How Do Transaction Fees Contribute to a Miner’s Overall Profitability?

Transaction fees are a crucial component of a miner's revenue, especially as the block subsidy (the new coins created with each block) halves over time. Miners include transactions with the highest fees in their blocks to maximize profit.

In periods of high network congestion, transaction fees can sometimes exceed the block subsidy, becoming the dominant source of revenue. This fee mechanism is vital for the long-term economic security of the blockchain, as it ensures miners remain incentivized to secure the network even after the subsidy diminishes.