- ETH miners earned record revenues in May, beating BTC miners for first place.
- Reasons for this may be ETH highs in May and Ethereum’s high transaction fees.
- PoS will eliminate mining altogether, so this may not be a lasting trend.
May, the month of miracles and market crashes, saw Ethereum miners take in record revenues, earning more than Bitcoin miners for the second time in the last year.
May’s monthly mining revenue amounted to $2.35 billion on the Ethereum Blockchain, as per statistics given by Coin Metrics. This, compared to Bitcoin’s $1.45 billion, is a huge jump. Earlier when Ethereum beat Bitcoin revenues, in February 2021, the difference was a narrow 10 million.
Is this hinting towards a shifting trade trend? At this point, we can’t be too sure.
Normally, two things make up mining revenue; block rewards and transaction fees. Every time someone mines a new block of transactions and adds it to the chain, they are given a set number of new tokens. For Bitcoin, miners earn 6.25 BTC (worth $227,000) per 10 minutes, and for Ethereum, they get two ETH ($5,100) every 13 seconds. Along with this, miners also receive the transaction fees within that block.
One reason for Ethereum’s May win is a byproduct of ETH’s price itself, which hit a high $4,164 on May 10th. Along with this, its high transaction fees play a huge role. With the boom in DeFi applications and NFTs, the Ethereum network has become very congested. The busier the network becomes, the more developers compete for getting a transaction through. Transaction fees, which adjust according to supply and demand, have consequently become very high. In fact, over $1 billion of ETH miners’ revenue last month came from fees alone, compared to BTC’s 130 million.
These high fees are constantly cited as a disadvantage of using the Ethereum network for building DApps. Although the network plans to shift to proof-of-stake, which will eradicate many of the high-fee-related concerns, the transition may be a lengthy process. The proof-of-stake consensus system, however, aims to eliminate the need for mining altogether. Ethereum miners better keep their expectations aligned with what’s coming.