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.
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.
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.
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.