Amidst a surge in Bitcoin (BTC) hashrate to unprecedented heights, the revenue from Bitcoin mining has plummeted to record lows. This unexpected trend has left many in the cryptocurrency community baffled.
As per data from Blockchain.com, Bitcoin network hashrate peaked at 414 exa hashes per second (EH/s) surging about 80% above figures recorded last year and 54% higher than figures from earlier this year.
Even though it appears there is improved network security, miners’ revenue has taken a nosedive. Revenue is just $0.060 per terrahash per second per day. To keep mining profitable at such hash rates there needs to be an upward adjustment of prices.
Bitcoin Miners’ Revenue Plummeted
The hashrate, which refers to the computational power utilized to mine new Bitcoins and validate transactions on the blockchain, has been steadily climbing to new all-time highs. Interestingly, this is generally seen as a positive sign, indicating the network’s robustness and security. However, the correlation between hashrate and mining revenue has taken a surprising turn.
Despite miners contributing more computational resources than ever, their revenue has experienced a drastic decline. Some industry experts propose several factors that might explain this phenomenon and the impact it will have on Bitcoin miners’ profitability.
Notably, some community members mentioned the overall market sentiment as a contributing factor. Bitcoin’s price while still volatile has not experienced the meteoric surges seen in previous years. With a relatively stagnant price, the value of rewards earned by miners in fiat currency terms has also been limited.
Additionally, network congestion and high transaction fees have led some users to seek alternative cryptocurrencies or payment methods. This has, in turn, affected the transaction fees collected by miners.
Players in the Mining Industry Look Ahead
Recall that, Riot Platforms has expanded its operations with the acquisition of over 33,000 Bitcoin mining rigs from MicroBT, a leading manufacturer in the crypto mining world. As per the announcement, the strategic purchase positions the company for success ahead of the anticipated 2024 Bitcoin halving event, which will reduce block rewards from 6.25 to 3.125 BTC per block.
Meanwhile, in March, data revealed that Bitcoin mining difficulty saw a rise of over 13.50%, requiring about 35.6 trillion hashes to mine one Bitcoin.
