As the world of cryptocurrencies evolves, the role of crypto miners seems to be diminishing in this process. According to the latest information, the amount of Bitcoin (BTC) held by crypto miners has recently reached a 10-year low.
According to the latest data obtained by crypto market research platform IntoTheBlock, it has dropped to its lowest level since 2010, with a total of 1.95 million BTC held by the entire mining community.
The data obtained on the subject are as follows:
- Crypto is evolving and miners have a smaller role in it.
- The amount of BTC in the hands of miners has reached the lowest level in 10 years.
- Bitcoin hash rate is close to record levels.
- This pressure on miners' margins causes miners to sell some of the cryptocurrency.
The movements of Bitcoin (BTC) amounts held by miners seem to follow a very different pattern than it appeared in November 2021. So as a result, the role of miners in the crypto world is dwindling as we go through the most turbulent time ever for mining operations.
What is Bitcoin Mining? Why is it done?
Bitcoin mining is for confirming financial transactions made within the Bitcoin market, providing transfers and generating new Bitcoins. Working with a decentralized system on the basis of blockchain, Bitcoin mining rewards the user who produces the fastest blocks and confirms transactions.
Each time a new Bitcoin is produced, the difficulty level of the blocks increases, and therefore computers with very powerful processors are required for mining. In other words, Bitcoin mining both adds transactions to the blockchain and releases new Bitcoin.
The mining process is all about compiling the last transactions into blocks and trying to solve a computationally difficult puzzle. The first participant to solve the puzzle places the next block on the blockchain and collects the rewards. The rewards encourage mining and include both transaction fees (paid to the mine in the form of Bitcoin) and newly released Bitcoin. The maximum number of Bitcoins that can be found in the market is 21 million.
Miners are needed to constantly confirm transactions made in Bitcoin. If a very radical and technological update does not occur, even after reaching the maximum number of Bitcoins, the miners will be rewarded for the transaction they solve, that is, they will win Bitcoin. This will allow mining to continue.