The revenue generated by Bitcoin miners is down by 48% since the halving event took place four days ago. This is despite the price of the Bitcoin closing in on the $10,000 mark.
Mining Revenue Crashes
The third mining halving event on the Bitcoin network took place on May 11, with the reward for mining a block on the network slashed to 6.25 BTC from the previous 12.5 BTC. The halving of the mining reward has seen the revenue generated by Bitcoin miners drop by 48% over the past few days, with some miners no longer turning in profits from mining on the network.
According to data from cryptocurrency company Blockchain, $8.95 million was the total subsidies and transaction fees paid to miners on the Bitcoin network on May 12. This is down from the $17.16 million paid to the miners on May 11, prior to the halving event. The revenue paid to miners reached a peak of $20.61 million on May 6. However, it has been dropping ever since. Blockchain’s data indicates that revenue to miners was revolving between $7.89 million and $28.60 million over the past year, with the lowest being on March 10, when the price of BTC tanked by 27%.
The revenue paid to miners, following the halving event, was made up of 13% transaction fees, the report added. The transaction fees are paid every time a Bitcoin transaction is processed and confirmed by a miner on the network. The transaction fees and the mining rewards are the revenue of the miners on the BTC ecosystem.
Miners Might be Looking to Leave the Network
The drastic drop in revenue could see several miners leave the Bitcoin network as it becomes unsustainable for them to continue operation. This is despite the price of BTC recovering from its slip a few days ago to now rally towards the $10,000 mark.
Although the price is recovering, the hashrate on the Bitcoin network has declined to 98 exahashes (EH/s). Data obtained from bitinforcharts.com reveals that this is a 27% drop from the 135 EH/s observed on Monday.
To be sure of the decline in network transactions, the seven-day average shows that the hashrate dropped 114 EH/s from the pre-halving high of 122 EH/s. The reduction in the network hashrate suggests that some miners have either reduced their mining activities while some have shut down operations entirely. The reduction in mining rewards makes it harder to generate profits, especially for the older machines that are expensive and do not have much computing power.
Overall, the average time it takes to mine a block on the Bitcoin network has also increased due to the decline in miners. The mean block interval time rose to 12 minutes on Wednesday from the 8.5 minutes recorded on Sunday.
Market experts like Alex de Vries, a blockchain specialist and the founder of financial and economic news portal Digiconomist, pointed out that mining hardware like the S9 has already lived longer than anticipated. As such, the price of Bitcoin has to double before these machines can become profitable to the miners again. Vries is expecting the hashrate to drop by 20% in the short-term, with the hashrate currently down by 6.5%.
If the price of Bitcoin continues to go up, then the older machines could churn out profits for the miners. The price of BTC has to go above $13,760 for the Antminer S9 machine to become profitable to the miners again, according to a calculator provided by Poolin.