Study: Bitcoin Mining Has Fallen, Despite Record Revenue of $4.7 Billion

Study: Bitcoin Mining Has Fallen, Despite Record Revenue of $4.7 Billion

Revenue of bitcoin miners for the first six months of 2018 amounted to a record of $4.7 billion, however, the constantly growing competition and increasing complexity of calculations make the first cryptocurrency less profitable and put the small players in losing position. This is stated in the new study of the analytical company Diar.

It is noteworthy that these figures for the first half of 2018 are larger by $1.4 billion more than in all of 2017, while the miners themselves earn about 54,000 BTC per month.

Despite this, analysts say that those who are forced to pay for electricity at retail prices, in September for the first time in recent years, went into the negative.

At the moment, one of the few countries where the cost of electricity still gives a certain commercial sense for mining Bitcoin, remains China with an average price of about $0.08 per kWh. However, at the current rate of Bitcoin, which remains at about the same level as most of 2018, the cost of equipment, staff salaries, and other expenses make Bitcoin mining almost unprofitable for small enterprises.

According to Diar, only large pools, controlled by the Chinese manufacturer of mining equipment Bitmain, can still make money on bitcoin mining. However, according to Bitmain’s own data, 95% of the company’s revenues are accounted for by sales of equipment, and not by its own production of cryptocurrency.

Moreover, in order to reduce electricity costs and preserve the profitability of its farm, Bitmain will be forced to distribute its computing power between different countries. In particular, in the first quarter of 2019, the company plans to open three new data centers in the United States.

“With big mining operations on low electricity costs running at anywhere between 50-60% gross profit from Bitcoin revenues, the market has a lot of room left to grow and, profits to squeeze. But Bitcoin mining has, at least for now, and most likely in the future, moved into the court of bigger players with deep pockets,” the researchers conclude.

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