Bitcoin's mempool has cleared for the first time in two years amid declining network activity, forcing miners to accept as minimal as 1 sat/vByte fees despite the hashrate remaining at record levels. These developments in such a competitive environment have resurfaced long-standing concerns about Bitcoin's security budget. Meanwhile, smaller miners are increasingly exploring alternative PoW blockchains, with five of them emerging as particularly profitable options in 2025.
In January 2024, the mempool volume reached over 500 million vBytes of pending transactions. One year later, by February 2025, this figure fell to 0 vBytes during specific block intervals, forcing miners to produce non-full blocks for the first time in two years.
Since February 2023, inscription transactions have consistently filled Bitcoin blocks with their ~4 MB limit, clogging the mempool, raising miner fees, and crowding out regular financial transactions. At their peak, Ordinal and BRC-20 types of 'inscriptions' made up 60% to 70% of daily Bitcoin transactions.
In the Last months, inscription activity declined sharply: between late November 2024 and early February 2025, inscriptions of all types (7d average) plunged 73%, whereas standard financial transactions dropped only 16% in the same period.
(Source: Galaxy Research)
Although the mempool clearing due to a drop in daily transactions is recent, the average Bitcoin transaction fee has stayed flat at around $1.50 since the start of the year. Miners now take whatever they can get, processing transactions for as little as 1 sat/vByte just to fill blocks. This race to the bottom on fees resurfaces a long-standing concern about Bitcoin's long-term security budget.
Bitcoin's security budget pays miners for their hash power and consists of two parts: the block reward (currently 3,125 BTC) and transaction fees. This helps miners to keep operations running, covering everything from energy costs to hardware and staff.
(Source)
The security budget has two big hurdles: 1) block reward halving every four years and 2) transaction fees are historically volatile, and even during periods of high fees, they only make up 10% to 30% of miner income.
As the block reward shrinks to zero every four years, ensuring Bitcoin's supply caps at 21 million, miner earnings will mainly come from transaction fees. If blocks aren't full, fees stay low, raising concerns about a drop in hash rate, which, in turn, could compromise Bitcoin's network security.
Bitcoin-optimists usually counter these concerns with two key arguments. First, they bet on rising Bitcoin prices to boost hashprice — miners' revenue per hash unit. Second, they point to the implied evolution of Bitcoin beyond digital gold to a dynamic platform with fresh fee potential, citing an example of inscriptions.
Indeed, Layer 2 solutions could potentially fill the fee gap even if (or when) inscriptions completely fade. As Galaxy Research's August report highlighted, a single Bitcoin rollup using 400 KB for state data might use up to 10% of block space every 6 blocks for state transitions. So, at the 400 KB and with fees rates of 10 sat/vByte, rollups alone could generate $460K in monthly fees.
Overall, the empty mempool and stagnant fees send a clear message: miners need Bitcoin to evolve to stay profitable — they can't survive on minimal fees forever. L2 solutions might bridge the gap, but as of today the path to sustainable mining revenue remains uncertain.
Until then, major miners adapt and survive — they're signing data center deals, finding new revenue streams beyond pure Bitcoin mining. The big players know how to pivot when markets shift.
For smaller-scale miners seeking profitable alternatives, Hashrate Index highlighted the top five PoW altcoins for mining in 2025 that have proven to be profitable.
(Source: Hashrate Index)
Altcoin mining is tiny compared to Bitcoin's scale but packed with profitable opportunities. This comes with its own trade-offs and challenges, though: wild price swings compared to Bitcoin's relative stability, higher maintenance demands, and near-zero after-sale support from manufacturers.
Scrypt algorithm (DOGE, LTC)
Dogecoin and Litecoin lead the Scrypt mining scene, with their merged mining capability letting miners stack rewards from both chains simultaneously. DOGE's cult memecoin status pumps its hash rate, while LTC's speed and low fees keep it essential to the ecosystem. These coins form a lucrative dual setup for smaller miners, especially with next-generation Scrypt ASICs in play.
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Kaspa (KAS)
Kaspa rises in the mining rankings, both overt and covert, with its rapid block times pulling in converts daily. The project's rising profile — from major conference presence to Marathon Digital's adoption — signals growing momentum. At the same time, its GPU-friendly algorithm keeps doors open for miners with mid-range rigs.
Ethereum Classic (ETC)
Ethereum Classic endures as the GPU miners' refuge after Ethereum's shift to PoS in 2022. It keeps the old ways—pure PoW mining that ex-ETH miners know best. At the same time, regular upgrades and steady development maintain the chain's relative health, making it a viable option for miners who want to keep using their top-tier GPUs effectively in a familiar PoW environment.
Equihash algorithm (ZEC)
Equihash is a memory-intensive mining algorithm that powers cryptocurrencies like Zcash (ZEC). ZEC leads in this space, standing out for its privacy and shielded transactions. ASIC resistance keeps GPU miners in the game here, spreading the hash rate across a wider field of players.
Other Equihash-based coins offer their own mining plays. Their potential shifts with network difficulty and market swings, but 2025's GPU breakthroughs keep these chains profitable for savvy miners.
(Source: Hashrate Index)
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