How much money do Bitcoin miners make?
Profits are not easy to come by. Expensive hardware and risky cloud mining deals are the main challenges. So how much money Bitcoin miners made in the last years?
How much do Bitcoin miners make? Read about the general factors to consider at any point in time and a specific example based on the value of BTC in 2020.
In 2019 the total revenue of Bitcoin miners was about $5 billion. Bitcoin mining is not losing popularity and many people want to make money on it. However, the upcoming halving of the first cryptocurrency may change everything in the nearest future.
Revenue from mining last year is slightly inferior to 2018 results. According to calculations by analysts of The Block, in the 2018 miners managed to earn approximately $5.2 billion in BTC and in 2019 this figure fell to $5 billion. But in 2017, this figure fluctuated around $3.19 billion.
However, the research results show only an approximate data. Analysts calculated the profit, dismissing BTC price fluctuations. In reality, many miners keep some coins for themselves or sell them, but later. One way or another, mining is still popular and you can still make money from it.
What do miners get paid for?
There is one important metric — reward for a mined block, which is now 12.5 BTC or $10 500. There is such a concept as “clean” bitcoins, we are talking about coins that have a clean transaction history or have not yet been transferred anywhere. Such “pure” bitcoins are new 12.5 BTC, which were generated during the creation of the new block. And for them the bitcoins can get a price 20% or even 30% higher than the current market value. Because large investors do not want to have problems with law enforcement in the future, which will search for the bitcoins stolen by hackers, passed through the darknet or used to launder profits and other illegal transactions.
And one such precedent was just recently when a British court ruled to freeze and return the bitcoins on the Coinbase exchange, which one resourceful hacker first stole and then wanted to sell. So it is quite logical that big investors who go into the long run do not want to take risks and prefer to overpay for bitcoins with a clean transaction history.
And the second way of earning miners is a well-known all HODL strategy. Because if they are waiting for the natives, it makes sense to sell today only the amount of cryptocurrency that is needed to cover the cost of equipment, personnel and electricity, and to carefully store the rest of the bitcoins until the price flies “to the moon”.
Halving and its impact
What will happen when halving of the block award to 6.25 BTC occurs in May 2020? After all, as we have already shown, it is the reward for the block that is the main item of miners’ income, not fees. And here we need to clarify one important point: the miners can not set their own fees for payments, they can only choose to include transactions with higher commissions in the block. So if you are greedy and have paid the minimum, don’t be surprised that the transfer will take several hours.
The total hashrate of Bitcoin network grew steadily even despite the bearish market in 2018 and bearish market movements in late 2019. We can conclude that everything was fine with the price of the miners, and when in early 2019 the Bitcoin went up again, the miners began to return to the industry. And despite the fact that the price of the first cryptocurrency recovered only by half from its historic high of $20 000. This does not prevent the miners from setting a new hash rate record and driving the network capacity by almost 100 EH/s.
What will happen if the award for mining halves, will there be enough money for miners to continue working? In this case, there are two options for developing the situation.
We have already survived two halvinings and each time after it the miners only increased their hashrate, so the price of Bitcoin increased several times. And if we proceed from the theory that the bear market is behind us, and further on, according to the four-year cycle of the Bitcoin price, we move towards a new maximum, then everything will be fine with the miners.
What if Bitcoin fails to rise in the future? Well, it is possible outcome, but with very little possibility. Even now there is great chance to make money from Bitcoin mining with our cloud service Hashmart.io! Join our platform and start earning BTC right now!