Bitcoin Network Faces Surge in Fees Amid Unconfirmed Transactions: Mining Costs Soar Post-Halving
Summary:
The Bitcoin network is facing a significant increase in network fees due to 332,000 pending transactions. The escalated fees, ranging from $50-52 per transaction, are believed to be a result of OKX, a centralized exchange, sifting through multiple wallets. This surge is highlighting issues faced by Bitcoin miners, particularly after halving. Bitfarms reported a 42% drop in mining revenue in May, and since 2024, U.S. miners have poured over $2.7 billion into electricity. Additionally, the cost to mine a single Bitcoin has more than doubled to $110,000 following the halving event.
The Bitcoin network is presently witnessing a drastic surge in network charges fueled by 332,000 pending transactions as of June 7, 12:05 pm Eastern Time. Network charges touched 514 sats for high-priority transactions and 513 sats for lesser-priority operations, with rates escalating upto around 520 sats per transaction earlier on the same day. In the context of U.S. dollars, it amounts to fees ranging from $50 to $52 per operation. Priority charges however have now decreased to approximately $46 per transaction.
As reported by blockchain correspondent Colin Wu, it is speculated that the 332,000 pending transactions could be a result of centralized exchange OKX consolidating and sifting through various wallets, although, this has not been officially substantiated at the time of reporting.
After the halving, the economics and the challenges confronted by Bitcoin miners in terms of miner difficulty, soaring network charges and miner profitability within the Bitcoin network have been brought into stark relief.
The reduction in block reward from 6.25 Bitcoin (BTC) to 3.125 BTC at the close of April has considerably hampered miner earnings. Bitfarms, for instance, revealed a 42% reduction in mining income for May - the first complete month after the recent halving. The company reported in its monthly statement that it earned 156 BTC in May as opposed to 269 in April.
Bitfarms also clarified that May's uncommonly low temperatures in its Argentina establishment resulted in some of the worst weather in 44 years. This unfortunate weather led to an eight-day closure of the Rio Cuarto facility, further leading to a decrease in the total number of Bitcoins mined.
Since the commencement of 2024, Bitcoin miners in the U.S. have expended a total of $2.7 billion on electricity, in spite of the increasing computing difficulty and diminishing rewards.
Analyst Paul Hoffman states, “From the beginning of 2024, Bitcoin mining in the U.S. has used an astoundingly high 20,822.62 GWh of electric power.” He further stated that the energy consumed by Bitcoin miners in 2024 alone could supply 1.5% of U.S. households for a whole year. During April, the average cost to mine a single Bitcoin was approximately $52,000. After the halving, the expense to mine a single Bitcoin has more than doubled to an average of $110,000.
Published At
6/7/2024 9:06:04 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.