Welcome to this week’s edition of This Week in Crypto, where we bring you the most pivotal developments from the cryptocurrency world. This week, we’re diving into Bitcoin’s historic milestone as it processes its billionth transaction, a testament to the network’s enduring influence and growth. Meanwhile, the fallout from FTX’s collapse continues, with a new compensation proposal set to return billions to creditors, albeit amidst some controversy. And in the mining sector, Bitcoin’s mining difficulty has seen a notable decrease following the latest halving event, prompting a reshuffle among miners. Join us as we explore the implications of these events and what they mean for the future of cryptocurrency.
Bitcoin Hits One Billion Transactions 15 Years After Inception
The Bitcoin network recently achieved a significant milestone by processing its one billionth transaction, 15 years after the cryptocurrency was created by Satoshi Nakamoto. This historic transaction was confirmed in block 842,241 at 9:34 pm UTC on May 5. Since its inception on January 3, 2009, the network has handled an average of 178,475 transactions daily. However, these figures do not account for additional transactions conducted on the Lightning Network, a secondary protocol that facilitates faster transactions.
Despite this achievement, Bitcoin is not the first cryptocurrency network to surpass the billion transaction mark. Its main competitor, Ethereum, has already processed over two billion transactions since its launch in July 2015. This milestone for Bitcoin coincided with increased activity around its fourth halving and the launch of the Runes protocol, which momentarily boosted daily transactions to a record high of 926,000 in April.
FTX Outlines Billions in Compensation for Creditors
FTX has announced a proposal to compensate creditors affected by its 2022 collapse, potentially paying out between $14.5 and $16.3 billion. This plan, still pending approval from the United States Bankruptcy Court for the District of Delaware, aims to cover 100% of the bankruptcy claim amounts plus additional compensation for the time value of lost investments. Specifically, creditors with claims under $50,000 are eligible for a 118% recovery, which represents 98% of FTX’s creditors. Despite these assurances, the proposed repayments will be based on the asset values at the time of FTX’s bankruptcy in November 2022, rather than current, higher market values, leaving some stakeholders unsatisfied.
Critics have voiced concerns over the fairness of the proposal, suggesting that it does not fully reflect the recovery of recent market upsurges. FTX’s approach to addressing its financial shortfall has included significant asset sales, such as the $884 million sale of shares in artificial intelligence firm Anthropic. However, FTX’s restructuring plans confirm that there will be no revival of the cryptocurrency exchange, which was one of the largest trading platforms before its downfall.
Bitcoin Mining Becomes Easier as Network Difficulty Drops 6%
The difficulty of mining Bitcoin has recently decreased by nearly 6%, as reported by BTC.com, due to a drop in Bitcoin’s price and a halving that reduced mining rewards from 6.25 to 3.125 BTC per block. This decline in difficulty, which measures the effort required to secure the network through mining, signals that fewer miners are finding it profitable to operate, leading to a less robust network. Mining difficulty adjustments are an expected outcome following a halving, which occurs roughly every four years to control Bitcoin’s supply.
Industry experts explain that these adjustments are part of a natural cycle intended to streamline operations and ensure only the most efficient miners remain. As less profitable miners leave the network, those with more efficient operations or access to cheaper energy can potentially reap greater rewards due to less competition. Scott Norris, CEO of mining firm Optiminer, views these shifts as healthy for the network’s longevity, suggesting that miners who adapt by upgrading technology or optimizing costs will continue to support network growth. This cycle of adjustment, although causing temporary reductions in mining power, is seen as a beneficial mechanism to maintain the network’s economic balance and security.
