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Industrial-Scale Bitcoin Mining Sparks Record Energy Demand
Bitcoin mining is scaling up at an unprecedented rate, drawing global attention as electricity consumption surges to new heights. Industry data reveals that the expansion of sophisticated mining operations has been mirrored by a remarkable uptick in energy use – even as Bitcoin transaction fees and overall network activity reach historic lows. This situation is igniting debate over the long-term sustainability of Bitcoin's proof-of-work consensus model amid evolving economic conditions for miners.
Bitcoin Network Energy Consumption Shatters New Records
A recent study by GoMining Institutional, leveraging insights from CoinMetrics Labs, highlights a rapid escalation in the Bitcoin network’s power requirements. Power demand has soared from 15.6 gigawatts (GW) in January 2024 to a striking 33.1 GW by May 2025 — more than doubling in just 17 months. The January-to-May period alone accounted for a 35% leap, attributed in part to the post-halving deployment of next-generation, energy-intensive mining hardware.
Analysts emphasize that, although mining rigs are becoming more efficient, the exponential increase in the number of devices is effectively canceling out these efficiency gains. The report notes that innovation is required not just in ASIC chip design, but also in the sources and management of mining energy.
Mining Difficulty Plateaus As Energy Use Climbs
While electricity consumption climbs, mining difficulty has not kept pace. In the first half of 2025, the Bitcoin network experienced only modest difficulty increases—from 109.78 trillion at the start of the year to 116.96 trillion by late June, a rise of just 6.54%. This is a significant slowdown compared to 2024, which saw monthly increases averaging 4.48%.
April 2025 saw a notable spike, with a 6.81% adjustment following the halving, and a 4.38% hike at the end of May, pushing difficulty to an all-time high of 126.98 trillion. However, this peak quickly reversed. By late June, extreme summer heat in North America forced several major mining operations to curtail activity, causing hash rate to plunge by 147 exahashes per second (EH/s). This triggered a -7.48% decrease in mining difficulty, marking the steepest decline since July 2021, when China issued a sweeping mining ban.
On-Chain Activity Slows, Transaction Fees Hit Record Lows
Contrary to the expanding energy footprint, Bitcoin's transaction layer is experiencing a prolonged slump. Network activity during the first half of 2025 has dwindled to levels last observed in October 2023. The moving seven-day average of daily transactions plummeted to about 313,510 by June 25, with a yearly low of 256,000 confirmed on June 1.
This sharp decline in usage is reflected in transaction fees. Throughout 2025, users routinely secured block space at the lowest possible fee of 1 satoshi per virtual byte (1 sat/vB), regardless of urgency. GoMining’s report points to “persistently low demand for blockspace,” allowing transactions at minimum fees even during what would formerly have been peak periods.
Mempool Clears Twice: A Rare Occurrence for Bitcoin
One of the most telling signs of the current environment is the rare full clearing of the Bitcoin mempool – the waiting area for pending network transactions. In 2025, the mempool emptied twice, a phenomenon not seen since April 2023, prior to the explosive popularity of Ordinals and BRC-20 tokens.
A cleared mempool means that all valid transactions have been confirmed, leaving miners briefly without any transaction fee revenue, relying solely on the block subsidy for their earnings. While such a situation benefits users with faster, lower-cost transfers, it poses a challenge for miners already strained by escalating power bills and stagnant fee income.
Long-Term Economic Uncertainty for Bitcoin Miners
The growing disparity between rising energy demand and declining revenue streams is fueling concerns about the viability of Bitcoin mining. With the 2024 halving now in effect and the next scheduled for 2028, block rewards will keep shrinking, intensifying miners’ dependence on transaction fees. Yet, if network activity and blockspace demand remain subdued, low-fee environments could squeeze profitability for even the most efficient mining operations.
Environmental factors are adding another layer of unpredictability. This summer’s record heat forced infrastructure cutbacks across major mining locations in North America, sharply reducing hashrate and amplifying the network’s vulnerability to regional disruptions. At the same time, the network’s energy footprint has doubled since early 2024, but fee revenue and transaction throughput have stagnated or declined.
Looking Ahead: The Paradox of Bitcoin Mining Expansion
Despite these challenges, mining firms show little sign of slowing their deployments. The imperative to secure block rewards and bolster network security continues to drive the rollout of ever more energy-intensive hardware fleets. Yet the sector’s long-term economics are now tied to a matrix of factors beyond their control: global energy markets, regulatory developments, end-user transaction demand, and Bitcoin’s own fixed halving schedule.
Ordinals, BRC-20 tokens, and other innovations could, in theory, reinvigorate the mempool and drive up transaction fees. For now, however, the mining ecosystem remains locked in a paradox — larger and more energy-consuming than ever, but yielding some of the lowest fee-based revenues in the network’s history.
With the final Bitcoin due to be mined around 2140, the looming disappearance of the block subsidy places heightened importance on transaction fees for sustaining the security and integrity of the Bitcoin blockchain. How the industry adapts to this evolving fee market — alongside rising operational costs and shifting user demand — will help define the future of Bitcoin mining and its global energy impact.
Source: crypto
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