US$1 billion: Bitcoin miners experience new year boom
Most Bitcoin miners should have started 2021 more than happy, given the high turnover figures. But they can’t benefit from the upswing everywhere.
The mining industry is booming. This is shown by figures from “The Block”. According to them, bitcoin miners recorded a total turnover of about 1.12 billion US dollars in January of this year. This year’s revenue thus even exceeds that of January 2018 (1.02 billion US dollars) and ranks just behind the record revenue from December 2017 (1.25 billion US dollars).
What is interesting here is that the share of so-called “block subsidy” has increased enormously from the comparative figures from January 2018 (USD 814.73 million) and December 2017 (USD 954.38 million). Thus, the share of “pure” Bitcoin mined now breaks of Immediate Edge through the billion mark for the first time. Although the revenue from transaction fees increased compared to the previous months, the share from January 2021 remained relatively low in relation to the previous record months. In December 2017, for example, transactions accounted for a share of 296.36 million US dollars of the total turnover of bitcoin miners. Already in January 2018, this ratio decreased to 204.25 million US dollars. Three years later, this ratio now stands at 116.07 million US dollars.
Miner pays subsidy to bitcoin miners
Meanwhile, miners are also subsidising developers working on improvements to the Bitcoin network. For example, Swiss bitcoin maintainer Jonas Schnelli recently received a US$96,000 grant from Nasdaq miner Marathon Patent Group. Commenting on the payment, Schnelli said:
It’s an acceptable salary. However, much less than I could get as a software developer in a company. But I’m in it for the Bitcoin ethos, not the money.
Jonas Schnelli to The Block
Schnelli said he wants to use the money to continue implementing improvements to the Bitcoin network.
Iran shuts down crypto farms
Meanwhile, the crypto year 2021 is off to a disastrous start for most private miners in Iran, as the mullah state is currently cracking down on crypto miners. The Gulf state is currently suffering from recurring power outages. The Islamic Republic blames illegal miners who use too much electricity and thus overload the network. Iran is thus returning to conditions as they were in 2019. The country unceremoniously banned the mining of Bitcoin and other cryptocurrencies because they also used too much energy.
After the US and EU imposed renewed sanctions on Iran in 2020, the government in Tehran legalised bitcoin mining again, but only for licensed operators. With this method, the Iranian regime tried to circumvent the sanctions. With the help of a government subsidy programme for electricity prices, it became a popular mining location. According to the University of Cambridge, Iran currently occupies sixth place in the international mining ranking.
Now Iranian law enforcement authorities appear to be cracking down even harder on illegal miners. According to the Associated Press, Iranian police have shut down around 1,600 mining farms in the country. Iran’s Tasnim News Agency reports that some 45,000 mining computers were seized in the raids.
In the process, critics accuse Iran of distracting from a fundamental structural problem. Foremost among them is Iranian academic and former politician Kaveh Madani. He said that Bitcoin had been an easy victim and that “years of mismanagement” were responsible for the current situation.