Bitcoin Transaction Queue Depleted Once More
In a notable development, the mempool, which stores unconfirmed Bitcoin transactions, is currently almost empty. This rare occurrence, which has happened only a few times in the last two years, suggests a low demand for Bitcoin transactions.
This low demand could be seen as evidence that Bitcoin is rarely used as a payment method. As the number of unconfirmed transactions dwindles, the focus shifts towards transaction fees, which are becoming increasingly important as the miner subsidy from the block reward decreases.
Yesterday, transaction fees for miners fell to a one-year low of around $261,000. This decline in fees, combined with the decreasing miner subsidy, poses a challenge for mining communities, particularly those with less efficient hardware and higher operational costs. These communities are at a higher risk of shutdown, which could potentially endanger the network's security.
The potential shutdown of smaller mining groups increases the possibility for 51% attacks, especially from these marginal players, while major players like Bitdeer Technologies and MARA Holdings continue to increase Bitcoin production leveraging advanced mining hardware.
Despite the drop in transaction fees, the price increase expected by the end of 2024 is currently making up for the loss of income for miners. However, it's worth noting that the total daily income of miners has not yet reached the level before the last halving.
Interestingly, the "Security Budget", from which miners draw to secure the network, is also decreasing. This is due to the lower number of unconfirmed transactions and the corresponding decrease in fees.
In the current Bitcoin market phase, transaction fees have dropped to a minimum, with a fee of 1-2 Satoshi per virtual byte being sufficient for quick confirmation. This low fee environment could indicate a more efficient Bitcoin network, but it also raises questions about the long-term sustainability of the mining industry.
As the Bitcoin network continues to evolve, it's crucial to monitor these trends and their potential impact on the network's security and decentralisation.
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