With renewed vigour: how miners earn during a bull rally
After a sustained crash of the crypto market, many miners were forced to turn off their equipment. However, since the exchange rate of Bitcoin has exceeded $ 7,000, things have gone to get better for crypto miners.
Miners’ profit depend on several variables: equipment, electricity prices and the rate of the coins being mined.
BTC miners’ revenues will grow again
Since April, the rate of Bitcoin has doubled from $4,100 to $8,000, and thanks to that fact the revenues of the first cryptocurrency miners have sharply jumped. According to the company Longhash, during the spring rally, the BTC miners earned the biggest commissions. Only on May 12, they received $ 580,000 for their work.
At the same time, the miners of
Ethereum were in the second place, but their income was significantly lower - $68,000 per day. Litecoin networks supporters ranked third with a total revenue of $1,100.
Thus, according to Diar analytic company, in April in comparison to March, the average amount of commissions on the Bitcoin network increased by 200%.
Over the past month, the BTC miners earned $13.7 million. For comparison, their income in March was only $ 3.9 million. At the same time, the total income from
mining in April was $291 million, which is almost 30% more than in March .
“Since Bitcoin has grown to $8,000, the complexity of the network has not changed much, which means the income of the miners has grown in proportion to the BTC
exchange rate growth. So, approximately two times - when compared with March. The Altcoins, too, became more profitable,” says professional miner Yuri Dromashko.
However, such a rapid growth of Bitcoin forced to join the network not only the owners of expensive equipment, but also newcomers.
“It should be taken into account that at this time new capacities have been turned on. We will find out the consequences of such mini-hysteria around mining a bit later, because the complexity of bitcoin mining is adjusted once every two weeks. I do not rule out that the profit per capita of the mining population will drop,” says the co-founder of 2Miners.com, Mikhail Korolev.
In addition to the growth of BTC, we are seeing an increase in the cost of transactions in the network, and this may scare away some Bitcoin users. But it is the increase in commissions that ensures decentralised network operation. Since the fact that halving is expected next year, so the reward for each mined block will be halved - from 12.5 BTC to 6.25 BTC, the increase in commissions is one of the motivation for miners to support the network.
Mining capacity distribution
As for the number of mining pools, not everyone was able to survive the
crypto winter. According to Diar, when compared to 2018, 40% of pools have stopped their operation. At the same time, however, the bitcoin hash rate is growing and becomes more decentralised due to the increase in the share of small pools.
“Mining pool is a separate activity, and like any business, it is very competitive. As a result, some pools disappear, while some others appear,” Yuri Dromashko explains.
According to him, for example, in Russia there are many specialists working on the development of this direction, and in the near future we will see a redistribution of power among the crypto producers.
“Reducing of the number of mining pools will play into the hands of the platforms survived, that's all. As a result, the profit of 40% of the pools that are to be closed will be distributed among the strongest in the form of profit, the number of miners and other bonuses, ” explains the co-founder of 2Miners.com Mikhail Korolev.
According to him, it is easier to do business during the growing market, since bull sentiment in the market brings both new people and an increase in the reward per unit in dollars.
What miners should do during a crisis
But what should miners do when bears return to the market again? If not mentioning the shut down at the mains, there are several options for developments.
Yuri Dromashko recommends to diversify activities and build a working business model on the resale of heat, which mining farms emit. According to him, this heat can be resold as a housing and communal services or create separate recreational projects like thermal waters.
Also, you can make money on the distribution of the computing power of the mining equipment.
“Affordable electricity and power outages, if necessary, are still the most versatile options. Over time, however there will be more. For example, in spring, representatives of the startup Vectordash talked about the development of an interesting platform. Its essence is to give miners the opportunity to share the power of video cards with the owners of weak computers. It’s a win-win situation when the first will earn, and the second will feel better. We just need to wait for the bright future,” says Mikhail Korolev.
How the new rally will end, we will know in the near future, but the growth of Bitcoin revived the industry, and mining in particular. With the growth of BTC, incomes of crypto miners are also growing, and this adds optimism for the players.
Author: Annabella Lapshin