Bitcoin Mining revenue wins against COVID-19 pandemic

GX Blocks Energy

2020 was characterized by many as a ‘lost’ year, however, the cryptocurrency market and bitcoin mining industry impressively reached new all-time highs!

Did you know that apart from Bitcoin’s price, Bitcoin Mining revenues also hit an all-time high? Let’s take it from the start.

How Bitcoin Mining revenue works

Bitcoin Mining and the resulting revenues fluctuate on a seasonal basis for various reasons affecting the Bitcoin network. For instance, rainy periods such as China’s monsoon season, feed global hydroelectricity supply, resulting in an abundance of cheap renewable energy. These seasonal changes affect the network’s hash rate and subsequent Bitcoin mining block difficulty adjustment.

Decentralization & Globalization of Bitcoin Mining

Based on CoinShares’ Research, it is evident that Bitcoin mining activities are globally located in areas with an abundance of renewable energy sources. Increased decentralization and globalization of Bitcoin mining has been observed, with bitcoin mining activities being largely located in China decreasing from 65% in early 2020 to 50% by the end of the year. Therefore, this leaves room for Bitcoin mining to become stronger in other parts of the world with the US, Russia, and Iceland growing steadily, as Bitcoin miners located there benefit from the abundance of cheap & clean energy. Noteworthy is Kazakhstan’s recent government partnership with miners via a $715 million investment fund.

These international activities nudge towards decentralization of Bitcoin mining, and industry experts have highlighted that factors such as distribution of hash rate and mining are crucial in maintaining secure financial systems that are resistant to censorship.

Bitcoin Mining performance in 2020

So, how did Bitcoin mining perform in 2020? An estimated $692 million in revenue was generated in December of 2020 — an increase of 33% from the previous month, according to CoinDesk. This is impressive considering that November alone had already experienced a 48% increase in Bitcoin miner revenues from previous months. Bitcoin mining revenues are measured by terahash per second (TH/s) and have nearly tripled in the last three months of 2020.

Of the total December bitcoin miner revenue, 10% accounted for Network Fees, at $68.3 million. Since April 2020, a considerable upward trend in bitcoin network fees as a proportion of total mining revenue has been observed. This is crucial in sustaining the Bitcoin network’s security. Benefiting from the revenue increase, Bitcoin miners are activating more miner machines, driving demand higher.

Source: CoinDesk

Bitcoin miners' revenue has continued to grow throughout 2021, driving industry-leading investors and investment banks such as JPMorgan to announce six-digit price predictions for Bitcoin.

Was 2020 a ‘lost’ year?

2020 was characterized by many as a ‘lost’ year, described by a significant economic downturn and discouraged consumer confidence. However, the cryptocurrency market and bitcoin mining industry quickly recovered from a small initial shock, impressively reaching new all-time-high records in all aspects!

The Bitcoin mining industry is bullet-proof against the coronavirus pandemic but also against any pandemic or other external event. This gives us the confidence to continue supporting the future of decentralization, in a world where intermediaries are not required and people have the autonomy to manage their funds freely. The next decade is more than promising for Bitcoin’s mass adoption and we are excited for what’s to come!

GX Blocks Energy

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