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This year, Bitcoin ordinals and inscriptions have had a notable effect on block space usage, enhancing miner earnings through elevated transaction fees. Nevertheless, miners are confronted with challenges as the upcoming halving event approaches.
Since their launch in February 2023, inscriptions have been actively engaged in the cryptocurrency landscape, occupying block space and filling the mempool. They have mainly utilized the leftover space following higher-value monetary transactions.
Although they contribute to transaction fees, analytics firm Glassnode noted that the volume of pending transactions in its mempool has significantly risen since May. The majority of these unconfirmed transactions have a small data footprint. Inscriptions are influenced by absolute fee levels and can be pushed aside by more urgent monetary transfers.
Glassnode highlighted that the increase in text-based inscriptions corresponds with the growth in pending transactions, confirming that these compact inscriptions have emerged as a key factor driving demand for block space.
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However, the outlook for miners is not entirely positive. Despite the heightened fees generated by these inscriptions, their overall earnings remain relatively low. The hash price, expressed in dollars per terahash per second per day, has reached an unprecedented low, currently at just $0.059, as reported by the Hashrate Index. This represents a 50% decline from the Bitcoin ordinals spike in May and an 85% drop from the peak of the bull market at $0.40.
Miners are now projected to earn only 2.26 BTC per Exahash active on the network, placing them under financial pressure and potential unprofitability unless BTC prices see a substantial increase. The halving event anticipated for April or May of the next year will further decrease their block rewards to 3.125 BTC.
Glassnode emphasized the intense competition within the mining sector, noting that the continuous fall in hash prices illustrates its ruthless and unforgiving nature.
In summary, while inscriptions have created additional demand for block space, the impending halving event and fierce miner competition introduce uncertainty regarding miners’ profitability. Their future will largely hinge on the trajectory of BTC prices, which are currently at $26,236 during the Wednesday morning Asian trading session.
The post Bitcoin Ordinals and Inscriptions Impact on Miner Revenue as Halving Nears appeared first on BitcoinWorld.
