Despite the ban imposed by China a few months ago and the controversy surrounding excessive energy consumption, profits from Bitcoin mining are increasing.
According to the latest report by Glassnode, a company specializing in research and metrics on blockchain and cryptocurrencies, daily earnings for Bitcoin miners would have exceeded $40 million, registering an incredible +275% compared to the pre-halving of 2020, and even +630% compared to the immediate post-halving, which halved the rewards for miners to 6.5 Bitcoin.
Based on Glassnode’s data, the daily record would have been reached on 14 March 2021 with a daily gain of $64.7 million. The entire month of March would have averaged gains in excess of $50 million. At that time the price of Bitcoin was around $60,000.
Bitcoin mining profits: the numbers
The earnings for miners would therefore amount to about 1000 BTC per day.
The report explains that most of this amount comes from the block revenue, which is about 900 BTC per day, while the revenue from transaction fees would constantly fluctuate between 75 and 125 BTC per day.
The miners’ profits also depend on the large consumption of electricity used by the activity of solving the very complicated mathematical calculations to resolve and validate the blocks of the chain.
And this is one of the main reasons for the Chinese ban, where about 45% of all Bitcoin mining operations in the world were based.
Miners are on the hunt for new destinations and new energy sources
China’s ban on cryptocurrency mining does not seem to have caused too many problems for what appears to be an increasingly profitable business, despite the problems of high electricity consumption.
Chinese miners immediately relocated their sophisticated factories to countries such as neighbouring Uzbekistan, Vietnam, Laos, Texas and Canada. These countries have an abundance of cheap energy for various reasons.
The real challenge for the future for this activity will be to use more and more alternative energy sources such as solar, wind, hydroelectric and especially nuclear.
Two brothers from Dallas, aged 9 and 14, have started a Bitcoin and Ethereum mining business almost for fun. By using only renewable energy, they are earning about $30,000 a month.
In recent days, El Salvador has mined 0.00599179 bitcoin, about $269, with energy from a volcano.
China’s ban has made the business more profitable
According to some experts, China’s own ban on mining has led to increased earnings for miners.
″For the first time in the bitcoin network’s history, we have a complete shutdown of mining in a targeted geographic region that affected more than 50% of the network”,
Said Darin Feinstein, founder of Blockcap and Core Scientific told CNBC in August.
When more people are mining, it means fewer blocks are being solved every day. Fewer competitors and less difficulty in solving blocks means that any miner would have, as GlassNode’s data actually shows, a significant increase in profitability and more predictable revenues.
In his interview with CNBC, Feinstein also said that most of the equipment in China that was decommissioned was old equipment, not very efficient and with limited profit margins.
In other words, this situation would have created a hashrate deficit, making it less difficult to solve the mathematical calculations needed to mine Bitcoin.
And this condition, according to experts, will last at least until the end of 2021, leading to higher profits for miners.