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In reality, after halving, 17% of Bitcoin miners’ income comes from transaction fees

May 16, 2020

Halved with the block reward, heMiners mostly rely on Bitcoin transaction fees (BTC) to get yourself.

Miners lost 61% of their income

On May 10, miners earned 2,188 BTC, on May 12 this number dropped to 852 BTC – a decrease of 61%. Halving the block reward forced some miners out of the chain and reduced the network hashrate. This in turn led to an increase in the block interval, which means that fewer blocks processed in one unit of timeThis reduces the number of block rewards available to miners.

Miner revenue and fee income. Source: Glassnode

In reality, after halving, 17% of Bitcoin miners’ income comes from transaction fees
In reality, after halving, 17% of Bitcoin miners’ income comes from transaction fees

Miner’s income and commission income. Source: Glassnode

Death spiral mini phase

What has been developed so far could be called a mini death spiral stage. The only salvation for miners is that congestion on the network has led to a sharp rise in transaction fees: from $ 0.62 in late April to $ 5.21 on May 15. Currently as a result of this dynamic, The transaction fees make up 17% of the miners’ income. This is the highest rate since January 2018.

Bitcoin transaction fees. Source: blockchain.com

Bitcoin transaction fees. Source: blockchain.com

Miner revenue in USD decreased from $ 19.25 million on May 9 to $ 7.82 million on May 12;; a decrease of 62%. The next level of difficulty will be adjusted in three days. However, the live calculation predicts an increase in difficulty as the hashrate increased significantly before halving. At the time of arrival, however, the level of difficulty will likely decrease slightly, which should help the remaining miners in the network.

Miners revenue. Source: blockchain.com

Miners’ Income. Source: blockchain.com

It is possible that miners will have to rely more on commissions when Bitcoin matures and each new halving further lowers the block reward until no more new Bitcoins have to be mined. However, Higher commissions make the network less attractive to users.

Paradoxically, as Cointelegraph previously reported, many mining industry insiders believe that the decline in the hash rate is a bullish sign of Bitcoin as it will make the situation more profitable for the remaining miners.

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