Bitcoin miners have earned over $2 Billion in revenue since cryptocurrency was first established in 2008, according to a new study published by the Cambridge Centre For Alternative Finance.
What is Bitcoin Mining?
Bitcoin mining refers to the process by which blocks of transactions are created and then appended to the Bitcoin blockchain. Each new block contains a few hundred transactions, where each transaction is a payment from one or more bitcoin address to other address or addresses.
The process of creating blocks is called bitcoin mining because there is a reward associated with each new block that is created and appended to the blockchain. Currently, as of 2017, the reward is 12.5 bitcoins. So anyone who creates a new block, and is able to do it faster than anyone else, will be able to claim this reward of 12.5 bitcoins for each block that they create.
This study, written by Dr. Garrick Hileman and Michel Rauchs, has revealed that the total rewards from bitcoin mining since 2008, when Bitcoin was founded, have been more than $2 Billion. It should be noted that the mining reward per block halves after every 4 years.
It started at 50 Bitcoins per block in 2008, halved to 25 bitcoins per block in 2012, and then was further halved to 12.5 bitcoins per block in 2016. So, in the past, miners were earning more bitcoins for each new block.
However, with the value of Bitcoin touching all-time highs of $1200 per bitcoin, the miners are earning a lot more in dollars at present than they did in the past.
Miners’ Role in Protocol Development
Miners have recently been in the news because there are a number of proposals to change the Bitcoin protocol, and they have an important role to play. Bitcoin Unlimited is one such proposed change, which seeks to modify the Bitcoin protocol and the software that is used to run it.
The Bitcoin Core, or the main Bitcoin software release, has also proposed a new feature called Segregated Witness, or SegWit for short. Miners have a large role to play in selecting which of these competing new features or proposals are implemented.
In this context, the study found that a majority of miners acknowledge their important role in protocol development.
Key highlights of the study include:
- 70% of large miners rate their influence on protocol development as high or very high, compared to 51% of small miners.
- The cryptocurrency mining map shows that publicly known mining facilities are geographically dispersed, but a significant concentration can be observed in certain Chinese provinces.
More Findings From the Study
The study reported a number of other important findings, including an estimate of the total number of bitcoin users in the world. According to this study, there are an estimated 2.9 million to 5.8 million active Bitcoin users worldwide. The majority of these users are located in Europe and North America.
The study also found that 1,876 people are working full time in the cryptocurrency industry. This does not include headcounts from a number of mining companies, so the actual figure may be much larger.
Cambridge Centre For Alternative Finance is affiliated with Cambridge University, United Kingdom. This study by Dr. Garrick Hileman and Michel Rauchs was released a few days ago, under the title of Global Cryptocurrency Benchmarking Study.
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Images courtesy of Cambridge Centre For Alternative Finance, Shutterstock