Miners process transactions and receive fees from users (supply-side fees).

Bitcoin is a distributed ledger for transfer and store of value (a blockchain). Bitcoin was founded by a pseudonym Satoshi Nakamoto and launched in 2009.

BTC holders own and govern the protocol. They currently do not take a cut of the total transaction fees paid by users (revenue).

github

block explorer

Blockchains (L1)

Bitcoin

# Bitcoin Earnings Methodology

## 1. Overview

Bitcoin earnings represents the net financial result of the Bitcoin protocol, calculated as revenue minus expenses. This metric measures the protocol's profitability from an economic perspective. For Bitcoin, revenue is zero since the protocol doesn't generate income in the traditional sense, while expenses consist entirely of token incentives (block subsidies) paid to miners. The result is always negative, representing the net cost of operating the Bitcoin network through inflationary rewards.

## 2. Data sources

- **Bitcoin blockchain block data**: Raw Bitcoin block information including block subsidies, transaction fees, block timestamps, and block heights
- **End-of-day price feeds**: BTC price data combining Chainlink price feeds for recent data (post-December 2019) and CoinGecko historical prices for earlier periods
- **Block subsidy data**: Native Bitcoin block reward amounts paid to miners, stored in satoshi units

## 3. Step-by-step calculation

### Component A: Block data processing
- **Purpose**: Extract and normalize Bitcoin block subsidy information
- **Logic**: Bitcoin block data is processed to extract block subsidies (rewards paid to miners). Block subsidy amounts are converted from satoshis to BTC by dividing by 10^8. Block timestamps are truncated to day boundaries for daily aggregation. Each block contains fields for `block_subsidy_amount`, `total_fee_amount`, `block_timestamp`, and `block_number`.
- **Key fields**: `block_subsidy_amount` (converted to BTC), `block_timestamp` (truncated to day), `block_number`

### Component B: Price data aggregation  
- **Purpose**: Provide daily BTC prices for USD conversion
- **Logic**: BTC prices are sourced from two feeds - Chainlink price feeds for dates after December 10, 2019, and CoinGecko historical data for earlier periods. Chainlink prices are averaged by day since they update frequently, while CoinGecko provides daily snapshots. Both sources are combined into a single daily price feed covering Bitcoin's entire history.
- **Key fields**: `timestamp` (daily), `price` (USD per BTC), `timestamp_grain` (always 'day')

### Component C: Token incentives calculation (expenses)
- **Purpose**: Calculate daily USD value of block subsidies paid to miners
- **Logic**: Daily block subsidies are calculated by joining Bitcoin block data with price data on matching dates. For each day, all block subsidies are summed and multiplied by the daily BTC price to get USD value. This represents the total amount spent by the protocol on miner incentives. Block timestamps are truncated to day level and joined with corresponding daily prices.
- **Key fields**: `token_incentives` (daily USD amount), `timestamp` (daily), `chain_id` (bitcoin)

### Component D: Revenue calculation
- **Purpose**: Define protocol revenue (set to zero for Bitcoin)
- **Logic**: Bitcoin protocol revenue is hardcoded to zero because Bitcoin doesn't generate revenue in the traditional business sense. The protocol operates as a decentralized network without direct monetization mechanisms. Revenue data maintains the same structure as other metrics but with zero values for all periods.
- **Key fields**: `revenue` (always 0), `timestamp` (daily), `chain_id` (bitcoin)

### Component E: Expenses calculation
- **Purpose**: Aggregate all protocol expenses
- **Logic**: Bitcoin expenses consist entirely of token incentives (block subsidies). The expenses component takes token incentives data directly since there are no other expense categories for Bitcoin. This creates a standardized expenses metric that can be used in the earnings calculation.
- **Key fields**: `expenses` (equals token_incentives), `timestamp` (daily), `chain_id` (bitcoin)

### Final aggregation
- **Combining components**: Earnings are calculated using the formula: earnings = revenue - expenses. Since revenue is always 0 and expenses equal the daily token incentives, the result is always negative, representing the net cost of operating the Bitcoin network.
- **Currency conversion**: All amounts are converted to USD using end-of-day BTC prices, with block subsidies first normalized from satoshis to BTC units
- **Time aggregation**: All data is aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: Daily earnings = 0 (revenue) - token_incentives_USD (expenses), resulting in negative values representing the protocol's net operating cost through inflationary rewards to miners

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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Earnings

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