Bitcoin Miners’ July Revenue Rises Before August Events
A story that miners are all too familiar with is depicted in the most recent half-year period of mining revenue. Block rewards still make up most of the big contributions, while Bitcoin price swings and onchain activity surges could temporarily boost revenues. Though they get all the limelight during short spikes, transaction fees are really just a small part of what keeps mining going strong in the long run. According to monthly mining income data from Newhedge.io, there was very no recovery in July after June’s 23% loss, which not only reversed May’s gains but also exceeded them. The mining industry had one of its most successful months in recent memory in May, with revenue surging to $1.086 billion, up from $947.26 million at the end of April.
That drive was short-lived. Operators were swiftly reminded of the inherent instability in market conditions as June revenue plummeted to $836.41 million, a dramatic turnaround. Although Bitcoin’s value has dropped 2.2% in the last two weeks, the bigger picture doesn’t seem so bad. Although income conditions are still far lower than the high witnessed in May, the 1.6% increase in bitcoin over the previous 30 days has provided miners with some support. As a result of that small price increase, miners had a little more leeway to manoeuvre in July. The mining industry had a bump in monthly income in July, going from $836.41 million to $875.35 million. The word “hashprice,” which refers to the current market price of hashrate per unit of time, can also represent this. As reported by hashrateindex.com thirty days ago, the spot value of one PH/s was $29.01.
Even with July’s small improvement, hashprice is currently at $31.59 per PH/s, leading to limited margins. With two competing forks giving miners fresh reasons to reevaluate how they distribute their hashpower, August could bring major changes. Around August 8th or 9th, BIP-110 will enter its crucial signalling phase; however, the proposal seems unlikely to gain a lock-in given that support is still hanging near 2%. Instead of a substantial change to fee income, miners will see temporary chain instability. Two major events are likely to converge at the same time: the signalling window for BIP-110 and the next difficulty adjustment for Bitcoin. Estimates show that the difficulty has increased by 1.87%, which adds another layer of pressure as miners consider their options.
A more enticing compromise may be available in Paul Sztorc’s eCash fork later this month. When the difficulty of a new SHA-256 chain is low at the start, opportunistic miners can take advantage of the cheap prices to chase high short-term profits until economic forces bring them back into line with Bitcoin. The computers will eventually find a way to make money, and if there’s a big change away from Bitcoin mining, the miners who are still in it might have somewhat better economics after the next adjustment.
