Huge transaction fees level in Bitcoin Network and next Difficulty Change
Updated: Apr 21
Since April 13, an interesting situation has developed around transaction fees on the bitcoin network.
If on April 13 the average transaction fee was $ 19, then by April 20 this value had tripled to the level of $ 60 per transaction.
Since April 15, the Bitcoin network hashrate has dropped more than 49% after touching an all-time high at 218 exahash per second. Regional reports noted that in China the Xinjiang grid is having blackouts and “safety inspections.”
“The hashrate of bitcoin mining pools plummeted in 24 hours. Antpool fell by 24.5%, Btc.com fell by 18.9%, Poolin fell by 33%, Binance pool fell by 20%,” Wu tweeted.
The reason is that Northwest China is undergoing a complete blackout for safety inspections.
Xinjiang and Sichuan combined together have well over 50% of the overall Bitcoin hashrate.
What does this mean for cloud mining?
This means that in addition to the block reward, which is now 6.25 bitcoins, miners have also begun to receive high income from transaction fees. This can be seen from the f2pool payments, statistics on which I collect every day to analyze the BitFuFu cloud mining service.
Thus, if on April 10-12, the reward for mining 1 TH/s per day averaged 590 Satoshi, now we have reached the value of 700 Satoshi for 1 TH/s, which is 20% more.
Of course, such payments for 1 TH/s, given the current difficulty, cannot last long, and after such an increase, fees will return to their previous level.
But what kind of network difficulty awaits us in the future?
Next Bitcoin Difficulty Change
Recently, the difficulty of the bitcoin network has grown by an average of 1-2% over a period that averages 13.5 days.
The last change to the network difficulty took place on April 15th. Then the difficulty increased by + 1.92%.
A period earlier, on April 2, the difficulty of the network increased by 5.82%.
Let's take a look at what f2pool payouts were these days at a moderate level of transaction fees.
Red 02-15 April (-5.82%), Green - Transaction fee grows to 60 USD. f2Pool 2.5% fee included
Despite the increasing difficulty of the network, high fees offset the decreasing payments for 1 TH/s of hashpower. But now, 5 days after the last change in the network difficulty, we can see the following forecast:
Thus, the difficulty of mining is planning to fall sharply on the next correction. What payments will we receive with this level of network difficulty?
Let's consider a scenario where the network difficulty becomes 20,600,000,000,000. Then we return to the mining values from January 9th, when the network difficulty was similar.
This was the period when I just returned to mining and already started collecting statistics from the pools. Then the f2pool without deduction of 2.5% of the fee paid the following values:
2.5% f2pool fees are not included here, but as you can see, the payout rate is very impressive.
At the moment, buying contracts is very profitable.
Even if the level of transaction fees returns to standard values, we will soon expect a strong decrease in network difficulty and an increase in payments for each TH/s of mining power.
I don't know how the situation will unfold after May 1-4, but buying mining for a short time is now very profitable.