Cryptocurrency Miners Exceeded $100 Million In Revenue Mining Empty Bitcoin Blocks
Miners among the most popular Proof-of-Work (PoW) networks have earned around $21 billion since each network started, Bitcoin (BTC) accounting for more than half of the earnings. Each block is currently allowing more transactions to be processed thanks to implementations such as Segregated Witness (SegWit).
Moreover, the number of empty blocks decreased by almost 20% in 2018 compared to 2017. According to a recent report released by Diar, this provides a better idea to why Bitcoin is currently reducing its transaction fees. There are more blocks finding transactions.
Although transaction fees are not really important for miners at the moment, as Bitcoin continues halving, each Satoshi will be worth more.
Bitcoin Cash (BCH), with a lower transaction volume compared to Bitcoin, has found 3335 empty blocks more than BTC since August 2017.
Diar explains hat the value that is being rewarded for empty blocks should strike alarm bells since revenues across major networks allowed miners to earn $335 million for “Proof-of-Nothing.” This is equivalent to $5 million per month.
Litecoin (LTC) has been the network with the most miners solving empty blocks earning $125 million. Ethereum (ETH) follows Litecoin with miners earning $113 million. Bitcoin is in the third position with $100 million.
The report explains about Ethereum:
“Ethereum miners earned over $67 million for empty block in 2017 – by far the greatest reward for a full year across all blockchains. But Ethereum has made the most progress with 95% drop in empty blocks mined in 2018 versus 2017.”
This is a very inefficient part of the Proof-of-Work blockchain networks that reward miners for literally nothing. With an increasing number of transactions could solve this issue in the future. Moreover, as block rewards continue to drop, miners might experience reduced earnings from mining empty blocks. Transactions are going to play an important role in the future of the space.
Ethereum is also going to be moving towards a Proof-of-Stake (PoS) network in the future. That means that the empty blocks issue might be solved as well.
Litecoin will have to deal with a decrease in the fees paid to process transactions. In the future, with a smaller reward for miners, Litecoin’s fees would have to increase substantially to allow miners to remain competitive.