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Blog: Bitcoin Mining Difficulty Falls
Weekly News RoundUp: Bitcoin Mining Difficulty Falls, Mempool Size And Transaction Fees Rise, Visa Files Patent For A Crypto System, Bakkt Partners With Marsh For $500 Million Custodial Insurance
Some major news and developments in the crypto market followed during the third week of May 2020. Post-Bitcoin halving on May 11, the Bitcoin network has seen some changes over the last week in terms of the expansion of mempool size, drop in mining difficulty, and rise in transaction fees.
In addition, other major developments include higher activity from financial institutions like Visa, Bakkt, and insurance giant Marsh. Let’s take a look at them in brief.
Bitcoin Mining Difficulty, Mempool Size, And Transaction Fees
On May 11, the Bitcoin network went through its third halving since inception, reducing the Bitcoin mining rewards to half from 12.5 BTC to 6.25 BTC. During the first adjustment after halving, the Bitcoin mining difficulty saw a drop of 6%. The Bitcoin mining difficulty basically shows how hard it is to compete for mining rewards.
In addition, the Bitcoin hash rate also dropped a whopping 30% post the Bitcoin halving. Before halving, the BTC hash rate was at 122 EH/S, which dropped to nearly 75 EH/s last week. The hash rate basically defines the processing power of the Bitcoin network or the speed at which a miner solves the Bitcoin code and adds new blocks.
Also, post the Bitcoin halving, the number of unconfirmed transactions on the Bitcoin network has shot up. Also, the Bitcoin mempool size grows to its biggest in the last two years since January 2018. The last seven day average of the Bitcoin mempool size stands at 70 MB.
The Bitcoin mempool represents all those transactions that are broadcasted but left from being included in the block. With the mempool size growing, the average confirmation time for a transaction to be included in a block has increased to between 7-16 minutes.
Since the number of unconfirmed transactions is on the rise, the transaction fee has also surged significantly. Since these unconfirmed transactions are choking the BTC network, the transaction fee has gone to as high as $6.67.
Bakkt Partners With Marsh For $500 Million Insurance Cover
ICE’s digital asset platform Bakkt has joined hands with insurance broker Marsh to offer an additional $500 million insurance for its Bitcoin custodial services, aka the Bakkt Warehouse.
With the global economy in turmoil due to the Coronavirus pandemic, Bakkt has seen a surge in institutional clients for its custodial services. Since the formation of Bakkt warehouse last year in 2019, the digital asset platform has expanded its crypto custodial business to more than 70 clients.
In the official announcement, Bakkt president Adam White wrote: “Beyond the $125M of insurance already in place at the Bakkt Warehouse, customers can now purchase more than $500M in additional insurance coverage, subject to underwriting criteria”.
VISA Files Patent For Central Banks To Replace With Digital Currencies
VISA – the world’s largest payment processing giant, has filed a patent for a new crypto system that can replace physical cash with blockchain-based digital currencies.
In the patent, VISA talks about improving the overall payment system wherein central banks and other commercial banks can work together, leveraging the private blockchain network.
The central bank will operate as a “central entity computer,” which will mint the digital fiat currencies and maintain a daily tally of issuance on the blockchain. The aim is to replace physical cash for digital fiat in a move towards moving to a completely cashless society.
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