The Bitcoin network is currently dealing with congestion issues. The excessive pile-up comes from an estimated 332,000 pending transactions as of 12:05 PM Eastern Time on June 7. This has resulted in a substantial surge in transaction fees, reaching around $50 to $52 per transaction for both high and low priority transactions. There’s a potential link between the overcrowding and centralized exchange OKX’s ongoing efforts to sort through wallets, but this remains unconfirmed.
These congestion woes raise pressing concerns about Bitcoin miners’ profitability and miner difficulty – issues that have gained significance post-halving. Halving, a significant occurrence in Bitcoin economics, involves halving the reward received by miners for new blocks added to the network, which, in turn, affects mining profits. As an example, Bitfarms, a BTC mining company, reported a staggering 42% plunge in revenues in May, the first full month post the latest halving event.
Furthermore, climate conditions are adding insult to injury. Bitfarms highlighted that its Rio Cuarto facility in Argentina had to stop operations for eight days due to the harshest weather conditions experienced in the past 44 years, leading to fewer Bitcoins mined.
Despite these hurdles, a staggering $2.7 billion has been expended on electricity for Bitcoin mining since the beginning of 2024 in the U.S. alone. The electricity used in Bitcoin mining since 2024 could power 1.5% of U.S. households for an entire year, emphasizes analyst Paul Hoffman. Post the Bitcoin halving, mining a single Bitcoin now roughly amounts to an average of $110,000, more than double the cost before the halving.