Bitcoin Mining
The Most Expensive Bitcoin Transaction Ever — Bitcoin Mining Landscape Overview
Data, trends, and insights in the Bitcoin mining industry
Key takeaways:
- Paxos overpays transaction fees by 479867x.
- Centralization getting worse? Foundry mines over 30% of all Bitcoin.
- Used ASIC miners trading at a discount.
Paxos Pays the Most Expensive Transaction Fee in History
Paxos recently made headlines for a significant error that led to an overpayment of $510,750 in a Bitcoin transaction fee.
Initially thought to be a “fat-fingered” mistake from PayPal, the global payment company confirmed that it was a bug in a transaction from its infrastructure partner Paxos, as reported by Mempool’s developer Mononautical.
This incident marks the largest fee ever paid for a Bitcoin transaction in dollar terms.
The investigation into this substantial overpayment revealed some surprising details. The overpaid fee originated from a hot wallet and was sent to an address that started operating in June of the same year. This address displayed automated processing of fiat-denominated withdrawals. Such a high fee for a small transaction is highly unusual in the Bitcoin network, where fees are typically determined by market demand and network congestion.
The transition between the old and new wallets was observed on-chain through an intermediate address, strengthening the theory of a software bug being the cause.
Foundry Mines Almost One Third of All Bitcoin Blocks
The landscape of Bitcoin mining pools continues to evolve, with a clear trend towards consolidation among the top players.
The top Bitcoin mining pools are growing larger and capturing a significant proportion of the total hash rate. As of the latest data, here are the top Bitcoin mining pools by their share of the network’s hash rate:
- Foundry USA: 31.38% with 123.64 EH/s
- AntPool: 23.17% with 91.29 EH/s
- F2Pool: 13.20% with 52.00 EH/s
- ViaBTC: 9.97% with 39.29 EH/s
- Binance Pool: 7.14% with 28.12 EH/s
These top five mining pools collectively control a significant portion of the Bitcoin network’s computational power.
Foundry USA’s prominent position at the top of the Bitcoin mining pool hierarchy is particularly noteworthy, mining 321 of the total 1,023 blocks found last week.
While Bitcoin’s fundamental principle is decentralization, the reality of mining pool centralization highlights the need for ongoing discussions within the community.
It’s important to monitor the balance between mining centralization and network security to ensure the continued integrity of the Bitcoin network. As mining pools grow larger, their influence over the network’s operations also increases, making it crucial to maintain a healthy level of decentralization in the long term.
Looking for an ASIC? Buy a Used One
In August 2023, the cryptocurrency mining industry saw a growing price disparity between new and used ASIC miners, with the latter becoming significantly more affordable.
According to Luxor, a typical used S19j Pro miner was being sold at a 44.8% discount compared to its new counterpart.
This price discrepancy can be attributed to several factors, including the release of more advanced and powerful mining rigs, shifting economics in the mining sector, and an abundance of available used machines.
During this period, the demand for new mining machines remained robust, primarily on the buy-side. New S19 models were particularly sought after, with a buy-side demand reaching 12,264 units, whereas used S19 models garnered demand for 3,287 rigs.
Additionally, the demand for Whatsminer models reached 7,068 units, with a preference for new M50 models. Interestingly, the demand for new M30S series models was relatively low, with most market interest favoring used rigs.
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