Bitcoin crosses an unusual phase: empty mempool, minimum costs and low on-chain activity. If this trend extends, the viability of the network and the remuneration of minors could be put to the test. Should you see a danger or a simple passenger adjustment?
On-chain costs to zero and an empty mempool for the first time in several years
One of the main brakes on the adoption of Bitcoin is the limited space of its blocks, restricting the place available for transactions. Thus, users must pay for sometimes high costs to be confirmed quickly. In times of high demand, these costs can fly away, reaching several hundred dollars by transaction during congestion.
Several events can cause an increase in costs, including the FOMO (Fear of Missing Out), such as a group of people seeking to use a non -censurable network in an emergency situation. Recently, it was above all the ordinal and runes protocols that made the costs increase at record levels.
💡 To go further-what is the mempool of a blockchain?
However, the craze for the creation of Tokens on Bitcoin – the most decentralized blockchain in the world – has faded. This drop in interest has resulted in a gradual decrease in transaction costs in recent months, until reaching the minimum of 1 SAT/VB this weekend.
Extract from the Bitcoin blockchain when the mempool was completely emptied
In 2023 and 2024, Ordinal and Runes protocols have attracted many users ready to spend significant sums to speculate on these new assets. Others, on the other hand, carried out low -cost transactions, sometimes confirmed several months later.
Lately, on-chain activity has dropped to such a low level that the set of The Mempool, bringing together transactions awaiting confirmation, emptied. Some minors even found themselves short of transactions to fill their blocks.
In the image above, some blocks display average costs of 0 SAT/VB. This is indeed an average: no transaction less than 1 SAT/VB has been published, due to the anti-spam limit imposed by nodes.
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Is an empty mempool a danger for Bitcoin?
The emptying of Mempool is explained by an obvious lack of we-chain users, but also by the continuous increase in Hashrate. Indeed, this increase accelerates the validation of the blocks between each adjustment of the difficulty, thus reducing the average confirmation time below 10 minutes.
Since the creation of Bitcoin, its hash rate has continued to increasewith a few temporary exceptions, as during the “China Ban”, when many Chinese minors had to stop their activities and leave the country.
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If Bitcoin fails to maintain sufficiently high costs in the long term, Security problems could emerge once the issuance of new BTCs and the minors' reward will have ended. Without sufficient income, some mining farms could reduce or stop their activity to limit their losses.
If this situation persisted, She could lead to the bankruptcy of several minors, causing a drop in the overall hashrate. This could also promote the largest mining structures, thus threatening the decentralization of blockchain.
However, several solutions should make it possible to avoid this extreme scenario. The development of second -laying protocols and the increase in the adoption of the BTC could compensate for this drop in profitability. In addition, a reduction in the size of the blocks could be enough to maintain higher costs in the long term.
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Source: mempool.space
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Investments in cryptocurrencies are risky. There is no guaranteed high yield, a product with high performance potential implies a high risk. This risk taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital
First attracted by the bait of gain, I am now trapped Deep the Rabbit Hole. Without a way out, I just have to share my knowledge and transmit the passion I have for Bitcoin. I am also the creator of Adopt A Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
402 articles
