The Bitcoin network is currently facing a surge in transaction fees, reaching as high as $52 per transaction due to significant congestion and a backlog of unconfirmed transactions.
Fee Spike and Network Congestion
As of June 7, the Bitcoin network recorded 332,000 unconfirmed transactions at 12:05 pm Eastern Time, causing a sharp increase in transaction fees. High-priority transactions required 514 satoshis per byte, while low-priority transactions needed 513 satoshis per byte, translating to $50–$52 per transaction in U.S. dollars. Although priority fees have since decreased to approximately $46 per transaction, the congestion continues to affect the network.
Blockchain reporter Colin Wu suggested that the congestion might be linked to centralized exchange OKX sorting through wallets, though this has not been confirmed.
Post-Halving Challenges for Bitcoin Miners
The recent Bitcoin halving, which occurred at the end of April, has intensified concerns about miner profitability, network fees, and mining difficulty. The block reward reduction from 6.25 BTC to 3.125 BTC has significantly impacted miner revenues.
For instance, Bitfarms reported a 42% drop in mining revenue for May, the first full month post-halving. The company earned 156 BTC in May compared to 269 BTC in April. Additionally, Bitfarms faced operational challenges, with its Argentina facility experiencing the worst weather conditions in 44 years, leading to an eight-day shutdown and further reducing the total number of Bitcoins mined.
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Increased Mining Costs and Energy Consumption
Since the beginning of 2024, U.S. Bitcoin miners have spent a staggering $2.7 billion on electricity, grappling with rising computing difficulty and lower rewards. Analyst Paul Hoffman highlighted that Bitcoin mining in the U.S. consumed 20,822.62 GWh of electric power, enough to power 1.5% of U.S. households for a year.
In April, the cost to mine a single Bitcoin averaged $52,000. Post-halving, this cost has more than doubled, now averaging $110,000 per Bitcoin, reflecting the increased difficulty and reduced block rewards.
