that will wither away.....
31 sats \ 1 reply \ @nym 20 Apr
Great post! You answered my question in the last paragraph. These fees are almost entirely due to the creation, or issuance, of Runes. It would be interesting to see a chart showing the ratio of Runes being issued versus being transferred, or bought. Would exchanging a Rune create the same fee spike as an issuance?
Runes issuers would be spending $150M a day or $1B a week Sort live, I hope. Good business for miners.
I honestly don’t see the point to all this. Right now, I’m being forced to receive my money in fiat again because of these fees since they effectively keep me from being able to distribute mu sats amongst my wallets. Pretty lame situation imo. I hope it just dies down sooner rather than later…
65 sats \ 3 replies \ @om 20 Apr
Forced? I'd trust Liquid for a couple of months.
Lol This guy gets it, at least you locked in your sat claim and you can claim those UTXos when runetards run out of money
Thanks for this pointer.
What's the bare bones minimum to know, to be able to use Liquid for a couple months?
And...seriously, the fees are going to be high for a couple months? Yikes...
Read some stuff from and check out the Sideswap wallet (
Bare bones: L-BTC is a BTC-pegged IOU from the Liquid Federation. The Liquid chain resembles the Bitcoin mainchain much more closely than Lightning does (since Lightning isn't a chain). You'd need Liquid-specific wallets though.
Are you aware of LN?
Yes, my friend. The issue is that I cannot receive in LN and I need to use my salary to live, and because I receive from a KYC source and live in a country that heavily controls all on and off ramps, I also need to do coinjoins, and I also have my savings in cold storage. Now, my salary is such that doing all this seems to me that it implies paying at least one 100ish dollar fee. Where I live and with my earnings that is simply not acceptable.
So yes, I'm forced to receive in fiat and buy it after the fact rather than spending a significant fraction of money just to get my money where I want it to be.
Yeah, I am aware of lightning and liquid and I'll have to make do for the time being somehow, but mentioning these things as though they magically fix all people's issues and use cases is really missing the point of the matter.
@om this answer's your question as well.
Thanks for the explanation. It might be that your KYC source doesn't support L2s now but in the high fee environment that might change very quickly. Binance has added LN at the previous fee peak.
With LNs coinjoins aren't needed and don't even make sense. In Liquid they're possible but given that the amounts are blinded by default there's less need to do it.
I'm not saying that L2s magically fix all the problems,. They don't and they especially can't help you with utxos in L1 cold storage. But some problems that they don't fix, like the KYC source problem, may be better ascribed to lazy exchanges or tyrannical govenrments.
Great point
Lots of people on Twitter complaining about losing money.
It's often said, "follow the money", and the miners are making huge amounts off this degeneracy.
If I were a miner with no morals, I would drum up excitement around the halving, convince people they want their jpeg in a block or a rare sat or whatever, and then watch the extra income roll in.
Can't say I like the miners' incentives here... it seems like there's no end to the fools lining up for these scams. Also not sure how this bodes for mining decentralisation long term, as this is a big pay day that will allow an unethical miner to expand and line up the next grift for even further expansion in the future.
I'm no expert, but I have to speak up because I don't see commentary on one of the scariest parts of this. People think it's an unsustainable fad, but what if it is a SUSTAINABLE fad? What if all those unsustainable miner fees are routed by the handful of big mining pools back into the pockets of the fadsters so they can keep on going indefinitely? Do you honestly think any mining company seeking a profit isn't also participating in ways to leverage their block-templating weight to increase their revenue? The high fees of the fadsters force average users to pay more, but the average users don't get back the under-the-table reward like the fadsters do. It's old fashioned shill bidding. This is the single biggest ($1B/week!) argument in support of Ocean & co's goals of putting transaction selection and other critical aspects of mining back into the hands of the workers. I would love it if someone would debunk this hypothesis of corruption among mining pools, so that I can sleep again at night with the assurance that miners are my protectors and not my predators.
Can’t wait to get my 15 sat/vb transaction from a week ago. Just hanging out in the mempool!
This boggles my mind: who on earth would pay 8BTC in fees? Whatever their intentions were, EIGHT bitcoins in fees, really???
Mostly shitcoiners playing with a new chain, but there also seem to be a few prominent guys in the space who support this crap.
  1. Who are all those people interested in Runes? I don't know anyone.
  2. Where did all those people get millions of dollars to pay for this nonsense?
  3. Is there a way to explore the recent transactions and see what Runes people are inscribing?
Shitcoiners printed gains on meme coins and airdrops etc. and then recirculated those gains to pay 10 BTC tx fees to miners. Universe finds its balance.
The first and second questions you asked are the same ones I asked myself.
Does this cause mining centralization? Foundry has caught 2 blocks with a reward of more than 10 BTC the last 20 minutes
By the time a smaller pool finds a block the congestion is likely gone