It’s a tale of two Bitcoins, as active miners reap the rewards while others stay inactive.
Bitcoin (BTC) miner revenue increased as the network’s difficulty dropped to its lowest level ever, according to data.
Daily earnings have increased by more than 50%, according to data from tracking website Blockchain.com.
Bitcoin mining has an interesting dynamic
Bitcoin mining is currently in a state of upheaval, with around half of the hashing power offline while miners relocate from China, and it’s unclear how quickly they’ll be able to return.
At the same time, those miners who have not been harmed by the Chinese rout have seen half of their competition disappear overnight, resulting in increased profitability.
With data for the last few weeks now available, the magnitude of the shifts is clear. On Friday, the day before the difficulty change, daily mining revenue was roughly $20.7 million. It reached $29.3 million the next day, and $31.9 million on Tuesday this week.
All of this is the result of a “quite interesting dynamic,” according to a video guide to this week’s issue of Glassnode’s newsletter, “The Week On-chain.”
“We have a very interesting dynamic where approximately 50% of the hash power is currently offline and incurring significant costs due to logistics and simply not hashing, having hardware that is currently not working, and the other 50% has effectively seen half their competition leave the network,” it explained.
“While the protocol is now issuing the same number of coins as before, it is having problems winding down, we’re now in a position where half of the network has quadrupled its income while the other half is virtually creating nothing.”
Profitability for active miners has returned to levels witnessed when BTC/USD traded at $55,000–$60,000.
Block times see records
Miners aren’t the only ones who have felt the effects. According to Glassnode, average block durations reached new highs over the last week, only surpassed during Bitcoin’s “bootstrapping” stage in 2009–2010, before the cryptocurrency even had a stable price in US dollars.
Other on-chain indicators capture the divide between distinct groups of miners as well.
These reveal, among other things, how some people are spending their treasuries to cover relocation costs despite being unable to mine new coins and get a part of block rewards and fees.
Others, on the other hand, have been holding on to more BTC every block than they are spending, continuing an upswing that has lasted despite the price decline, which has now reached over 50%.
“This is one to keep an eye on,” Glassnode said.