Things are getting a bit more difficult
After a month where transaction fees vehemently shot up to a near $60 per transaction, transaction fee levels have cooled back down as difficulty has also taken a concomitant drop to around 20 T. Needless to say but this cooldown period, or whatever way you want to call it, has been a great way to finally send out those transactions you were waiting to send or to finally see those stuck mempool transactions finally see it’s first confirmation on the network.
A few instances in the past week enabled one to pay fees as low as 5 sat/vB to confirm a transaction unlike the levels we saw last month where a 200 sat/vB was the norm. But at the time of this writing, or by the time this writing is published, low fees will only be ephemeral as difficulty is estimated to increase by 20% in the next difficulty adjustment. This will push the level of difficulty up to records highs of over 23T. But what is really difficult as mining rigs and ASIC chips continue to push the bleeding edge of technological innovation. And hold on tight because next difficulty is expected to push up (+20.69%) to 30.23 T. One could even say Difficulty is going to the moon!
In recent miner news, a North American mining company called Marathon Digital Holdings claims that it has successfully mined its first “clean” block. The word “clean” here has many connotations and can in fact me conflated with “zero privacy”. But essentially what they refer to “clean” is a block that is fully compliant U.S. regulations, including anti-money laundering (AML) and Office of Foreign Assets Control (OFAC’s) standards. This means that they can reject certain transactions that are deemed “dirty” in the eyes of these regulators. Amongst many in the bitcoin community, this practice has been called out as being not only “dirty” as well, but just plain disgusting. For an entity, especially a mining entity, to reject and censor certain transactions from being mined into a block is unequivocally against the truism of bitcoin. Many bitcoin analyst and diehard bitcoiners have even suggested nodes to just reject this mined block of Marathon as a way to refuse its acceptance into the network.
To continue on the topic of more attacks on the mining community, we regretfully came across the announcement by the government of New York State with the intention of placing a temporary prohibition on crypto mining until they have weighed its costs and benefits to the environment. This goes back to the whole environmental debate of bitcoin and merits the question again as to who has moral authority to choose what energy should be used for.
By the time this piece is published, we all have been victims of Elon’s bearish bitcoin tweet which sent the price of bitcoin down over 10%. See below to see what he said that made even the more diehard bitcoin energy defenders fume into rage.
The natural argument is that mining naturally chases the most efficient and cleanest energy. Considering how much miners are making per transaction (see below), it would be normal for one to think this.
At the moment, miners are earning over $200 USD per transaction mined and that should be expected to increase if price continues upward. Eventually the environmental debate will fade away as people realize how much other activities in the world use in energy, i.e., fiat printing.
Nic Carter, who has been one of the biggest defenders of Bitcoin’s energy uses, suggests people to DO YOUR HOMEWORK before claiming Bitcoin uses too much energy! Below are the topics he suggests one needs to be educated on:
- carbon intensity / energy mix
- transmission loss
- Proof of Work
- curtailed/stranded energy
- settlement assurances
- deferred settlement
- energy vs electricity production
- payments v settlement
But for those in the space, we all know these critics and media attacks on Bitcoin come every year, if not every month. And what have we learned from it all, Bitcoin keeps getting stronger and stronger. As much as Elon was loved just a few months ago, the bitcoin community now hates him. It’s a love hate relationship. But the lesson learned, don’t attack Bitcoin.
About Valarhash
Chengdu-based Valarhash integrates mining machine sales, miner hosting, mining pool, and mine construction services. Led by CEO Fiona Lv, Valarhash aims to provide users with transparent and beneficial mining plans using advanced technology, with lower barriers of entry. Business operations cover hardware research and development, digital asset transactions and 1TMine hash power contract sharing. With a leading position in the hash power market, Valarhash integrates frontier resources with global vision, providing crypto compute service (CCS) and linking physical and digital worlds with blockchain technology.
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