Record Bitcoin fees support mining profitability, despite the decline in the exchange rate
Power outages in northern China and the subsequent increase in bitcoin network fees have had a positive impact on the earnings of miners who still have the ability to mine cryptocurrency.
"The earnings of miners from commissions have increased significantly," says Chinese journalist Colin Wu. - Commissions paid to miners in one day amounted to $16.76303 million. The key reason is the power outages and inspections in northwest China, which resulted in a 20% decrease in hashrate and a congestion of transactions. Users who want to process their transactions as quickly as possible will pay miners more."
Data from the BitInfoCharts service indicates that the average commission for processing a bitcoin transaction is now $62.78. The value has already exceeded the levels of December 2017, when the demand for cryptocurrency made transactions on its network inaccessible to many users.
"This is a combination of a shortage of ASIC miners, a huge increase in the price of bitcoin compared to the complexity, and a sudden decrease in the hashrate. As a result, the block time has increased, a queue of transactions has appeared, and the commissions in the blocks have increased, " explained Thomas Heller, director of business development at Compass mining company.
Initially, the estimates of the hashrate lost by the bitcoin network varied greatly. Some resources estimated the drop in computing power at half of the previous values. Based on the data for five days, the founder of Coin Metrics, Nick Carter, estimated that the decrease in hashrate was 25%.
"Hashrate estimates are extremely variable over short time intervals," he writes. - Daily hashrate data is interesting, but not informative. The variability is too large to get useful values. It is preferable to get data for the whole week. In addition, bitcoin does not become more or less secure if you add or remove 20% of the hashrate. There is no defined security threshold. It's extremely safe."
Another metric that helps determine how profitable bitcoin mining is in the current environment is profitability per unit of capacity. According to BitInfoCharts, it is now $ 0.4186 per day from each TH/s. Current values are approaching mid-2019 levels. For comparison, in July 2020, shortly after the halving and before the start of the last rise in the price of bitcoin, it was about $0.07 TH / s.
Thus, despite the forced shutdown of computing power in China, the remaining miners are interested in continuing to produce cryptocurrency and enjoy the benefits of reduced competition. Their revenue increased, while the total amount of rewards for adding blocks fell along with the number of blocks. Over the past day, 116 blocks were added, with a standard value of 144. Some analysts have linked the recent fall in the price of bitcoin with a reduced hashrate and expressed concerns that miners may start to turn off the equipment, but the data so far indicate the opposite situation.
This week, the record interval between the addition of two blocks to the bitcoin network in 10 years was recorded. Users who were not lucky enough to send BTC in this and several previous blocks were forced to wait more than two hours for their transactions to be confirmed.