Mark Cuban Sounds Alarm on Bitcoin as Transaction Fees Plunge Post-Halving

The Bitcoin halving is over and what’s called the ‘block subsidy’ – the reward miners get for their work – has decreased from 6.25 bitcoin to 3.125 bitcoin on block 840,000. So far so good, but fees on the network had been unusually high amid the Rune launch and people paying to include their names or messages in the first transaction post-halving.

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These fees are unusually high, with over US$146 (AU$226) to pay for a medium-priority and US$170 (AU$263) for a high-priority transaction. By the time of writing these fees have come down significantly, to US$15.84 (AU$24.53) and US$16.87 (AU$26.12) respectively.

Mark Cuban said in a statement to The Block that it would get harder for miners to get paid post halving. The Dallas Mavericks owner said there is an option for miners to make up for lost revenue – and that is in AI. According to the Shark Tank host:

The truly interesting question related to halving is the GPU market. Miners need more power. There is unprecedented demand from AI for those GPUs. Will that distort the economics of mining? Not just from the perspective of cost, but could it be a better business to use those GPUs to train models?

Mark Cuban

Are Bitcoin Miners Able to Pivot?

While ASIC machines used by Bitcoin miners are not suitable for AI computing, many are considering a pivot to other technologies. As Nic Carter of Castle Island Ventures comments:

If you’re a bitcoin miner, your machines can’t be repurposed. You have to buy net new machines in order to do it and the data center requirements are different for AI versus bitcoin mining.

Nic Carter from Castle Island Ventures

CNBC reports in the past year, there’s been a significant increase in the demand for AI compute and infrastructure capable of handling the substantial workloads needed for new machine learning applications.

According to a report by CoinShares, more miners are expected to transition towards AI in energy-secure locations due to the potential for increased revenue.

This trend suggests that bitcoin mining may increasingly move to stranded energy sites while investment in AI grows at more stable locations.

CoinShares

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Several mining companies, including BitDigital, Hive, Hut 8, Terawulf, and Core Scientific, are either already engaged in AI operations or have plans for AI expansion.