The Bitcoin Network’s Post-Halving Hash Rate Under the Microscope

— May 14th, 2020 by TokenInsight Research

Author: Johnson Xu, Fanger Chou

Email: johnson@tokeninsight.com

Overview

The cryptocurrency industry has just experienced the most anticipated event, Bitcoin (BTC) 2020 halving. The last 12.5 Bitcoin block has been mined by F2Pool and encoded the message of “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue.” paying tribute to Satoshi Nakamoto. Antpool was in luck and mined the first 6.25 Bitcoin block.

The Bitcoin 1st halving happened in Nov 2012, mined by Slushpool, and the 2nd halving happened in July 2016, mined by F2Pool. For Bitcoin, we have now officially entered the 6.25 block subsidy era, and the 4th Bitcoin halving started to count down.

Bitcoin Network Hash Rate Experienced Some Decline, the First Difficulty Adjustment Post-Halving Will See a Negative Adjustment

The market experienced some volatility during the last 60 blocks leading up to the halving, however, the Bitcoin price stayed within the $8,500–$9,000 range for a 24-hour window during the event.

Bitcoin Price by Block Height, Source: ByteTree, TokenInsight

The average block production time was roughly 7.5–8.5 mins per block 24 hours prior to the halving, and we see some increase in block time post-halving, with an average of 11 minutes per block in 12 hours following the halving. With the available sample, we can safely conclude that the network has experienced a hash rate decline post-halving, as indicated by longer block production times than the pre-halving average.

*Average Block Time, Source:* *ByteTree*, *TokenInsight*

According to the Bitcoin difficulty estimator, immediately post halving the network pace was roughly 52 blocks ahead of schedule. This may be due to miners pushing block production faster in the 24 hours leading up to the halving. With the current estimate, the next difficulty change will happen in roughly a few days, with a negative adjustment. However, the block production time could shift significantly within the period as miners try to adjust their operations.

Slight uptick of transaction fees to subsidize miners’ revenue around the 2020 halving

The number of transactions were consistently showing an upward trend in the 24 hours leading up to the halving, with an average of 1,959 transactions contained per block.

No. of Transactions by Block Height, Source: ByteTree, TokenInsight

Total transaction fees roughly doubled around the halving from a fraction of a Bitcoin to more than one Bitcoin, and eventually dropped back to the pre-halving level.

Total Transaction Fees by Block Height, Source: ByteTree, TokenInsight

The network has seen a slight uptick of average fees per transaction during the last 50 blocks, and in the first 20 blocks after the halving, the average fees have been decreasing and stayed relatively stable.

Transaction Fees (Mean) by Block Height, Source: ByteTree, TokenInsight

Prior to the halving, miners’ revenue from fees only accounted for a single digit of the total revenue that they will receive. There was an immediate jump in miner revenue from fees post-halving due to the reward being cut in half. Twelve hours into the 6.25 block subsidy era saw miners’ revenue from fees dropping to a lower level, but they stayed about 10% per block on average.

Miner Revenue from Fees by Block Height: ByteTree, TokenInsight

It is also worth noting that Slushpool mined the 630,001st block, which contains almost 18% transactions fees, which is roughly 1.369 BTC in fees. It is one of a few blocks with the highest miners’ revenue from fees so far since the halving.

Happy 2020 Bitcoin halving! Now counting down to 2024

Bitcoin was born during a time when banks and the traditional finance industry faced turmoil. Yet, more than 11 years later, the industry is working together to bring the Bitcoin and cryptocurrency industry to the world stage.

The encoded coinbase parameter for block 629,999, “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue” echoes Satoshi Nakamoto’s encoded message for block 0, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This reminds us why Bitcoin was created: To provide a more trustworthy monetary system.

We look forward to witnessing future Bitcoin halvings with the whole world. This is just the beginning.

About TokenInsight

Founded in 2017, TokenInsight is a Leading Data & Tech Driven Blockchain Financial Institution. TokenInsight pioneered a complete blockchain industry classification system, covering more than 1,600 projects, releasing more than 300 rating reports, and conducting in-depth studies into 10 major industries.

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