The third Bitcoin halving has come to an end. On-chain data shows that the computing power of the entire Bitcoin network has dropped significantly in the short term; in the medium and long term, the upcoming flood season will be a subsequent positive. At 10 a.m. on May 20, Bitcoin experienced its first difficulty adjustment after the halving. The difficulty dropped by 6%, which was the 16th largest downward adjustment in the history of Bitcoin mining. According to BTC.com data, as of 10:00 on May 24, the total Bitcoin network hashrate was about 91.87 EH/s, and the mining difficulty was 15.14 T. It is estimated that there are still 12 days and 9 hours before the adjustment, and the next mining difficulty will continue to decrease by 11.27% to 13.43 T. Ranking of the top 20 blockchains with the largest drop in difficulty, source: BTC.com, TokenInsight 2. After the halving, the total computing power of Bitcoin network has dropped significantly TokenInsight believes that the total network computing power cannot be directly observed at present, but it can be calculated from the average block time and difficulty change. According to the average block time analysis, the total network computing power of Bitcoin has experienced a significant decline after the halving. Average Bitcoin block time, Source: ByteTree, TokenInsight The average block time for the 1,000 blocks before the halving (about a week) was 560 seconds, and the average block time for the 1,000 blocks after the halving was 689 seconds, an increase of about 20% year-on-year, indicating that the computing power of the entire network has dropped by about 20% during this period. Average block time for every 200 blocks, Source: ByteTree, TokenInsight Since the difficulty adjustment, the average block time so far is about 706 seconds. This shows that the Bitcoin network is still balancing itself and clearing out inefficient miners. 3. After the halving, transaction fees increased significantly, and the proportion of transaction fees increased from 4% to 15%. Data shows that the number of on-chain transactions was relatively stable in the 2,000 blocks before and after the Bitcoin halving; at the same time, the average transaction fee after the halving increased slightly compared to before the halving. Number of Bitcoin on-chain transactions, Source: ByteTree, TokenInsight Average transaction fee per 50 transactions, Source: ByteTree, TokenInsight As shown in the figure below, after the halving, miners' mining income decreased, but transaction fee income increased by 200% at the moment of halving. With the stable operation of the Bitcoin network after the halving, the average transaction fee share of miners increased from 4% before the halving to about 15%. The proportion of transaction fees in miners’ total income, Source: ByteTree, TokenInsight Overall, after the halving, the total transaction fee of Bitcoin has fluctuated and increased as TokenInsight expected. The increase in fees shows that investors are willing to pay a premium for transactions that are prioritized. However, if Bitcoin is to develop healthily according to Satoshi Nakamoto's vision, that is, the main income of miners will shift from block rewards to transaction fees, there is still a long way to go. 4. In the short term, the total network computing power may further decline, and the flood season will become a subsequent positive Affected by costs, old mining operations with low efficiency will be shut down in a wave of continuous operations. Therefore, the computing power of the entire network is expected to decline further in the short term. On the other hand, domestic miners have made sufficient preparations for the flood season. In the coming months, the cheap electricity prices during the flood season will show their advantages, and a large number of domestic miners will move from all over the country to Sichuan. On May 18, the Sichuan Provincial Department of Economy and Information Technology issued the "Notice of the Sichuan Provincial Department of Economy and Information Technology on Effectively Strengthening Power Dispatching and Operation Arrangements to Ensure Stable Power Supply in the Province". The content of the "Notice" mentioned: Since May, the power load in Sichuan Province has increased significantly. At the same time, the water inflow in various river basins in the province has been about 20% less than the same period last year, and the hydropower generation capacity has been greatly reduced. The State Grid Sichuan Electric Power Company should optimize power dispatching, ensure power supply, and strengthen joint dispatching of reservoirs in combination with the water conditions and load forecasts of various river basins. Therefore, at present, the flood season that domestic miners are eagerly waiting for will be postponed. However, TokenInsight predicts that with the official arrival of the subsequent flood season and the delivery of a new batch of high-performance mining machines such as Antminer S19, the computing power of the entire network may pick up.
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