The fee market for Bitcoin has experienced a decline due to decreased onchain activity, creating difficulties for miner revenue. Examining the effects of OP_RETURN transactions and the security of the network. According to a recent analysis, Bitcoin’s onchain activity and fee market have entered a period of stagnation. This situation arises against a backdrop of decreasing non-monetary activity and a notable decline in transaction fees, prompting worries regarding the long-term viability of miner revenue.
Since late 2024, Bitcoin’s onchain usage has seen a decline, resulting in an increase in “free blocks,” where the average fee is one satoshi or less per virtual byte. This trend, while advantageous for users looking for affordable transactions, creates challenges for miners who are already facing diminished block rewards after the 2024 halving. The median daily fee has dropped by more than 80% since April 2024, with around 15% of daily blocks currently classified as “free blocks.” This decrease in fee pressure underscores a notable change in the fee market, which is essential for bolstering miner revenue as block rewards keep declining. During the peak adoption of Runes in mid-2024, OP_RETURN transactions, which enable the embedding of arbitrary data in Bitcoin transactions, experienced a significant surge, making up 40-60% of daily transactions. However, this share has since decreased to approximately 20% by August 2025. Even with this downturn, OP_RETURN continues to serve as a resource for developers and institutions to embed data on the blockchain, igniting discussions about its influence on the sustainability of the network.
The forthcoming Bitcoin Core v30 release, which suggests larger and multiple OP_RETURN outputs for each transaction, has encountered criticism regarding potential spam and blockspace usage issues. Developers highlight that the choice to relay or mine larger OP_RETURN outputs is ultimately up to the discretion of individual node operators and miners. The mempool of Bitcoin, which serves as the holding area for transactions awaiting confirmation, has experienced a rise in blocks that are not completely filled, with almost half being non-full in the past few months. This indicates a deficiency in transaction competition and prompts inquiries regarding the future of miner incentives, particularly as an increasing amount of BTC is stored in custodial solutions like ETFs become more popular for trading and speculative endeavors. Additionally, more than 1.5 million BTC remain stored in legacy P2PK addresses, which face risks from potential quantum computer attacks because of their exposed public keys. Currently, P2WPKH possesses the largest portion of unspent BTC, indicating changes in address format usage and considerations for network security.
The present condition of Bitcoin’s fee market and onchain activity offers a mix of challenges and opportunities. Although reduced fees provide immediate advantages for users, the future effects on network security and miner earnings are still unclear. As Bitcoin’s function as a settlement layer progresses, the network needs to tackle these dynamics to uphold its fundamental value of being a decentralized, censorship-resistant monetary system.