Miners Are Producing More Bitcoin (BTC) Than Expected Since 2019
- 763,688 BTC have been mined instead of the predicted 739,800 BTC
- This is because of “all of the hash coming on during the bull run”
Only 84 days are left for the third bitcoin reward halving, scheduled in May 2020. After this event, the mining rewards will get reduced to 6.25 bitcoins per block resulting in 900 new bitcoins mined per day.
Currently, 144 blocks are mined per day on an average in the Bitcoin network, with 12.5 bitcoin as the rewards corresponding to each block. This results in 1,800 new bitcoins to be mined per day. As such, Bitcoin blocks are mined on an average of every 10 minutes.
However, the actual figures are much higher.
Starting in 2019, more than 1,800 bitcoins are mined each month than predicted. The total BTC predicted to be mined is 739,800 BTC however, the actual figure is 3.2% higher at 763,688 BTC.
This is because of the ever-increasing hash rate. On Jan. 17, the hash rate of the network made its all-time high at 126.1 Th/s. Also since Jan. 14., hash rate hasn’t dropped below 100 Th/s.
This fast pacing of hash rate in 2019 and now 2020 has the bitcoin blocks mined much faster.
However, in 2018 as well, blocks were mined much faster than predicted at the beginning of the year due to “all of the hash coming on during the bull run,” noted analyst Ceteris Paribus.
Hash rate has always been on the increase but during 4Q18, it took a drop of nearly 40% and bottomed in Dec. 2018 just like the price. Ever since then, we have been back to making new highs.
During the time when price and hash rate both tanked in late 2018, blocks being mined also “slowed considerably.”
This is expected as with so much hash rates added, difficulty can’t keep up and blocks are mined much faster and producing more bitcoins and more rewards for miners.
For miners, it is an opportunity to rake in 12.5 BTC for each block mined which will be cut down to half in May 2020.
But as we reported, the upcoming halving will result in doubling the cost of mining bitcoin. Currently, the average cost of mining one BTC is $6,851, which could about double to $12,525 after the halving assuming the hash rate stays at its current level. The analysis also assumes electricity price at 6 cents, which is higher than the 2 cents it costs big crypto mining firms.
This estimated cost is above the current market price of $9,800 and if BTC price doesn’t rise, it will turn mining bitcoin into a loss. In that case, while some miners will still be profitable, a lot of miners will operate at a loss and will shut down their rigs.