How Does the Collective Behavior of Miners Create the Current Transaction Fee Market?

The collective behavior of miners creates the transaction fee market through a constant, decentralized auction for limited block space. Each miner, acting in their rational self-interest, selects the highest fee-per-byte transactions to maximize their profit.

This collective prioritization establishes the current "clearing price" for block space, which is the lowest fee rate that is currently being confirmed. As all miners compete to find the next block, their individual choices aggregate to form the dynamic supply and demand curve for transaction inclusion.