Miner Flows Volume Share
In proof of work blockchains such as Bitcoin, miners play a key role by validating transactions and contributing resources to secure the network. In compensation for their contributions, miners are rewarded with coins which are issued every block. More details on how mining and the Bitcoin halving work can be found in this article.
IntoTheBlock has built a proprietary machine learning algorithm that identifies miners’ addresses and monitors their holdings and activity. For the Miner Flows Volume Share indicator, IntoTheBlock divides Miners’ Total Flows by the total on-chain transaction volume. The result represents the share that miner activity makes out of all transaction volume.
Miner Flows Volume Share for BTC
The Miner Flows Volume Share indicator is helpful to put miner activity relative to the total amount of on-chain volume. As seen above, the significance of miner activity has been decreasing significantly, particularly after every halving as signalled by the arrows on top of the graph.
Overall, this is valuable information to consider. Particularly in periods like during the May-June 2021 Chinese mining migration, it is worth pointing out that although miners do manage high Bitcoin reserves, they represent a small fraction of the total activity happening on the blockchain.