Bitcoin miners have received a boost in profitability after the planned adjustment of mining difficulty led to a positive balance. This is the first time since February that the difficulty, which controls the output of coins in the network, has decreased. Current data from Braains shows that the computing power of Bitcoin experienced a decline of over 45+ EH/s between April 20 and 28. However, this trend has since been reversed with the increase in miner profits in the last week.
Despite the restoration of the hashrate to 350 EH/s, it was not enough to prevent a 1.45% retracement of the difficulty adjustment, as reported by Mempool.space. Currently, the mining difficulty rate stands at 48T (trillion). This change in difficulty level affects miner profitability, as less competition for the reward means a higher estimated income for those still connected to the network.
Bitcoin miners benefit when the hash price increases. The current price for Bitcoin hashpower rose to $0.088/TH/day ($88/PH/day), up from $0.077/TH/day ($77/PH/day) on May 2. This increase of 11.49% over three days is a positive development for Bitcoin miners, indicating increased profitability for their operations. The hash price is a crucial metric for calculating the profitability of a mining operation, representing the value assigned to a calculation unit in dollars per terahash or petahash per day. While the cause of the significant drop in hashrate last week is uncertain, the current state of the network justifies the quick reconnection of miners.
Recently, there has been a rise in interest in BRC-20 tokens, which are used to create memecoins, leading to network congestion on Bitcoin within days of their release. As reported earlier, this could be a possible factor for the decline in hashrate. Due to this high activity on the network, fees now make up 12.4% of miners’ revenue.
In the wake of the increased interest in tokens registered over ordinals on Bitcoin, the value of transaction fees paid by Bitcoin users has increased significantly. Within a single day, average transaction fees have more than doubled. According to data from Mempool, current transaction fees range from 70 sat/vB to 100 sat/vB. This means that a transaction of 140 vB (median) would require a payment of nearly $4 to be confirmed within the first few minutes.
Note that the sudden interest in tokens registered over ordinals is responsible for the backlog of transactions that need confirmation, leading to an increase in average fees. According to Murch, a Bitcoin developer, the Mempool depth reached 104 blocks, although it had been processing eight blocks per hour in the last six hours. The rise of ordinals NFTs has not been without controversy, as some Bitcoin maximalists blame this trend for the increased transaction fees that have emerged in recent months.
At the time of writing this article, Bitcoin is trading at around $29,000, up 2% in the last week.