Data from on-chain analytics firm Glassnode has revealed the all-time aggregate profit margin for Bitcoin miners; Here’s what it is.
Bitcoin miners have made a profit of 37% of their total investment
In a recent tweet, Glassnode shared the latest data on where miners currently stand in terms of their revenue, costs, and profits. To calculate the earnings of these chain validators, the analytics company first took the sum of the “thermocap” and transaction fees earned by this cohort over its lifetime.
The thermocap is an indicator that measures the cumulative sum of the issuance multiplied by the spot price of bitcoin. In simpler terms, this metric tells us the total value of block rewards miners have earned over the lifetime of the network.
To determine the cost of this group, Glassnode used its “Difficulty Regression Model”. This is a model for determining the production costs for Bitcoin and is based on “mining difficulty”.
Mining Difficulty is a feature of the BTC blockchain that controls how difficult miners find it to mine on the network. Such a concept exists because the chain wants to keep its block production rate (the speed at which miners hash blocks) at a constant value.
Whenever the computing power (the “hashrate”) plugged in by the miners changes, their ability to mine naturally changes as well. For example, miners can complete their tasks faster by connecting more machines to the network.
However, as mentioned, the network doesn’t want miners to go faster (or slower) than the default rate, so it adjusts the difficulty to neutralize this change. In the case of this example, the chain difficulty would increase in response, slowing the miners back down to the desired speed.
The Difficulty Regression model assumes that Difficulty includes all costs that miners have to pay, as it is directly related to the amount of computing power those validators have connected to the network.
Well, here is a chart showing what the cumulative miner revenue and cumulative Bitcoin miner production costs look like right now:
Miner Costs, Income and Profits | Source: Glassnode on Twitter
As shown in the chart above, bitcoin miners have generated lifetime revenue of approximately $50.2 billion while their cumulative production costs are approximately $36.6 billion.
The revenue was higher than the costs for this group, which means that the BTC miners have made some profits. Speaking in numbers, the miners made a total profit of $13.6 billion. This figure represents a 37% return on the investments made by these chain checkers.
BTC price
At the time of writing, Bitcoin is trading around $28,700, up 4% over the past week.
It looks like the value of the asset has increased a lot over the past day | Source: BTCUSD on TradingView
Featured image by Brian Wangenheim at Unsplash.com, charts by TradingView.com, Glassnode.com
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