Bitcoin: Network activity surges, miners rake in the moolah

Posted: September 17, 2023

• Bitcoin’s daily transaction count hit an all-time high on 15 September.
• Despite the jump in fees, miners didn’t rush to liquidate their holdings.

Bitcoin [BTC] sprung into activity over the past week as more people utilized the network to make transactions.

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Daily transaction count hits ATH

According to on-chain analytics firm IntoTheBlock, the blockchain recorded cumulative fees of $6.3 million from the start of the week up to 15 September. This represented an impressive 40% growth from the previous week. Moreover, when compared to the same period last year, the fees, which are a vital component of the miners’ revenue, doubled.

A peek at transactions’ data revealed a sharp increase in the daily count over the week. In fact, the daily confirmed transfers hit an all-time high of 703, 504 on 15 September, as per Glassnode.

Source: Glassnode

As transactions peaked, the network got jammed. According to Mempool data, the number of unconfirmed transactions in the queue shot up to 527,710 at the time of writing, prompting users to bid up fees to jump the queue.

How did the miners react?

While the surge in fees affected users who wanted low-value transactions to be processed, BTC miners laughed all the way to the bank. As seen from the graph below from CryptoQuant, the number of coins held in miners’ wallets surged to highs not seen since 1 June.

Source: Glassnode

Miners rely on incentives such as block rewards and transaction fees to offset their high electricity and hardware costs. Hence, they liquidate their assets quite frequently. But was it the case this time around as well?

Interestingly, despite the jump in fees, the flow of BTC coins from miners to exchanges has dropped over the week. This implied that miners were hopeful of a further rise in network fees and thus prepared to stockpile for a few more days.

Source: CryptoQuant

Read Bitcoin’s [BTC] Price Prediction 2023-24

Miner returns extra fees

Apart from the usual fluctuations in the aforementioned metrics, a bizarre incident came to light. A Bitcoin miner who accidentally received around 19.8 BTC, or $525,610 at current market prices, from blockchain technology startup Paxos, returned the funds.

F2Pool have sent the 19.82108632 BTC fee overpayment back to Paxos https://t.co/IB32RNq5uO

— mempool (@mempool) September 15, 2023

The concerned miner was in two minds regarding the decision and took to X (formerly Twitter), asking for advice from his followers. Interestingly, most of them voted to distribute the funds to other Bitcoin miners.