Top 5 News of the Week!

PointPay
3 min readMay 19, 2024

Dear PointPay Family,

As the week comes to a close, it’s time to gather all the key news in one place! Welcome to our regular Top 5, and stay up-to-date with the latest industry trends.

Bitcoin Mining Difficulty Decrease

A significant event has occurred in the cryptocurrency community: Bitcoin mining difficulty has substantially decreased. After processing 842,688 blocks, the Bitcoin network automatically adjusted the difficulty level, reducing it by 6% to 83.1 trillion.

This is the most notable drop since the last bear market. The adjustment was a response to an approximately 10% decline in the overall network hash rate. The reduction in computational power has led to a record low in Bitcoin’s hash price.

This decrease in mining difficulty can be a relief for some miners facing challenges after the recent halving of block rewards. Such automatic adjustments help maintain stability within the Bitcoin network.

US Inflation Data Spurs Cryptocurrency Growth

Recent statistics revealed a slowdown in annual inflation in the United States to 3.4% from the previous 3.5%. These figures met analysts’ expectations.

Positive macroeconomic data had a favorable impact on the cryptocurrency market. Within an hour of the inflation data release, Bitcoin’s price jumped 2.6%, staying above $64,000. Ethereum also saw a 2.4% rise, nearing $3,000 per coin.

The market’s reaction reflects investor optimism toward major digital assets. The slowdown in U.S. inflation is a positive signal for cryptocurrencies, which many view as a hedge during periods of rising consumer prices.

Ethereum Co-Founder Proposes Gas Fee Solution

Vitalik Buterin, co-founder of Ethereum, has introduced a new initiative aimed at optimizing gas usage and transaction data processing on the network. The proposal, named EIP-7706, introduces a new approach to managing calldata — the data transmitted when executing smart contracts.

The primary goal is to reduce the maximum calldata size per block and make this data more accessible for users. Buterin suggests creating a separate transaction fee market for calldata, setting different base fees and gas limits for various types of operations.

This new mechanism aims to address the shortcomings of Ethereum’s current gas model. EIP-7706 introduces a unified approach to managing different types of gas, enhancing the network’s efficiency and stability. Transactions will include a base fee and a priority fee for streamlined processing.

Buterin’s proposal addresses the high fee issue during peak activity periods and aims to further scale the Ethereum ecosystem.

Natural Decrease in Ethereum Gas Prices

The Ethereum ecosystem is experiencing a decrease in gas fees — transaction fees. Daily fees have dropped by 93% compared to peak values six months ago. This makes the blockchain more accessible for regular users and developers but raises concerns about network sustainability due to potential reductions in miner revenue.

The reduced load on Ethereum is largely attributed to the overall market lull and the recent Cancun-Deneb upgrade, which improved network performance. Future fee dynamics will depend on various factors, including user activity and upcoming protocol updates.

Major Companies Announce Plans for Digital Asset Integration

Amid rising prices of leading cryptocurrencies like Bitcoin, Ethereum, and XRP, several major financial institutions have announced plans for large-scale digital asset integration.

Visa, Mastercard, JPMorgan, and Citi, along with other banks, are testing a blockchain system for tokenizing traditional assets. This regulated settlement network, based on Bitcoin technology, will enable the creation and tracking of digital securities without intermediaries.

Analysts note that the rapid growth of the crypto market to $2.5 trillion, driven in part by macroeconomic factors, is fueling institutional interest. BlackRock has launched the first tokenized investment fund, calling tokenization “the next generation of markets.”

These initiatives could be a significant step toward the mainstream adoption of cryptocurrencies by the traditional financial system and accelerate the integration of digital assets into the global economy.

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