Bitcoin mining revenue falls
Nov 30, 2022
The data shows that there is no more profit for Bitcoin miners, nowadays it is difficult to get cheap electricity to run efficient mining rigs.
In recent weeks, Bitcoin's cost of production has reached all-time highs, outpacing the spot market value and putting severe pressure on miners.
Bitcoin mining is no longer as convenient as it used to be
Also due to poor market performance and increased demand for computing, Bitcoin miner revenue has fallen to a two-year all-time low. However, thanks to the continued decline in the Bitcoin hash rate the last month gave miners a chance to recoup their losses.
Hashrate is a security metric that helps protect the Bitcoin network from double-spend attacks. However, in the general scheme of things, temporary measures taken by the community include buying cheaper mining hardware and moving to jurisdictions with low energy costs.
Going more specifically, in terms of numbers, total Bitcoin mining revenue (hence block rewards and transaction fees) fell to $11.67 million, a figure last seen in November 2020. , when Bitcoin was around $13,500, below the current price. Notwithstanding this, the price of bitcoins is higher than in November 2020, the greater difficulty in mining and the increase in energy prices make the income decidedly lower.
The mayor of New York has spoken out in opposition to all this energy spending due to mining. In fact, Eric Adams is one of the promoters of reducing the environmental costs associated with cryptocurrency mining.
The objective of the mayor of New York is precisely to make his city a center of discussion and search for solutions on the subject of mining sustainability:
"I'll work with lawmakers who are in favor and lawmakers who are concerned, and I think we'll come to a very good nexus."
The miners collecting profits are very few.
While miners are forced to pay $0.12 per kilowatt-hour (kWh) for electricity, very few mining rigs qualify as 'profitable'.
The data indicates that the cost of producing Bitcoin ($19,356 per unit) is much higher than the spot market value ($16,877 per unit). This means bitcoin miners need to get the cheapest electricity they can find on planet earth and run the most efficient bitcoin mining devices on the market today.
Electricity prices around the world in 2022 have skyrocketed in almost every country in the world, including those where mining is very present. The only countries that enjoy cheap electricity rates of less than one US cent per kWh include Qatar, Russia, Iran, Saudi Arabia, Venezuela, Kyrgyzstan, Cuba, Libya, Uzbekistan, and Kazakhstan.
While cheap electricity is good for Bitcoin miners, they also need the most effective ASIC mining units on the market, if the cost of electricity drops to $0.07 per kWh, 16 different ASIC-compatible machines will make a profit.
Canada will not accept Bitcoin mining for a full 18 months
In effect, according to several American newspapers, Canada has approved an 18-month moratorium that will prevent mining in its territory. All this within a seriously problematic situation for the local and public electrical system, which would already be inundated by debts.
Supposedly Manitoba is going through a very worrisome and complicated phase for its electrical network and in response to a request from the mining companies for 4.6 GW, it would have responded in the same way, that is, by prohibiting the activity for the next 18 months. In reality, those in the territory will be able to continue operating, and the ban will only be valid for new applications.
Note: All images are referenced and belong to cointelegraph
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Just wait until the next halving :D