Bitcoin miners face double whammy of reduced revenue, increased costs
Miners need to be incentivized to validate transactions and secure the Bitcoin network. The incentives come in two forms: block rewards and transaction fees. While the first is getting less lucrative as the rewards progressively reduceHowever, transaction count on the network has steadily climbed down from its all-time highs in May. The protracted low volatility phase and investors’ increased willingness to HODL tokens have proven to be a dampener for miners’ spirits.
Exchange supply fell to multi-year lows, suggesting that there was less BTC to be sold and bought, and hence fewer transactions to benefit from for miners.However, transaction count surged dramatically over the weekend. As a result, Bitcoin network’s hashrate hit an all-time high, as per a report by Bitcoin mining research company. Growing hashrate presents a new set of challenges for miners. They must expand their mining infrastructure and purchase specialized hardware.
But the report highlighted that prices of premium Application-Specific Integrated Circuits equipment have increased sharply, causing more pain for miners.Meanwhile, the hashprice trended downwards over the past week. An indicator of mining profitability, hash price is positively correlated to BTC’s price movements. After a rally in June, BTC has stayed sluggish since the start of July, as per
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