Assessing the Bitcoin network – Its future as NFTs, miners face challenges

• Interest in Bitcoin NFTs declined significantly over the last few days.
• Miner revenue fell, and hashrates declined.

Bitcoin [BTC] witnessed a massive surge in price over the last few days, causing it to jump past the $65,000 mark. However, the same growth wasn’t observed on the Bitcoin network.

Taking a look at the NFT space

According to recent data from CryptoSlam, interest in the NFT sector was slowly waning. Notably, sales volume for Bitcoin NFTs fell by 17% over the last 24 hours.

Popular Bitcoin NFT collections such as BONE and JIGO witnessed a massive decline in both floor value and volume in the last few days.

Source: Crypto Slam

This declining interest in NFTs can harm the potential for growth on the Bitcoin network and can impact overall activity as well.

The number of Daily Active Addresses also fell significantly, showcasing that interest in Bitcoin’s ecosystem was waning at press time.

Source: Santiment

How are miners doing?

A decline in activity on the Bitcoin network can also impact miner revenue. When there’s a decline in activity on the Bitcoin network, there are fewer transactions happening. This translates to lower transaction fees.

Since miners earn transaction fees for including transactions in blocks, a decline in activity translates to lower overall transaction fees collected by miners.

In the last few days, the revenue generated by the miners fell from $107 million to $30 million at press time.

Source: Blockchain.com

The hashrate for BTC had also declined in the last few days, which can create difficulties for miners.

While it seems beneficial that solving blocks becomes easier with lower hashrate, the automatic difficulty adjustment of the network reduces the block reward each miner receives when there are fewer competitors.

This puts more pressure on transaction fees as a source of income for miners.

However, the very reason hashrate might be dropping, a decline in network activity, often means there are also fewer transactions and lower transaction fees.

Read Bitcoin’s [BTC] Price Prediction 2024-25

This creates a major problem for miners, as they get a smaller share of fixed block rewards and have less opportunity to earn from transaction fees.

These factors can increase selling pressure on miners as they will be driven to sell their holdings to remain profitable.

Source: Blockchain.com