Post Bitcoin Halving News: Increased Fees, Disgruntled Miners, and More
The most recent Bitcoin halving event took place on April 19th, 2024, just one day before it was predicted. Since then, some interesting things have happened in the Bitcoin world.
Curious to know what the Bitcoin halving affected? Read on as we discuss the event and the changes that have occurred in the time since.
Bitcoin Fees Go Wild
During the Bitcoin halving event, the cost to produce a single Bitcoin skyrocketed, due to high energy consumption costs and increased demand for transactions. As a result, Bitcoin fees, which are collected to pay miners for their work, also skyrocketed.
Before the halving, the average cost per transaction was just around $10. Directly following the halving, the cost spiked to an insane $128. It remained there for a few hours before dropping down to the current rate of about $34.
While it is likely that the fee will drop a bit more, it is just as likely that about $20 will be the new average transaction fee. Because of the halving, the reward miners receive from mining blocks is decreased, so they will be charging higher fees to process transactions going forward. While we don’t think the fees will continue to spike to upwards of $100, we do expect them to be higher than they were pre-halving event.
Of course, we can’t say for sure, as Bitcoin fees are both dependent on the miners as well as supply and demand. Because demand is high right now, so too are the prices. It is also worth noting that many Bitcoin miners planned to exit the market following the halving and that might be why the prices spiked so quickly.
Related: The Upcoming Bitcoin Halving Event
Why Did Bitcoin Miners Leave?
There was much controversy surrounding the most recent halving event as several miners stated that they would be exiting the market. While that may seem a bit dramatic, it’s important to know that Bitcoin mining consumes a lot of electricity, and many miners in locations where electricity is expensive found that the newly reduced mining rewards were just not enough to keep them afloat. As a result, they may have quit mining during the last few days.
That being said, we think the miners who quit entirely are few and far between, rather, we think that some of them may be offline just because they are working to move to a new location where electricity is more affordable. Currently, the countries with the most affordable electricity are The Sudan, Ethiopia, and Iran—which are unfortunately not the safest countries. Instead, we expect miners to take up residency in countries like Argentina, Laos, and Sri Lanka, which are slightly safer and still offer inexpensive electricity.
As there are fewer miners, there is more pressure for others to complete transactions, which is one of the main reasons fee prices spiked.
Miners Look to AI for Answers
Ever since the beginning of 2024, the discussion of AI has been everywhere. It’s been connected with investing, writing, and art. Now, it might even be attached to Bitcoin.
How, you ask? Well, the current cost of mining post-halving is about $53,000 per coin—and for some miners who can’t move locations, that would have them mining Bitcoin at a loss. But many of these locations already have lots of large-scale computing devices—which miners can use to develop AI rather than mine Bitcoin.
Is This a Good Thing?
Unfortunately, no. AI is already taking over jobs, replacing humans, and disrupting art, and the last thing we want it to do is gain more traction. But unfortunately, it looks like that is the way things are going to go anyway.
Although we are more than happy to stand behind the concept of Bitcoin, standing behind AI doesn’t have the same draw. We can only hope that some of the more understanding miners see it this way, but sadly, most of the individuals mining Bitcoin are actually corporations that only care about dollar signs and not the human experience.
What Can You Do?
Like many other issues covered on our blog, there isn’t much that can be done when it comes to supporting Bitcoin and not supporting AI. Just remember that you vote with your money, so taking the time to put money into Bitcoin and not a company using AI can go a long way.
In addition to not supporting companies who use AI, accepting that higher fees are part of the growth of Bitcoin is also important. While we, just like anyone else, hate high fees, we would rather pay a little more to keep miners in the game than pay for them to develop AI.
Related: The Best Cryptocurrencies to Buy in 2024
Should You Buy Bitcoin Now?
Prior to the halving event, many individuals were rushing to buy Bitcoin with the assumption that it would rise in price during the event—which was the case. If you didn’t buy Bitcoin before the event, however, it is still a good time to buy.
This most recent halving event on April 19th was far from the final halving event, and we truly believe that we haven’t seen the full potential of Bitcoin just yet. So, in our eyes, there is never a bad time to buy Bitcoin especially if you plan to hold onto it for the long term.
But, of course, we are not official investing advice, so definitely check with someone you trust before you buy.
Overall, the Bitcoin halving event is causing waves in the cryptocurrency world—not all of which are good. Even though prices are higher, and miners are leaving, we still love Bitcoin and will continue to support the platform—especially if the alternative means supporting AI. If you, too, would like to support Bitcoin, know that it is always a good time to invest, even if the halving event has just ended!
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