Bitcoin miners reap profits as mining difficulty hits 3-month low

by James · May 6, 2023

Bitcoin miners reap profits when mining difficulty hits 3-month low

Bitcoin miners have seen a boost in profits after the planned difficulty adjustment resulted in a positive balance. This is the first time since February that the difficulty level, which governs the issuance of coins on the network, has decreased. Recent data from Braiins showed that Bitcoin computing power experienced a drop of over 45+ EH/s between April 20 and 28. However, this trend has been reversed with the increase in miner profits in the past week.

Despite recovering the hash rate to 350 EH/s, it was not sufficient to prevent a 1.45% difficulty adjustment retracement, as indicated by Mempool.space. Currently the mining difficulty is 48T (trillions). This change in difficulty affects miners’ profitability, as less competition for the reward means increased estimated income for those still connected to the network.

Bitcoin Hashprice has experienced a rapid increase in the last 2 weeks: source braain

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Bitcoin miners profit as the price of hash increases

Current price for Bitcoin hash power rose to $0.088/TH/day ($88/PH/day), up from $0.077/TH/day ($77/PH/day) on May 2. This increase of 11.49% over three days is a positive development for Bitcoin miners, indicating increased profitability for their business. The hash price is a crucial metric for calculating the profitability of a mining operation, and represents the value assigned to a computational unit in dollars per terahash or petahash per day. While the reason for last week’s significant hashrate drop is uncertain, the current state of the network justifies the rapid reconnection of miners.

Bitcoin block rewards have increased in recent days: source @braain

Recently, there has been increased interest in BRC-20 tokens, which is used to create memecoins, causing network congestion in Bitcoin within days of its release. As recently reported, this could be a possible factor in the hashrate drop. As a result of this high activity on the network, fees now account for 12.4% of miners’ earnings.

Related reading: Bitcoin Breaks Out: Experts Predict $36,000 Target As Market Outlook Remains Positive

Bitcoin commissions rise after new ordinary record

In the wake of the growing interest in tokens that can be registered on Bitcoin through Ordinals, the value of transaction fees paid by Bitcoin users has increased. In a single day, average transaction fees have more than doubled. According to data from Mempool.space, the applicable transaction fees range from 70 sat/vB to 100 sat/vB. This means that a transaction of 140 vB (median) will require a payment of almost $4 USD to be confirmed within the first few minutes.

Average Bitcoin transaction fees have increased due to the increase in Ordinals: source @mempool

Note that the sudden interest in tokens registered through Ordinals is responsible for the backlog of transactions that need confirmation, leading to an increase in average commissions. According to Murch, a Bitcoin developer, the mempool depth has reached 104 blocks despite having 8 blocks per hour for the past six hours. The rise of Ordinal’s NFTs has not been without controversy, as some Bitcoin maximalists blame this trend for the increased transaction fees that have resurfaced in recent months.

Related reading: Former DoJ Kennedy Jr, complaining about global financial censorship, shows support for Bitcoin