Bitcoin Miners Rake In $2B+

Bitcoin’s come a long way since its inception way back in 2008. According to a recent report published by the Cambridge Centre for Alternative Finance, being a bitcoin miner has become incredibly lucrative since the cryptocurrency’s early days.

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 (~$15,225.00).

Combined, the report found that bitcoin miners globally have pulled in over $2.07 billion in cumulative revenue. Given that bitcoin wasn’t even worth over $1 until April of 2011, most of this revenue has been generated in just the past few years.

The report indicates that revenue generated by the bitcoin mining sector could even be higher, since it didn’t include revenue 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, its future viability and stability, largely rely on Chinese trading volume as well as Chinese government sentiment.

As of late, bitcoin traders have worried that the bitcoin network could split into two competing digital currencies. The issue stems from a long-existing debate in the bitcoin community over block size, which effectively caps the amount of data that can be included in bitcoin transactions. This limits how many bitcoin can be produced and thus how many transactions the system can handle.

As interest in bitcoin, trading volume and size of transactions have grown, bitcoin’s block size has slowed payment processing and transaction backlogs. In the past six months alone, the reported number of backlogged transactions has tripled.