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Bitcoin Mining Pools Pocket in Multimillions While Many Cloud Mining Products Lose Money

Bitcoin mining pools earned an average of over $4.28 million from bitcoin transaction fees in 2019, with BTC.com making the most of more than $26.22 million, according to a report by Chinese crypto media outlet PANews.

The report pointed out that seven major bitcoin mining pools including BTC.com, F2Pool, AntPool, Poolin, SlushPool, ViaBTC and BTC.Top all have earned over $10 million in bitcoin transaction fees.

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Under the scale effect of bitcoin mining pools, the transaction fee gap between large and small mining pools is relatively large, with 10 mining pools having a fee income of less than $100,000. These mining pools are facing greater survival pressure.

Apart from transaction fees, block rewards are also a big part of the revenue for bitcoin mining pools. Based on the typical 3% charge in the FPPS model, BTC.com, for example, is estimated to make a total revenue of about $26.49 million. F2Pool’s estimated revenue also exceeded $20 million. In addition, Poolin, AntPool, SlushPool, ViaBTC, and BTC.Top all have estimated annual revenues of more than $10 million.

According to the report, the averaged empty block rate of all the mining pools stands at 0.55%, which is lower than that of the whole bitcoin network at 0.58%. Among them, SecretSuperstar produces the highest empty block rate of 9.09%, Hummerpool, Bixin, BTC.com, AntPool, Huobi.Pool and BytePool are also above the average.

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The report also noted that cloud mining is a high-risk speculative investment, as most bitcoin cloud mining products it analyzed didn’t make much in 2019, some even lose money as a result of their high cost.

The average electricity rates of the 28 products it analyzed reached $0.0759/T (about 0.5228 yuan/T), which is much higher than the range of 0.3 yuan/T – 0.5 yuan/T that a mining pool could get. Under such a context, the average earning of the 28 products, excluding management fees, is only $0.0155/T.

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As previous reports estimated that bitcoin miners made $5 billion in revenue during 2019, and the figure represents a decline from 2018’s $5.26 billion. The Bitcoin network rewards miners for successfully adding blocks to its blockchain with 12.5 BTC ($73.6K). In less than 120 days, that amount will halve to just 6.25 BTC. Bitcoin miners’ revenue in 2020 after the halving event is worth to be seen.

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