XRP Fee Burn vs Bitcoin Fees: Why Every XRP Transaction Destroys XRP

Every transaction that you send destroys a little XRP. It isn't paid to a miner, it isn't paid to Ripple, it isn't paid to the people running the network. It's simply wiped out and the total supply goes down by that amount. Now, Satoshi built Bitcoin the other way. In Bitcoin, the fee you pay goes to the miner who puts your payment into a block.

And in Satoshi's own plan, written down in 2008, those fees are supposed to take over from new coins as the main way miners get paid. So, Bitcoin's fees are meant to pay for its security one day. Yours, they just vanish. So, if you own XRP, like I do, read what Satoshi wrote about fees before you believe the XRP burn hype. Because the two designs answer the same question in completely opposite ways and once you see why, a lot of the noise about burning starts to make sense.

There's a link in the description, guys, that I'm going to explain before the 5-minute mark and it's there for anyone who's ever felt they hold real money in crypto without really knowing what it cost them. Or, to be honest, what they'd do if things changed. Now, here's the honest bit. A lot of us have never looked at what we pay. We pay exchange fees, spreads, network fees, and withdrawal charges and most of us never actually add them up.

We look at the price and that's about it. And if we don't know what our own money costs to move, then it's hard to feel in control of the bigger decisions, either. So, if we're going to be starting where Bitcoin started on the 31st of October, 2008, Satoshi Nakamoto put out the Bitcoin white paper. It's only nine pages long, right? Super, super small.

And a lot of people never read past the first page. Section six is called incentive and that's where he explains how the people running the network get paid. There are two parts to it. The first is the new coins. Whoever adds a new block to the chain gets a reward of a freshly created Bitcoin.

The second part is fees. And if the money is going into a payment is more than the money coming out, then the difference is a fee and it goes to whoever adds to the block. Then he writes the sentence this whole video turns on, right? "Once a set number of coins have entered circulation, the incentive can move entirely to a transaction fees and be completely inflation-free." So, the plan was simple. New coins pay the miners at first and fees take over later and that's the whole idea in one line.

Hold on to what I just said because the XRP ledger was built with no miners at all and here's David Schwartz on one of its original architects on how it started. So, we start I started working in November of 2011 on replacing Bitcoin's proof-of-work consensus with a distributed agreement algorithm. And we discovered fairly quickly that it would work. That you could do it and it would produce some different properties from Bitcoin. So,

there's no mining and there's no block reward. Now, in Bitcoin, someone collects your fee and on the XRP ledger, nobody does. Keep the difference in your head for the rest of this video, right? Cuz it's going to be super, super important and also, this is not financial advice. I need to say that clearly.

I'm doing this for educational purposes only. I do it cuz I love to research. I love XRP. I love crypto. I love to get the real facts out.

But, my opinion might not be the same as yours. The facts will be the same and that's something that I pride myself on. Whatever facts I find, you can find, but my opinion might be different. Now, let me know in the comments if yours is different. I'd love to debate with you.

Let's roll the intro.

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Welcome back, bull runners. If you have been here before, please check the hit the subscribe button. If you're brand new here, welcome. My name is George Lee. There's many of us on this channel and what we do is bring facts to you so you can research yourself.

Now, before we get into Satoshi's forum post, let's come back to that problem for a second. Most of us could tell you the price of XRP to the cent, right? Far fewer of us can actually tell you what we paid to buy it, what it cost to move or what it cost to hold it and where it sits. And when nobody's shown us how to look, we tend to leave it all to whichever app we happen to download first. We just trust that the fees are normal, right?

David Schwartz made a point about this in July 2025 that's worth hearing and I'm going to let you hear it now.

People would not People want They They want the fees like obscured and hidden. They want middlemen. They want They want a bank to tax their transactions rather than them paying, you know, $2 a month to access the system.

Hidden fees feel painless, but the fees are the same and that's the trap that a lot of us fall into. Am I telling you to buy XRP? No, there might be better opportunities for your situation. I don't know. I've never met you.

But, whatever you hold, you should know what it costs and what your plan is. Now, our Altcoin Pro course, they're different. They can help you if you get on a call with them. All All they can help you with which or exchanges holding your coins, what you're paying along the way, how much of the money one coin should carry and what you do if the market turns. Here's how to get it booked.

Go to the first link in the description, fill in a short short form, then simply book your free 15-minute call. One of the team then is going to walk you through your own strategy and your own situation. All right, it doesn't cost you anything and they'll give you a better idea than I can. So, if you're watching this on your phone, just tap the more button under the video and it's the first link you're going to see. Do that now while you're thinking about it and then come back because Satoshi made a prediction about fees in 2010 that's extremely easy to check.

Now, in February 2010 in a thread on the Bitcoin forum about Bitcoin's economy, wrote about where the miners pay would come from in the long run. He actually sounded very confident and in a few decades when the road gets too small, the transaction fee will become the main compensation for nodes. Then guys, he added this, "I'm sure that in 20 years there will either be very large transaction volume or no volume." Now, that's a bold thing to say, right? He's betting that around 2030 Bitcoin will either be used so much that fees can pay for everything or actually won't be used at all. Now, there's no middle option in that sentence and the reward, to be honest, really does keep getting smaller which matters a lot to miners.

Now, here's how Meltem Demirors, formerly the crypto fund manager at CoinShares, put it on CNBC just hours before the 2024 halving.

So, basically what that means is there's less inflation, less new Bitcoin mined. And what that means for miners who currently are getting 80 to 90% of their revenue from that block reward and not from those transaction fees, it means their revenue potentially is going down.

The reward started at 50 Bitcoin a block in 2009 and it halves roughly every four years. It fell to 25 in 2012, 12 and a half in 2016 and 6 and a quarter in 2020. And on the 20th of April 2024, it dropped to 3.125. The very last new Bitcoin is expected around the year 2140 and after that, fees are the only reward there is. Now, the second thing Satoshi wrote a lot about was scale.

In early November in 2008, only days after the white paper came out, a member of the cryptography mailing list told him it didn't seem to scale to the size it would need. Satoshi replied with some math. He said, "Visa processed 37 billion transactions in its 2008 financial year, which is about 100 million a day." and he worked out that handling that many would take about a hundred gigabytes of data a day. Or in his own words, about $18 of bandwidth. So, he said who he thought would do the work.

The current system where every user is a network node is not the intended configuration for large scale. And a little further down, he actually said these few nodes will be big server farms. But, in 2010, he also did something that pulled in a different direction. He quietly added a limit of 1 megabyte on the size of each block, and he didn't write a long public explanation, right? And it's widely described as a guard against spam.

So, no one could actually flood the chain with junk cheaply. A small blockchain size also means so many payments fit in each block. And when people want that, they bid against each other with fees. So, on the 4th of October 2010, he said the limit could be raised later. Phrased in from a future block number, so old software would be out of date by the time it kicked in.

He stepped back from the project a few months later, and that change never happened the way he described. Now, years later, the fight over the block size split the Bitcoin community, and in August 2017, a group broke away to form Bitcoin Cash with bigger blocks. So, how has Satoshi's fee plan worked out? Honestly, it's had a bumpy ride. And when the network gets busy, fees jump.

Now, on halving day, the 20th of April 2024, Bitcoin's transaction fees hit a record high, according to Forklog, as a wave of new tokens called runes launched on the chain that same day. For a short while, fees made up a huge slice of what miners earned. But, when things are quiet, fees almost disappear. And in August 2026, Cointelegraph reported that fees made up 0.7% of miners' revenue, which it called a 10-year low. So, in August 2026, more than 99% of what miners earned came from new coins, and less than 1% from fees.

And the new coins actually kept halving. This is what Bitcoin call the security budget question. If fees stay that small while the reward keeps shrinking, then what pays the miners in the long run? Here's the optimistic answer from the Bitcoin educator Andreas Antonopoulos. Back in October 2026, actually I'm going to let you watch this, all right?

Because this is really, really important. The important thing to realize is this happens very, very gradually, and it happens in an environment where the reliance on senior edge drops while presumably the number of transactions and activity rises, which means the transaction fees rise. And what it should do if you look at it in the graph is it should do kind of a curved X. Right? So, fees go up, reward goes down.

That's the hope. The worry is that the fees don't rise fast enough and Satoshi's 20-year bet runs out around 2030. Now, it's one of the big open debates in Bitcoin. The key thing for us here is this. In Bitcoin, somebody needs fees to be meaningful and that's the design.

On the XRP ledger, the computers that agree on each new version of the ledger, called validators, they don't get a block reward and they don't get the fees. Nobody is paid for adding your transaction. So, what's the fee for? Well, the ledger's own documentation answers this directly. It says to protect the XRP ledger from being disrupted by spam and denial of service attacks, each transaction must destroy a small amount of XRP.

A denial of service attack just means flooding a system with junk so real users can't get through. And the documentation spells out where the money goes. It's not paid to anyone. The XRP is irrevocably destroyed. And so, in Bitcoin, the fee is a payment.

In XRP ledger, the fee is a toll nobody collects. It's there to make spam expensive, not to pay anyone's wages, right? How small is it? Well, the usual minimum according to the documentation is 10 drops. Drops are tiny, right?

It takes a million of them to make one XRP. So, 10 drops comes to 100,000th of a coin. Put it another way, a thousand ordinary transaction at the minimum destroy 100th of a single XRP between them. Here's the clever part though. When the ledger is under heavy load, the cost climbs steeply.

So, a normal user barely notices the fee, but anyone trying to flood the network finds it goes really expensive. And the base level isn't set by Ripple. The validators vote on it under a process the documentation calls fee voting. So, how much actually has been burned? Well, this is where the hype and the math part completely.

The ledger started with 100 billion XRP across roughly 14 years of fees. A little over 14 million had been destroyed according to the on-chain trackers quoted in the coverage in 2026. Now, that's less than 200th of a percent of the supply. And on On 24th of June 2026, the Crypto Basic did the sum the other way around. At the burn rate of the time, it worked out that it would take about 720,913 years to bring the supply down to 500 million.

So, when someone tells you the burn is about to make XRP scarce, then that's not what the numbers say. The burn is real and it only goes one way, but it was never designed to shrink the supply in any meaningful way, right? It was designed to stop spam and you can check this one yourself for free. Open any XRP ledger explorer, look at one of your own transactions and find the line that says fee. You will often see something like 0.000012.

That's what you paid and that's what was destroyed. The difference between the two designs came to a head in early October 2026. An XRP holder floated the idea of raising the ledger's base fee by 100 times, so more XRP would be burned. But from the coverage part of the debate, that was about fee revenue rankings where the XRP ledger looks weak next to other chains. David Schwartz, by then Ripple's chief technology officer emeritus, pushed back, right?

On the 6th of October 2026, 24/7 Wall Street summed up his view in the headline: "Fee revenue is the wrong metric." And you can see why. Fee revenue is a sensible thing to measure on a chain like Bitcoin where fees are meant to pay for security one day. But on the XRP ledger, nobody clicks the fee. A higher fee wouldn't pay validators a penny. It would just make every payment more expensive on a ledger that pitches itself to banks and payment firms as fast and cheap.

So, it doesn't make sense. So, to prefer to the other side, the critics have a point worth hearing, right? If fees are tiny, then using the ledger doesn't create much direct demand for XRP through burning. It has Its value has to come from the people wanting to hold and use it, not from fees eating to supply. That's a real trade-off.

Satoshi, who got asked how you keep a network secure when nobody's in charge, said this. His answer was to pay the people who secure it first with the new coins and then with the fees. So, in Bitcoin, fees have to matter. The XRP ledger has a different question. If the people agreeing on the ledger don't need paying, what's a fee for?

His answer was to make a spam cost something and to destroy the payments so nobody profits from it. Schwartz explained who he thinks the ledger is really for. Check this out. I like the idea of a ledger that like exists for the benefit of the people who use it to transact. Every other ledger seems to exist for the benefit of like some token holders.

But like if you're an exchange, you're not a token holder.

Yeah.

But you're the you're the people who use the ledger. Like you build your business around it. And like I feel like the the transactors are the real stakeholders.

So the fee stays tiny on purpose, right? And the burn is a side effect, not a plan to make a coin rare. Neither one is a trick. Bitcoin is betting the fees grow big enough to pay for its security. Now the XRP ledger is betting that keeping payments cheap is worth more than a burn.

So the next time a post tells you that the burn is about to change everything, just read what the designers actually wrote. Satoshi's words are public, and so are the ledger's own rules. Now here's my question for the comments. If you could set the XRP ledger fees yourself, then would you leave it tiny? Or would you raise it?

And if you would raise it, how much? If you like seeing the original documentation behind the big crypto arguments, guys, hit the subscribe button. We're going to be doing this every single day. But do remember crypto carries risk, and past results are no guarantee of future ones. This is education, not financial advice.

As always, stay bullish. Oh.