The Bitcoin Miners' Profit Debate: Security Is High, But How Much Has Their Income Dropped?

Looking at the current state of the Bitcoin network, one notable contradiction stands out. On one hand, the blockchain protocol now has the highest computational power in its history, strengthening network security. However, at the same time, each miner’s revenue per hash is rapidly declining.

**What is miners' income? To explain this question, a few seconds of consideration are needed.**

The main issue in Bitcoin mining today is as follows: the reward for computational power, (profit), comes from two sources — block rewards and transaction fees. But today, the block reward is decreasing, and transaction fees are variable. As a result, the question "what is income for miners" shifts to: not just energy costs, but the entire business is slowing down.

The numerical situation can be summarized as: in November, the cost of computational power, (power price), dropped by 50% in recent weeks, with the historical record for $/PB/s starting at $34.20. Consequently, on November 27, Bitcoin mining difficulty at block height 925344 decreased by 2%, with an overall level of 149.30 trillion. Despite the block interval being close to 10 minutes, this did not make the job easier for miners.

**Unacceptable Situation for Small Miners**

This profit disparity is creating a sharp twofold divide among major miners. Small and medium operators who cannot afford cheap energy are quickly leaving the market. Meanwhile, large mining companies with long-term power purchase agreements and centralized operations located in remote water-rich areas are continuing to develop steadily.

Even the stablecoin empire like Tether has temporarily halted its Uruguay mining project due to energy costs and customs duty uncertainties. This situation indicates that small miners are under pressure.

**Centralized Network Risks**

At first glance, the number of computational power units seems to have increased, but in reality, this is a result of industry consolidation. The number of real entities is sharply decreasing, which poses a threat to network security. Extreme weather events, restrictions on the electrical grid, and similar incidents could lead to chain failures.

**Capital Market Response**

Mining companies listed on exchanges experienced consistent losses in November. Their total market capitalization fell from $87 billion to $55 billion, with a subsequent recovery to $65 billion. Investors now see these companies not as "Bitcoin replacements," but as high-tech centers with additional divisions.

**Possible Directions**

To hide their activities, mining companies are exploring new paths:

- Entering into long-term power purchase agreements
- Moving to regions with cheaper energy
- Transitioning to AI and high-performance computing (HPC) services
- Creating additional revenue streams

**Signs to Watch**

Three indicators should be monitored to assess changes in the industry:

First, a sharp decline in mining difficulty — indicating high-cost equipment is leaving the market, and a rebound would mean idle capacity is being reactivated.

Second, an increase in transaction fees — if the mempool becomes congested, revenue could improve in the short term.

Third, political signals — changes in export controls and electrical grid regulations could instantly disrupt cost structures.

To resolve the imbalance between network security and miners' income, the industry must quickly transition to an interconnected economic model. Without new revenue sources, supporting small miners and mitigating the risks of centralization will be impossible.