What's Lifetime Profit Of Bitcoin Miners?

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Data from the on-chain analytics firm Glassnode has revealed the all-time-aggregate profit margin for the Bitcoin miners; here’s what it is.

Bitcoin Miners Have Made A Profit Of 37% On Their Total Investment

In a recent tweet, Glassnode posted the latest data on where the miners currently stand regarding their revenue, cost, and profit. First, to calculate the revenue of these chain validators, the analytics firm has taken the sum of the “thermocap” and the transaction fees that this cohort has earned throughout their 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 the block rewards that the miners have earned over the network’s lifetime.

To find the costs incurred by this group, Glassnode has used its “difficulty regression model.” This is a model for finding the cost of production for Bitcoin, and it’s based on the “mining difficulty.”

The mining difficulty is a feature of the BTC blockchain that controls how hard 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 connected by the miners (the “hashrate“) changes, their ability to mine naturally changes with it. For example, miners can perform their tasks faster if they connect more machines to the network.

However, as already mentioned, the network doesn’t want miners to become faster (or slower) than the standard rate, so it adjusts the difficulty to neutralize this change. In the case of this example, the chain’s difficulty would go up in response, thus slowing down the miners back to the desired speed.

The difficulty regression model assumes that the difficulty encapsulates all the costs miners have to pay, as it is directly related to the amount of computing power these validators have connected to the network.

Now, here is a chart that shows what the cumulative miner revenue and cumulative production cost of the Bitcoin miners look like right now:

The costs, revenues, and the profits of the miners | Source: Glassnode on Twitter

As displayed in the above graph, the Bitcoin miners have raked in lifetime revenues of about $50.2 billion, while their cumulative production cost is around $36.6 billion.

The revenues have been higher than the costs for this group, meaning that the BTC miners have made some gains. In numbers, the miners have made all-time aggregate profits of $13.6 billion. This figure represents a gain of 37% on the investments of these chain validators.