Despite the automatic reductions in BTC issuance, Bitcoin miners today see a significant increase in their earnings if they exchange them into USD. Miners’ income currently hovers around US$207,000 per exahash (EH) of power contributed to the network.
The issuance of bitcoins is halved every 210,000 blocks mined; a figure that is achieved approximately every four years. This procedure, which occurs automatically in the Bitcoin network, is called halving.
The last Bitcoin halving occurred on May 11, 2020. At that time, the reward miners received for adding a new block of verified transactions to the blockchain was 12.5 BTC. After the halving, this incentive went to 6.25 BTC.
While right after the decrease in block rewards the miners also saw their earnings reduced, by the end of 2020 the picture began to change for these Bitcoin network workers.
During 2021 there were points where Bitcoin miners’ revenues were even higher than they are today. Earnings per exahash of power contributed to the Bitcoin network reached over US$400,000 several times.
There are a couple of reasons that have favored the profitability of Bitcoin miners, despite the declining rewards in this network. The first of these is the deflationary effect of halving. The fact that there is less availability of a resource makes it more valuable to those who own it in the face of those who wish to have it. However, it is important to note that there are many factors that affect the price of an asset in the market, not only its scarcity.
In this order of ideas comes another aspect that influences Bitcoin miners’ profits to look so bulky today: the price of BTC in the market. Its value is almost five times higher than it was when the last halving happened.
Bitcoin miners have in their favor the rise of BTC in the market compared to prices two years ago, as well as the development of more powerful and efficient devices for mining. However, there are factors working against them, such as the increased difficulty of mining and bearish waves in the cryptocurrency market.
Besides, Bitcoin mining difficulty increases as the hashrate of the network grows. This is in order to balance the speed of block production on the chain. Currently, Bitcoin’s mining difficulty is 28.5 Tera.