Bitcoin fundamentals remain unchanged despite significant events in 2022

[ad_1]

The year 2022 marked the start of a new crypto winter, with major crypto companies collapsing and the prices of digital currencies, including Bitcoin, plummeting.

Additionally, rising interest rates and general economic negativity are worrying investors.

Bitcoin’s fundamentals remain strong despite all of this. Let’s take a look at some of the Bitcoin metrics for the year 2022:

Bitcoin Circulating Power

The circulating supply of Bitcoin currently stands at 19,257,175 – 91.7% of the capped maximum supply of 21 million coins. Now there are 1,742,825 left to be mined before the 21 million bitcoin limit is reached.

On average, a block of bitcoin is created every 10 minutes, so the supply of bitcoin increases approximately every 10 minutes.

Year-over-year Bitcoin block time change (Source: BitInfoCharts)

However, despite a severe market downturn, including miner capitulation and forced liquidation, defi platform hacks, Bitcoin has largely maintained consistent block times of 10 minutes IN 2022.

Bitcoin miners block reward

Two components make up bitcoin block rewards: newly minted coins and transaction fees. When they successfully validate blocks on the network, the reward is given to miners.

The number of newly generated coins is regulated by a halving event that occurs roughly every four years. The Bitcoin Halving Event halves the supply of new bitcoins and aims to ensure that all 21 million bitcoins have been mined.

Despite moving all of their BTC to different addresses, the newly generated Bitcoin currently stands at 900/day this halving, and the reward for each block is $6.3 BTC.

Change in miner’s block rewards over the past few years (Source: Bitcoin Visuals0

Although block rewards are stable and predictable, transaction fees can fluctuate depending on several factors, such as network activity and transaction size.

Bitcoin’s average transaction fee was $0.834 on December 31, down from last year’s high of 2.829, a change of 70.5%.

Evolution of transaction fees over the past year (Source: ycharts)

This decline is mainly due to the increasing difficulty of the network, the high demand for computing and the poor performance of the market.

block height

The block height stood at 573.296k as of December 31st. Blocks created per day have remained constant despite miner revenue hitting new lows.

Growth in height of blocks and blocks created per day (Source: Bitcoin Visuals)

Each blockchain consists of a series of sequential blocks, with the first block being called the genesis block. The genesis block is considered to be at zero block height. Typically, the total height of the blockchain is equal to the height of the most recent block.

As block height continues, Bitcoin still has over 99% uptime, currently at 99.987%.

Bitcoin mining difficulty

As of December 31, 2022, Bitcoin mining difficulty stood at 35.36 trillion, up from 24.27 trillion a year ago.

Bitcoin Difficulty

This number represents the amount of computing power applied to mining that particular cryptocurrency every 14 days based on the amount of hash power competing for rewards on the network.

Higher mining difficulty indicates that more miners are trying to obtain this cryptocurrency. Hash refers to the amount of processing power that PCs use to build the blockchain: the more blocks of verified transactions are processed, the more bitcoins are mined. Despite a volatile market and a blizzard last month, mining difficulty adjusted with every block of 2016.

Bitcoin difficulty adjustment percentage change (Source: Glassnode)Read our latest market report

[ad_2]