Although the number of transactions and charges on the BTC blockchain network is decreasing, mining Bitcoin has grown more complex than before. As per blockchain analytics service, Glassnode, Bitcoin’s increasing hash power is in contrast with the cryptocurrency’s bearish market-level trading volumes.
No Increase In BTC Users
The firm’s weekly on-chain report looked into investors’ behavior in the wake of Bitcoin’s most recent price decline. Following a short break over its $45,000 barrier last month, the crypto has subsequently retreated into a consolidation zone at $40,000.
From Glassnode’s analysis, on-chain buying behavior revealed that certain investors were taking profits during the upsurge, which must have caused the digital currency to drop.
“We have not yet seen a significant increase in new demands or users,” the study stated. Specific to Bitcoin, there is presently no indication of significant recovery or growth in the cryptocurrency’s user base, with a daily number of active users remaining inside the support level of a six-year bearish market channel.
Likewise, the number of transactions is minimal, with an average daily volume of around 225,000 transactions. While it is greater than it was in July last year, it is still a long cry from the levels that were prevalent during the bull market’s surge. As a result, trading charges have been hitting all-time lows from late May, showing a lack of rivalry among BTC dealers for blocks space in the cryptocurrency.
Mining Of BTC Theoretically Less Profitable
Mining Bitcoin would theoretically become less profitable since miners are bound to earn less as each block has reduced in profitability. Although this seems to be the case, the level of competitiveness in the business seems to be increasing, with mining difficulty hitting its all-time high.
Each BTC block now takes around 122.78 Zettahashes in order to be successfully solved. As Glassnode explains, “this is equal to all 7.938 billion individuals on Earth individually predicting a SHA256 code 15.51 trillion times which would take around 10 minutes for each block.
Miners of BTC make use of supercomputer processing speed to solve each block, and they benefit from it by getting freshly minted BTC and/or transaction fees. Currently, the 6.25-block incentive makes up the overwhelming bulk of miners’ payouts, which may clarify why the weak on-chain activities haven’t had a negative impact on the mining industry.
Presently, the price of Bitcoin has dropped from $45,000 and is trading at $40,013 at the time of this point. This drop has dashed the hopes of crypto supporters who predicted the crypto to reach the $50,000 mark.