Noti Hash: Bitcoin miners resist the onslaught of low profitability

"Underwater" Miners: How Does Liquid Cooling Help Bitcoin Mining?

Key facts:
  • The high volume of transactions resulting from the panic in the markets congested the network.

  • Currently the profitability of miners is not very high, but there is hope.

Noti Hash is CriptoNoticias’ Bitcoin mining newsletter. It is published on our website every two weeks, being today, Thursday, May 19, 2022, the 20th edition to be published, at block 737,045.

The various perspectives from which Bitcoin mining can be approached as a business allows this industry to continue to function in periods of low profitability.

This was what we saw in recent weeks, where the drop in the price of bitcoin (BTC) affected the profitability of miners, without this representing an inconvenience. On the contrary, more miners are joining the network, increasing their processing power (or hash rate) and its mining difficulty.

According to the firm Compass Mining, the income of miners denominated in fiat (dollars), fell 4% in April compared to last month, CriptoNoticias reported, all this while increasing the hashrate and difficulty.

However, miners have historically shown that they are rowing against the tide, as Despite the momentary low profitability, this industry continues to grow, according to other data reviewed by this medium.

In the last 3 months, the hashrate price (hashprice) has fallen to 12 cents on the dollar. The hashrate price is the market value of the processing power of Bitcoin miners, it represents an estimate of the profit obtained for each TH/s invested in the network each day.


Noti Hash: Bitcoin miners resist the onslaught of low profitability

Due to the drop in the price of BTC, a Bitcoin miner earns the same today as at the end of the year 2020, we report.

graph shows drop in hashprice value
The value of the hashrate has decreased substantially in recent months. Source: Luxor Mining

Now, while profitability in fiat has dropped substantially, we also report that Bitcoin miners in the US multiplied their BTC production six times during the last year, which undoubtedly leaves them in an advantageous position in a long-term strategy.

Likewise, in CriptoNoticias we review how liquid immersion cooling can be of great help so that miners have greater profitability both in fiat terms and in their BTC reserves.

The Bitcoin mempool is flooded with thousands of transactions

In recent weeks, since the previous issue of Noti Hash, CriptoNoticias’ Bitcoin mining newsletter, the network has been saturated with transactions, driving up commissions a bit and causing a certain level of delays.

Thousands of transactions filled the Bitcoin mempool, the memory space where Bitcoin nodes store transactions waiting to be confirmed by miners.

bitcoin mempool flood
In the past there have been periods of congestion in the Bitcoin network that have not been repeated. Source: OFC Pictures/

However, commissions remained at prices below 1 dollar, on average, demonstrating the maturity of Bitcoin users in not setting up their wallets to pay outrageous fees.

For the day May 17 the mempool was practically clear, we reported, and commissions again averaged 1 satoshi per byte. The increase in transaction volume may have been related to the turbulent cryptocurrency market and fund consolidation events by major exchanges like Binance.

graph shows increase and decrease of congestion in the bitcoin network
The Bitcoin mempool was congested until May 17. Source: Memopool.Space

Regulatory Scenario Favors or Contradicts Bitcoin Miners

The latest regulatory news affecting Bitcoin miners has been mixed in nature.

On the one hand, we have to Russia is singling out Bitcoin miners for overloading the power grid in some regions, so it is considering limiting their consumption and also making them pay more for the service.

On the other hand, in Kazakhstan, miners will have to follow stricter rules to carry out its operations, despite the fact that a good percentage of the hashrate was concentrated in this country until last year.

Traveling to South America, in Brazil the miners will not have to pay taxes to import their equipment, which, it is worth noting, have dropped in price with the decline in the BTC market. This could be an opportunity for the mining industry to flourish in that country, about which no major news has been received so far.

The fact is that Bitcoin mining will always find spaces, even if they ban it. Such is the case in China, where we report a rise in the number of miners who are operating underground, risking heavy penalties if caught.

increase in bitcoin hashrate according to countries
Evolution of the Bitcoin hashrate by country since September 2019 Source: Cambridge Bitcoin Electricity Consumption Index.

Despite the restrictive and unprofitable scenarios, there is hope for Bitcoin miners even after they are deprecated. In CriptoNoticias we also recently talked with the artist Juls Garzón about the collection of intervened miners that she launched and quickly sold, as a tribute or homage to the work contributed for the well-being of Bitcoin.

Mining from other networks:

Picture of the Week

Laszlo Hanyecz is best known for having bought 2 pizzas for 10,000 BTC on May 22, 2010, date from which is celebrated every year the Bitcoin Pizza Day, Which will be this coming Sunday.

Noti Hash: Bitcoin miners resist the onslaught of low profitability

However, Hanyecz also has the merit of being one of the first Bitcoin miners in history and, in addition, of being one of the first people to implement graphics processing cards (GPUs) to mine Bitcoinwhen the difficulty of the network was really low.

Previous editions of Noti Hash

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