Mining revenue from Bitcoin continued to fall, declining by 21.6% in May, even as Ethereum’s ether recovered from a mishap at the beginning of the month to become a more profitable proposition for miners.
Revenue from bitcoin mining operations has been in a free fall since last October. The development is not surprising considering that the difficulty of solving bitcoin’s mining puzzle has climbed since last year. On the other hand, the hash rate or total computing power devoted to the bitcoin network has declined from May onwards, meaning fewer miners are using their systems to mine the cryptocurrency.
They may have switched to mining Ethereum’s ether.
The Block writes that Ethereum’s miners made 1.08 times more revenue than Bitcoin miners in May. After spiking at the beginning of May, around the time that the Otherdeed fiasco occurred, gas prices on the Ethereum blockchain have trended downwards. Declining gas fees translate to lower transaction costs for developers and more fees for miners. [For context, Ethereum’s native token ether’s price has fallen by roughly 51% as compared to Bitcoin’s 37% decline since the beginning of this year].
The news also confirms that bitcoin’s claim to being a medium for daily transactions, or for that matter for global transfers and remittances, is hokum. Revenue for miners comes from two sources: block rewards and transaction fees. Out of the total $906.2 million revenue that bitcoin miners earned in May, fees from transactions on Bitcoin’s blockchain accounted for only about $16.18 million or 1.87% of the total figure. The remaining came from block rewards.