The lower rate of the Bitcoin creation means network takes less energy. The BTC network underwent an increasing change as number of the new Bitcoin’s formed in every block fell down by half. It is as per the schedule established by the Bitcoin creator Satoshi Nakamoto around 12 years before. Previously, every block in blockchain came with over 12.5 new BTC worth $110,000. Now every block includes just 6.25 new BTC Price worth over $55,000.

That is one big challenge for Bitcoin mining industry that derives lion’s share of the income from such block rewards. However, it has the good side effect for everybody else: BTC network is energy consumption is possible to fall in coming months as the lower profits from BTC mining force the miners to stay cautious.

Lower revenues may mean lower consumption

For constructing one block, the miners make the list of transactions that are submitted as the earlier block was formed. They race against each other, and performing millions and trillions of SHA256 hash computations each second, and looking for the block that makes the hash below the arbitrarily low value.

Winner gets a block reward (earlier 12.5 Bitcoin’s and now 6.25 Bitcoin’s) and any transaction fees, which are included in the individual transactions. At present, transaction fees are totally worth less than value of a block reward—over 0.6 BTC, or $5,000, each block. Thus, halving of a block reward means miners’ income has fell down almost half overnight.

This sudden decline in rewards for the mining means that mining is not much profitable. Barring the big increase in the BTC price, we will expect the Bitcoin miners to stop investing in the new mining hardware for next some months. Suppose Bitcoin mining gets unprofitable, some miners may switch off to not much efficient hardware as it is not generating enough of BTC to cover the operating costs.