New on-chain data provides an early look at the impact of the Bitcoin halving on miners powering the network.
Immediately prior to the May 11 halving event, total miner earnings were $ 17 million, according to data collected by Blockchain.com, before dropping to $ 7.82 million.
On May 11, the BTC reward for completing a block was reduced by 50% to 6.25 BTC, with miners’ earnings immediately dropping 48%.
The increased pressure on miners has forced many to fold. Alejandro De La Torre, vice president at mining pool Poolin, speculates that a significant number of miners making up as much as 30% of the total BTC network hash ratio struggle to make a profit, largely because their operations run on old and inefficient equipment, such as Bitmain’s S9 miner.
De La Torre writes,
“While we expect most of these miners to stop after halving, it is likely that some of them will have cheap enough electricity to survive in the near future.”
Chinese news ChainDD reports that Wu Tong, deputy director of the Ministry of Commerce’s CECBC Blockchain Special Committee, expects miners to face fierce competition amid higher industry consolidation.
“For the Bitcoin mining industry, about 20% -40% of miners will close in the short term as revenues calculated with the stable price are cut. In the long run, with the arrival of the rainy season, the computing power will recover and eventually reach a relatively stable state. During this process, small and medium-sized machines will inevitably be shut down and industrial concentration will increase. ”
Transaction costs are also increasing, by around 400% since early May and reaching their highest level since July 2019, according to Bitinfocharts.
While miners are in pain in the short term, a spike after halving Bitcoin’s price in half could lead to higher earnings in the long run, with more participants eventually rejoining the network.
Bitcoin is currently trading at $ 9,618, up 6.25% in the past 24 hours and up more than 14% since it hit a 7-day low of $ 8,416 on May 11. Ethereum is up nearly 2% at $ 199 and XRP is up 1.22% at $ 0.2029, according to CoinMarketCap, amid a broad crypto rally.
Several other leading cryptocurrencies are making gains on Thursday, including Bitcoin Cash, up 2.21%; Bitcoin SV, an increase of 2.75%; Litecoin, an increase of 1.93%; Binance Coin, up 1.38% and EOS, up 2.01%, at the time of writing.
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