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 Expenses Methodology

## 1. Overview

Bitcoin expenses represents the total USD value of block subsidies paid to miners each day. This metric measures the daily cost incurred by the Bitcoin network to incentivize miners to secure the blockchain through proof-of-work mining. The calculation takes the block subsidy amount from each Bitcoin block, converts it to USD using daily BTC prices, and aggregates to daily totals.

## 2. Data sources

- **Bitcoin blockchain block data**: Raw Bitcoin block records containing block timestamps, heights, and subsidy amounts paid to miners in satoshis
- **Chainlink BTC/USD price feeds**: Real-time Bitcoin price data from Chainlink oracle feeds for dates after December 10, 2019
- **CoinGecko historical price data**: Daily Bitcoin price data from CoinGecko for historical dates up to December 10, 2019

## 3. Step-by-step calculation

### Component A: Bitcoin block processing
- **Purpose**: Extract and process block subsidy data from Bitcoin blocks
- **Logic**: Retrieve distinct block records from Bitcoin blockchain data, extracting the `timestamp`, `height`, `block_subsidy`, and `total_fee` fields. Convert the `block_subsidy` amount from satoshis to BTC by dividing by 100,000,000 (10^8). Also convert `total_fee` amounts using the same decimal conversion for completeness, though only block subsidies are used in the expenses calculation.
- **Key fields**: `block_timestamp`, `block_number` (height), `block_subsidy_amount` (converted to BTC)

### Component B: Bitcoin price aggregation  
- **Purpose**: Provide continuous daily BTC/USD pricing data
- **Logic**: Combine two price sources to ensure complete historical coverage. For dates after December 10, 2019, use Chainlink price feeds by filtering on the BTC/USD feed address and aggregating hourly prices to daily averages. For dates up to December 10, 2019, use CoinGecko daily market data filtered by Bitcoin's CoinGecko ID. Both sources are truncated to daily boundaries to ensure consistent temporal alignment.
- **Key fields**: `timestamp` (daily), `timestamp_grain`, `price` (USD)

### Component C: Token incentives calculation
- **Purpose**: Calculate the daily USD value of block subsidies paid to miners
- **Logic**: Join the processed block data with daily price data by matching the block timestamp (truncated to day) with the price timestamp. Multiply the `block_subsidy_amount` (in BTC) by the daily `price` (in USD) to get the USD value of each block's subsidy. Sum these USD values by day to get the total daily token incentives. Include metadata fields for market categorization: `market_sector_id` as 'blockchains_l1', `business_segment_id` as 'blockchain', and `chain_id` as 'bitcoin'.
- **Key fields**: `timestamp` (daily), `token_incentives` (USD value)

### Final aggregation
- **Combining components**: The expenses metric directly uses the `token_incentives` value from the token incentives calculation, simply renaming it as `expenses`
- **Currency conversion**: Block subsidies are converted from satoshis to BTC using the standard 8-decimal conversion, then multiplied by daily BTC/USD prices to get USD values
- **Time aggregation**: All data is aggregated to daily boundaries, with block timestamps truncated to day level and matched with daily price data
- **Final calculation**: The final expenses value represents the sum of all block subsidy payments (in USD) for each day, providing a measure of the daily cost the Bitcoin network pays to miners for security

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

Total project operating and incentive expenses.

BitcoinBTC

Expenses

Expenses

Competitive landscape