Nfts
Bitcoin Network Rating – Its Future as an NFT, Miners Face Challenges
- Interest in Bitcoin NFTs has declined significantly over the past few days.
- Miner revenues fell and hashrates declined.
Bitcoin [BTC] has seen a massive price rise over the past few days, pushing it past the $65,000 mark. However, the same growth has not been seen on the Bitcoin network.
Taking a look at the NFT space
According to recent data from CryptoSlam, interest in the NFT sector was slowly declining. Notably, Bitcoin NFT sales volume dropped by 17% in the last 24 hours.
Popular Bitcoin NFT collections such as BONE and JIGO have seen a massive drop in floor value and volume over the past few days.
Source: Crypto Slam
This decline in interest in NFTs may harm the growth potential of the Bitcoin network and may also impact overall business.
The number of daily active addresses also decreased significantly, showing that interest in the Bitcoin ecosystem was waning at press time.
Source: Santiment
How are the miners doing?
A drop in activity on the Bitcoin network can also impact miners’ income. When there is a drop in activity on the Bitcoin network, there are fewer transactions. This results in lower transaction fees.
Since miners earn transaction fees for including transactions in blocks, a drop in activity translates into a drop in the overall transaction fees received by miners.
Over the past few days, revenue generated by miners has fallen from $107 million to $30 million at press time.
Source: Blockchain.com
The BTC hashrate has also declined in recent days, which may create difficulties for miners.
Although it seems beneficial that solving blocks becomes easier with a lower hashrate, automatically adjusting the network difficulty reduces the block reward each miner receives when there are fewer competitors.
This puts increased pressure on transaction fees as a source of revenue for miners.
However, the very reason for the hashrate decline, namely a drop in network activity, often also means that there are fewer transactions and lower transaction fees.
Read Bitcoin [BTC] Price prediction 2024-25
This creates a major problem for miners, as they receive a smaller share of fixed block rewards and have fewer opportunities to earn transaction fees.
These factors may increase selling pressure on mining companies, as they will be required to sell their stakes to remain profitable.
Source: Blockchain.com