Bitcoin mining revenue plunged to its lowest level in August 2024 following the Bitcoin halving in April 2024. The decline was primarily due to a decrease in the number of mined coins, reduced transaction volume, and lower reward fees—all consequences of the halving event.
According to the data from The Block, miners earned just $827.56 million in August, a 10.5% decrease from July’s $927.35 million and a 57% plunge compared to the peak of $1.93 billion reached in March, coinciding with Bitcoin’s all-time high. However, the earnings were 5% higher than the earnings in the same month in 2023.
The slump (August 2024 earnings) comes despite positive developments for Bitcoin holders in terms of Bitcoin price. Bitcoin was hovering around $25,000 in September 2023 with $727.79 million miners’ revenue. However, August 2024 concluded with just a 5% higher in earnings compared to a more than two-fold increase in Bitcoin price.
Transaction Volume and Mining Difficulty Affecting Bitcoin Mining Revenue
The decline in the Bitcoin mining revenue is primarily attributed to two factors: a decrease in transaction volume, and an increase in the mining difficulty. The reduced transaction volume is directly linked to the recent Bitcoin halving, which cut the block reward by 50% from 6.25 BTC to 3.125 BTC. Meanwhile, the growing number of miners using powerful computers has made it more difficult to mine new Bitcoins. This is reflected in the August mining difficulty, which rose to 89.47 trillion from 86.87 trillion in July, per Bitcoin Magazine Pro.
Similarly, the number of Bitcoin mined each month also decreased, dropping from 14,725 BTC in July to 13,843 BTC in August. The decline contributed to the overall decrease in Bitcoin mining revenue.
Additionally, transaction fees, a part of the miners’ reward, dropped in August. According to Bitbo and Blockchain.com data, the average percentage of a reward miners earned from fees was only 2% in August. This comes after a busy July, where the daily number of confirmed transactions reached a high for the year of nearly 631,648 on July 31st. However, the number dropped to around 594,871 by the end of Aug.
Seeking Alternative Revenue Streams
Faced with these challenges, some miners are exploring alternative uses for their computing power. Deals with artificial intelligence companies, offering their processing capabilities, have reportedly netted miners billions of dollars, offering a potential lifeline in a tightening market.
Currently, Bitcoin’s value has risen slightly to $58,388.05, but the significant increase in transaction volume is even more promising. While a surge in daily transactions is positive, miners primarily benefit from a consistent rise in transaction volume in the long run. Despite recent price increases, miners face challenges like rising difficulty and competition. Their continued profitability relies on adapting to new technologies and exploring new revenue streams.
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