Ethereum

Token

Fractal Bitcoin

April

Fractal Bitcoin—a sidechain scaling solution for Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="null" text="null" title="null">BTC</a>) 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<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/converting-mining-sites-ai-data-centers-not-seamless-sabre56-ceo" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> retool facilities for AI</a> 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.
<figure><img alt="Fractal Bitcoin: good or bad for mining revenues?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191c313-9a34-7951-b51b-ccdc5ff1d241">
 <figcaption style="text-align: center;">
 Fractal Bitcoin token distribution. Source: <a data-ct-non-breakable="null" href="https://theminermag.com/news/2024-09-05/fractal-bitcoin-merge-mining/" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://theminermag.com/news/2024-09-05/fractal-bitcoin-merge-mining/">TheMinerMag</a>
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<h2 id="tokenized-assets-on-the-bitcoin-network-as-a-source-of-miner-revenue">Tokenized assets on the Bitcoin network as a source of miner revenue</h2>
Although the mania surrounding Bitcoin Runes, ordinals, BRC-20 tokens, and inscriptions has<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-runes-transaction-trends" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> sharply declined</a> since their inception, these tokenized assets still provide a healthy source of revenue for Bitcoin miners.
Related:<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-miner-monthly-revenue-11-month-low" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> Bitcoin miners see worst revenues in 11 months as difficulty climbs</a>
Directly following the halving event in April 2024, the minting of Bitcoin Runes<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/miners-reap-bitcoin-runes-fees" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> contributed 1,200 BTC</a> in network fees to miners by the end of that same month—initially offsetting the decreased block subsidy.
<figure><img alt="Fractal Bitcoin: good or bad for mining revenues?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191c314-fd99-77ab-b649-9db79c4f8e16">
 <figcaption style="text-align: center;">
 Bitcoin transaction fees are broken down by type. Source: Dune Analytics
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Since that time, Bitcoin Runes have produced approximately<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-runes-nft-protocol-transaction-fees-stats" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> $162.4 million in fees</a>—this is not counting ordinals, BRC-20 tokens, or other forms of tokenized assets on the Bitcoin network.
<h2 id="collapse-of-ethereum-layer-1-revenues">Collapse of Ethereum layer-1 revenues</h2>
If Fractal Bitcoin and other Bitcoin layer-2 solutions become successful, they could create a situation reminiscent of the<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-network-revenue-collapses-third-quarter-2024" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> layer-1 revenue collapse</a> on the Ethereum network.&nbsp;
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.
<figure><img alt="Fractal Bitcoin: good or bad for mining revenues?" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191c316-ec92-7908-9c42-9fcf908810ad">
 <figcaption style="text-align: center;">
 Ethereum layer-1 revenue. Source: Token Terminal
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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:<a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-layer2-sidechains-not-really-bitcoin-l2s/" rel="noopener noreferrer nofollow" target="null" text="null" title="null"> ‘Bitcoin layer 2s’ aren’t really L2s at all: Here’s why that matters</a>

Fractal Bitcoin: good or bad for mining revenues?

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Cointelegraph

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