As Yahoo! Finance reported on Aug. 30, despite the massive increase in the network’s hash rate – a factor that depresses the profitability of mining – there’s still more money in the game for miners than ever before.
All-time revenue for Bitcoin miners has topped $14 billion, according to fresh data from Coin Metrics.
The report notes that as of the Bitcoin network’s inception, it took eight years for miners’ total revenue to break past the $5 billion mark; the next $5 billion were exponentially faster, taking only a further eight months for revenue to break $10 billion.
Bitcoin miner revenue growing exponentially
If current mining profitability remains on track, the $20 billion revenue mark will be broken sometime in early 2020.
Bitcoin total mining revenue (USD)
Solid revenue despite soaring hashrate
The $14 billion figure is all the more impressive given that the network’s hash rate has been on a tear for several months now: continuing to break previous records throughout summer – with a new all-time-high posted just today, at 83.5 TH/s by press time.
A higher hash rate indicates that miners are expending record levels of computational processing power to solve and validate blocks – and pocket their rewards.
Higher compute intensivity translates into higher operational costs for miners – yet the robust revenue increase indicates this factor has not critically dented profitability.
Looking ahead, Bitcoin is under a year away from its next halving – a pre-coded 50% reduction of block rewards for miners – which is slated for May 2020.
While the halving can have bullish implications for a cryptocurrency’s price (by increasing scarcity), its impact on miners is keenly watched, with some concerned that lower block rewards will deter network participants and thus adversely impact the network’s hashing power.
Bitcoin Miners Revenue Plunge 48% as Halving Impact Kicks In
Revenue for Bitcoin miners plunged 48% a day following the third halving, as the full impact of the periodic supply cut event began to take effect.
According to data from crypto company Blockchain, the total value of block subsidies and transaction fees paid to miners crashed to $8.95 million on May 12 from $17.16 million the previous day.
The third Bitcoin halving of May 11 reduced the rate at which new coins are created, cutting the bonus paid to miners for solving complex mathematical puzzles that underpin the network by 50% to 6.25BTC per block.
Revenue peaked at $20.61 million on May 6, but has trended downwards ever since. Per the Blockchain data, miners revenue oscillated between $7.89 million and $28.60 million over the past 52 weeks, with the lowest point reached in March when the price of BTC tanked as much as 27% in a day.
Of the post-halving miners’ income, roughly 13% is made up of transaction fees, the figures show.
Fees are paid each time a Bitcoin transaction is processed and confirmed by a miner, who pockets the fees, in addition to the block reward, as revenue.
As mining revenues decline and companies shut down, Bitcoin transaction fees are now being considered a realistic option to help miners stay afloat.
In future, higher fees could also be used to accommodate rising demand for processing transactions while keeping the network secure, say experts. After the latest halving, transaction costs rocketed more than 400%.