We document that blocks on the blockchain are rarely filled to capacity, even thoughthere is excess demand for block space by fee-paying users who want their transactions tobe recorded. In spite of this, higher fee orders are not always prioritized. We show thesepatterns are consistent with miners exercising market power: If users believe that only highfee transactions will be executed expeditiously we show how strategic capacity managementcan be used to extract higher fee revenue. Using a novel data set, we provide evidenceconsistent with this market power, and estimate that mining pools have extracted least 300million USD a year in excess fees by making processing capacity artificially scarce.