Bitcoin's transaction fees have plunged over 80% since April 2024, raising concerns about long-term network security. As of August 2025, nearly 15% of mined blocks carry minimal or no transaction fees, creating challenges for miners whose compensation relies on both block rewards and transaction fees. With the recent halving reducing block rewards to 3.125 BTC, miners are increasingly dependent on a dwindling fee market. This decline in fees is partially linked to a drop in on-chain activity, particularly in OP_RETURN transactions, which have fallen sharply since the 2024 Ordinals boom. As alternative layer 1 solutions gain popularity, Bitcoin's fee market is becoming more elastic, potentially leaving miners with insufficient incentives to secure the network. In response, initiatives like BTCfi are emerging. Unlike DeFi on Ethereum or Solana, BTCfi uses Bitcoin for financial applications, creating movement that drives block space usage and thereby generates fee revenue. If BTCfi succeeds in stimulating on-chain activity, it could help preserve Bitcoin's security model.

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