Source: Forbes
BitcoinBTC 0.0% has successfully completed its fourth halving supply cut—coming as one legendary billionaire predicts “rapid, cataclysmic” U.S. collapse.
The bitcoin price has so far defied warnings that the bitcoin halving could trigger a “raging fire sale,” bouncing back from under $60,000 per bitcoin this week to around $65,000.
Now, bitcoin miners and traders are grappling with halving “chaos” which has pushed up bitcoin transaction fees to “unprecedented” levels.
“This year’s halving was much anticipated, as halvings usually are, but we had a bit of an incident that requires some further explanation,” bitcoin author and self-styled “bitcoin expert” Jimmy Song posted to X.
“The block subsidy decreased from 6.25 bitcoin to 3.125 bitcoin on block 840,000 as expected, but what wasn’t expected was the 37.626 bitcoin in fees that came along with it. To give some context, that’s easily the highest ratio of fees to block subsidy that bitcoin has ever had. One transaction paid nearly 8 bitcoin in fees by itself”—worth a mind-boggling $520,000.
So-called bitcoin miners secure the bitcoin network and process transactions in exchange for newly minted bitcoin and transaction fees via powerful computers that are believed to use as much electricity each year as some small countries.
04/22 update: Billionaire investor and bitcoin convert Mark Cuban has warned that bitcoin miners will be hit by the bitcoin halving supply cut.
Cuban added that bitcoin miners could transition to AI data processing and model training to make up for the bitcoin income shortfall. “There is unprecedented demand from AI for those GPUs,” Cuban said. “Will that distort the economics of mining? Not just from the perspective of cost, but could it be a better business to use those GPUs to train [AI] models?”
Meanwhile, analysts at crypto investment company CoinShares also predicted bitcoin miners may transition to artificial intelligence data processing due to the 50% cut in revenue as a result of the halving.
“This trend suggests that bitcoin mining may increasingly move to stranded energy sites while investment in AI grows at more stable locations,” the analysts led by James Butterfill wrote, noting that bitcoin miners including BitDigital, Hive and Hut 8 are already generating income from AI while TeraWulf and Core Scientific have plans to expand into AI.
Song added that the five following bitcoin blocks mined had “fees of 4.486, 6.99, 16.068, 24.008 and 29.821 bitcoin respectively,” calling them the highest fees ever and the situation “unprecedented.”
Alongside people paying top dollar to have a transaction be one of the first following the halving, bitcoin network fees have been pushed up by runes, a new bitcoin protocol from the developer behind the controversial non-fungible tokens (NFTs)-on-bitcoin ordinals, Casey Rodarmor.
