Bitcoin mining profit defense battle: hash rate, cost structure, and survival challenges under "geopolitics"

As Bitcoin (Bitcoin) rewards halve and global uncertainties intensify, Bitcoin miners are facing a severe test of profitability. Currently, block subsidies remain at only 3.125 BTC, with transaction fees becoming the primary revenue driver for maintaining network security. Although the total network hashrate (hashrate) stays at a relatively high level around 1.12 ZH/s, the decline in hashprice (hashprice) and rigid energy costs are forcing miners to diversify into AI hosting, energy arbitrage, and other businesses to sustain operations. Market focus shifts to: how will operational expenditure (OPEX) boundaries and attack cost thresholds evolve amid ongoing fee structure instability?

Reshaping Miner Revenue Structure: Increasing Fee Dependence

Since the April halving, Bitcoin block subsidy income has dropped significantly, making transaction fees a key factor in the network’s security budget.

• Current Revenue Composition: Based on the current spot price of approximately $101,000, miners earned about 453 BTC over the past 144 blocks, with a nominal value of around $45.3 million. Of this, the average fee per block was about 0.021 BTC, accounting for only a small portion of total revenue.
• Hashprice Pressure: Luxor’s forward curve forecasts that in October, hashprice will be about $43.34 per PH/day, down from $47.25 at the end of September, reflecting market expectations of relatively conservative mining returns in the near term.

Fee volatility is a core issue. After a peak in April driven by the launch of the Runes protocol, summer baseline fees declined. Galaxy Research noted in August that on-chain fees had fallen near historical lows, indicating that fee markets are far from robust. Some mining pools even included transactions paying less than 1 sat/vByte in blocks, showing that actual fee floors could collapse during quiet periods.

Rigid Operating Costs: Energy Expenditures and Survival Margins

Energy costs constitute a core fixed expense for miners, making them extremely vulnerable during periods of unstable fee income.

• Energy Costs: Using mainstream models like the Bitmain S21 (efficiency around 17.5 J/TH), and assuming U.S. electricity rates of 5 to 7 cents per kWh, the electricity expense per PH/day is roughly $21 to $30.
• Profit Margin: Given the forward-looking hashprice of around $43, miners’ gross electricity profit margins are relatively limited, not including operational and capital expenditures. This means only miners with moderate fee income increases can continue operating on the edge.

Attack Cost Boundaries: The Economics of Network Security

Changes in miner revenue directly impact the cost of executing a 51% attack, i.e., the network security budget. Analysts evaluate this cost through upper and lower bounds:

1. Based on OPEX lower bound: Assuming an attacker uses S21 efficiency equipment and controls 51% of current hashpower (~1.13 ZH/s), the power consumption would exceed 10.1 GW, with hourly costs around $0.50 to $0.71 million. While unrealistic as a practical scenario, it provides a useful magnitude reference.
2. Based on capital upper bound: Controlling 51% of hashpower with approximately 2.88 million S21 miners would require hardware costs of about $7.1 billion, representing the actual capital threshold needed.

Sustained high transaction fees can boost miner revenues, increase network difficulty, and balance hashpower, thereby raising attack OPEX and capital thresholds.

Technological Improvements and Protocol Policies: Can Fee Floors Be Solidified?

While demand itself cannot be altered through technology, protocol upgrades aim to make fee increases more reliable, providing a lower-bound support for income.

• Bitcoin Core v28: Introduces “one parent transaction per child transaction” package relay, allowing nodes to relay low-fee parent transactions with child transactions paying additional fees (CPFP), reducing the risk of transactions getting stuck.
• RBF and UTXO Management: Enhanced via v3 policies and TRUC sets, supporting Replace-by-Fee (RBF), crucial for Lightning Network channels and exchange batching, making fee adjustments more predictable.

These tools aim to make fee increases more dependable and, after L2 and exchange standardization, could establish a baseline fee floor.

Conclusion

Bitcoin mining is undergoing a structural stress test post-halving, with insufficient fee revenue and rigid energy costs raising questions about what will break first: miners’ survival will, user tolerance, or commitment to decentralization? Protocol-level technical improvements provide tools to enhance fee reliability, but whether they translate into sustainable “security budgets” depends on on-chain activity growth in the coming quarters. Miners’ diversification efforts and technological upgrades are key variables determining the future security foundation of the Bitcoin network.