Rewards in mining decreasing: lower earnings after Bitcoin halving at block 840,000

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Earnings in Bitcoin mining have recently dropped below pre-halving levels, while network fees have plummeted.

After a period of particularly high fees, the costs for onchain transactions on the Bitcoin network have drastically reduced. On Friday, fees reached a peak of $240 per transaction, but now they have dropped to just $11.06 each. 

When reaching block height 840,179, miners are receiving less Bitcoin as a reward compared to what they were earning before the halving at block 840,000. Let’s see all the details below. 

Bitcoin: decrease in mining rewards after the halving

As anticipated, right after the Bitcoin halving, the average fee for onchain transactions skyrocketed to over $240 each around 9:00 PM EDT on Friday. 

However, by 8:00 AM EDT on Sunday, the cost of a high priority transaction had dropped to 121 satoshis per virtual byte (sat/vB), about $11 per transfer. In the meantime, the price of Bitcoin reached $65,300 at the same time.

In the first moments following block 840,000, Bitcoin miners earned huge fees, securing nine out of the ten highest ever recorded in BTC blockchain history.

In the first 93 post-halving blocks, they have collected a total of 1,087.99 Bitcoin just from fees. However, by 8:00 on Sunday, this trend of high earnings seemed to have come to an end. 

Indeed, after block 840,179, the reward in BTC for miners started to decrease.

The collapse of Bitcoin’s hashprice

The hashprice of Bitcoin, which represents the value of 1 petahash per second (PH/s) of daily hashrate, dropped from $183 per PH/s on April 20 to $114 per PH/s at 7 am on Sunday, April 21. 

Before the halving, block rewards consisted of 6.25 BTC plus transaction fees, with an average of about 6.776 BTC between blocks 839,848 and 839,900. 

Now, after block 840,179, the average has dropped to about 5.105 BTC per block due to the reduction in fees.

Bitcoin miners had a brief period of high earnings: between block 840,000 and block 840,179, the average rewards were 12.867 BTC per block, much higher than the periods before the halving. 

However, the influence of the Runes protocol seems to have decreased on Sundays, with on-chain transactions now mainly involving financial exchanges.

This change is due to the fact that the fees have become lower compared to the previous peak caused by the use of the OP_RETURN function.

The impact of halving on miners and future prospects

According to some analysts, Bitcoin’s halving could have a negative impact on the companies that keep the BTC network running securely. Despite this, the price of Bitcoin has remained relatively stable at $64,000.

Kok Kee Chong, CEO of AsiaNext, a digital asset trading platform for institutional investors based in Singapore, commented on the event. In particular, he said that the event was already discounted and the price movement was limited. 

He also added that now the sector will have to wait to see if institutional interest will lead to a rally in the coming weeks.

In the short term, however, the bullish sentiment on Bitcoin could weaken due to macroeconomic factors. Among these, the decision of the FED to suspend interest rate cuts and conflicts in the Middle East. 

Edward Chin, co-founder of Parataxis Capital, noted that there may be a downturn in the next quarter until there is greater clarity on the macroeconomic front. 

He also emphasized that the main driver of the price of Bitcoin will likely be the flow of ETF funds.