The past week saw bitcoin (BTC) rise to near-record highs above $1,230, only to fall sharply during Thursday afternoon trading. At the time of writing, one bitcoin was equivalent to $1,174.45, down 3.46 percent from Wednesday’s close and trending downward still.
Bitcoin’s come a long way since its infancy in 2008.
In a nutshell, the way miners generate revenue is by solving cryptographic puzzles attached to blocks of bitcoin transactions (this is also a means to confirm the transactions’ legitimacy). For solving these puzzles, miners gain a payout — which is currently worth 12.5 bitcoin (~$14,681).
That payout halves every 210,000 blocks, or about every four years. This means that, at the current rate of things, miners in 2020 will see that 12.5 BTC cut down to 6.25 BTC.
But who knows what one bitcoin will be worth by then? If the price were to freeze today, that would still leave miners with a cash value of about $7,340.50 per payout. (Conversely, if this halving weren’t in place, miners would still make 50 BTC per block, or about $58,724. Food for thought.)
At the current rate, the report found that bitcoin miners globally have pulled in over $2.07 billion in cumulative revenue from payouts. Given that bitcoin wasn’t even worth over $1 until April 2011, most of this revenue has been generated in just the past few years.
The report indicates the revenue generated by the bitcoin mining sector could actually be significantly higher than that estimate since the researchers didn’t take into account revenue generated from selling mining equipment or cloud mining services.
Notably, more than half (58 percent) of major mining pool operations are located in China, with the U.S. holding some 16 percent and the rest of the world making up 26 percent.
These findings reinforce the notion that the price of bitcoin and its future viability and stability could still largely rely on Chinese trading volume — not to mention Chinese government and regulatory sentiment.
On the latter front, it’s still “wait and see.”
A full month has passed since Chinese bitcoin exchanges were supposedly set to unfreeze digital currency withdrawals as talks reportedly continue with the People’s Bank of China (PBoC).
While service upgrades have been completed, Coin Desk said that exchange officials and the PBoC are still at odds over the know-your-customer rules to be enforced on reopening. Still, the word from exchange officials appears to be optimistic that the parties involved would soon reach a conclusion.
A far speedier conclusion was reached Hong Kong-based bitcoin exchange Bitfinex’s lawsuit against Wells Fargo.
Bitfinex filed suit in the U.S. District Court for the Northern District of California, alleging that Wells suspended outgoing wire transfers to the U.S. from four Taiwan-based banks that service the exchange.
According to Bitfinex, this effectively blocks stateside customers from selling virtual currency holdings. The digital currency exchange is seeking an injunction against Wells Fargo to prevent wire transfer stoppage, along with as much as $75,000 in damages.
The lawsuit stated that Wells Fargo had been made aware that the interruption of the cross-border transfers “presented an existential threat to their businesses.”
On Wednesday (April 12), Bitfinex filed a notice of voluntary dismissal. Bitfinex representative Brandon Carps told CoinDesk that the exchange aims to look past the issue. Additional details will reportedly be released in the near term.
As for the future of bitcoin, one of the world’s largest potential markets for digital currencies is gearing up to make some decisions in the crypto space.
India announced plans to create an interdisciplinary committee of government, economic and other financial regulatory officials to examine the current state of digital currency in India and on a global scale. The goal is to propose new regulations for the nation of 1.2 billion with respect to treatment of digital currencies.
In three months, the committee will submit a report that will “suggest measures for dealing with such virtual currencies including issues relating to consumer protection, money laundering, etc.”
India’s government and banking officials haven’t historically been champions of digital currency, suggesting that the new committee could choose to move in a more stringent direction. However, the nation’s current cash troubles and the recent precedent set by Japan’s legalization of bitcoin as a payment method could at the very least give India’s committee something to talk about.