Journalist
Posted:
- The number of Bitcoin transactions has increased dramatically over the past week.
- The increasing traffic jams encouraged users to bid more and jump in line.
Amid gloom in the broader market, Bitcoin [BTC] miners had something to cheer about. According to a September 7 update from on-chain analytics company Glassnode, the portion of miners’ revenue coming from transaction fees hit a new monthly high of 2.842%.
#Bitcoin $BTC Percentage of miner revenue from fees (7d MA) just hit 1-month high of 2.842%
The previous one-month high of 2.837% was observed on August 11, 2023
View statistics:https://t.co/NphJIZNcsL pic.twitter.com/AgerAmf5ar
— Glassnode Alerts (@glassnodealerts) September 7, 2023
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As is well known, miners earn their income from two sources: a fixed number of newly minted BTC coins for each block mined, and the fees users pay to have their transactions included in the block.
It is clear that there is a direct correlation between miner revenue and Bitcoin network traffic.
According to Glassnode, the number of transactions has increased dramatically over the past week, which explains the spike in miner earnings. On September 3, there was even a value of 625,009, the highest in more than a month.
Source: Glassnode
Increasing network congestion?
Another factor that could explain the increase in transaction costs was the dynamics around hash rate and block intervals. As shown below, the network’s hash rate has dropped since the start of the week.
A decrease in the hash rate effectively meant that miners’ efficiency in finding the accurate block decreased, leading to high block intervals.
Source: Glassnode
The delay in the mining blocks caused the network to become overloaded. According to data from Mempool, the number of unconfirmed transactions in the queue has risen to 560,810 at the time of writing, prompting users to bid more in order to jump the queue.
Different levels were established when prioritizing transactions. Users willing to spend $0.9 were given top priority.
Source: Mempool
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What next with Bitcoin mining?
High fees were a good sign for the existing breed of miners, as well as those who wanted to explore it as a viable business model. As the Bitcoin blockchain expands, a continuous influx of miners would be required to keep the network secure and decentralized.
Bitcoin miners fought the severe bear market of 2022 with tenacity, aiming to recoup their losses in 2023. However, after reaching annual peaks in May, overall revenues have dried up significantly.
Source: Sentiment