The Bitcoin network is currently experiencing a sharp increase in network fees driven by 332,000 unconfirmed transactions as of 12:05 pm, Eastern Time on June 7.
Network fees at the time hit 514 sats for high-priority transactions and 513 sats for low-priority transactions, with prices climbing to around 520 sats per transaction earlier in the day. In U.S. dollar terms, this represents $50 to $52 in fees per transaction. Priority fees have since dropped to around $46 per transaction.
According to blockchain reporter Colin Wu, the 332,000 unconfirmed transactions are suspected to be the result of centralized exchange OKX collecting and sorting through wallets, though this wasn’t confirmed by the time of publication.
A snapshot of the high network fees on Friday morning. Source: Bitcoin Mempool block explorer.
Post-halving economics and the challenge to Bitcoin miners
Concerns surrounding miner difficulty, high network fees, and miner profitability on the Bitcoin network have come into sharper focus post-halving.
The slashing of the block reward from 6.25 Bitcoin (BTC) to 3.125 BTC at the end of April has significantly impacted miner profits.
Bitfarms reported a 42% drop in mining revenue for the month of May—the first full month since the latest halving event. The Bitcoin mining company disclosed in its end-of-month report that 156 BTC were earned in the month of May compared to 269 in April.
The Bitcoin miner also explained that temperatures in its Argentina facility were unusually low in May—recording some of the worst weather conditions in 44 years. These poor weather conditions caused the company’s Rio Cuarto facility to shut down for eight days, contributing to a drop in the total number of Bitcoin mined.
Related: Can Bitcoin close above $70K amid strong labor market?
Since the start of 2024, Bitcoin miners in the United States have spent a total of $2.7 billion on electricity, despite rising computing difficulty and lower rewards.
According to analyst Paul Hoffman, “Since the start of 2024, Bitcoin mining in the U.S. has consumed an enormous 20,822.62 GWh of electric power.” The analyst added that the…
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