NFTs
Assessing the Bitcoin Network – Its Future as NFTs, Miners Face Challenges
- Interest in Bitcoin NFTs has declined significantly in recent days.
- Miner revenue fell and hashrates declined.
Bitcoin [BTC] has witnessed a huge increase in price over the past few days, pushing it past the $65,000 mark. However, the same growth was not observed 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, the sales volume of Bitcoin NFTs fell by 17% in the last 24 hours.
Popular Bitcoin NFT collections such as BONE and JIGO have witnessed a massive decline in minimum value and volume over the past few days.
Source: Crypto Slam
This decreasing interest in NFTs could harm the growth potential of the Bitcoin network and also affect overall activity.
The number of daily active addresses also dropped significantly, showing that interest in the Bitcoin ecosystem was waning at press time.
Source: Santíment
How are the miners?
A decline in activity on the Bitcoin network could also impact mining revenue. When there is a decline in activity on the Bitcoin network, fewer transactions occur. This translates into lower transaction fees.
Since miners earn transaction fees for including transactions in blocks, a decline in activity translates into lower overall transaction fees charged by miners.
In recent days, revenue generated by mining companies has fallen from US$107 million to US$30 million so far.
Source: Blockchain.com
BTC hashrate has also dropped in recent days, which could create difficulties for miners.
While it may seem beneficial that solving blocks becomes easier with a lower hashrate, the network’s automatic difficulty adjustment reduces the block reward each miner receives when there are fewer competitors.
This puts more pressure on transaction fees as a source of income for miners.
However, the reason hashrate may be falling, a decline in network activity, often means there are also fewer transactions and lower transaction fees.
To read Bitcoins [BTC] Price prediction 2024-25
This creates a big problem for miners as they receive a smaller share of the fixed block rewards and have fewer opportunities to earn from transaction fees.
These factors may increase selling pressure on miners as they will be driven to sell their holdings to remain profitable.
Source: Blockchain.com