Is BlockChain Mining Profitable in the Long Run?

【Author】 Islam, Nazrul; Marinakis, Yorgos; Olson, Sterling; White, Reilly; Walsh, Steven

【Source】IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT

【影响因子】8.702

【Abstract】Blockchain technologies are at the heart of digital innovation and are a harbinger of Industry 4.0. Consequently, popular press and academic researchers alike have focused on its importance. Yet blockchain technologies' most promising efforts, cryptocurrency and smart contracts, are underpinned by blockchain mining. The blockchain mining service is undergoing change, cryptocurrencies like Ethereum and others are nearing the end of their minting. Smart contracts are in their infancy. The financial impetus for providing the mining service has changed. Here, we add to the literature through a deep financial analysis of blockchain mining regarding its long-term financial viability. Our methods include a financial cost analysis and an analysis of the financial viability of cryptocurrency through focus on Ethereum. It is found that blockchain miners, despite initial profitability, cannot maintain sustainable financial viability without substantial fees. This article is important to those academics who focus on understanding how service technologies and products underpin Industry 4.0. Finally, this article contributes to the practitioners' decision-making process to embrace blockchain mining as a technological entrepreneur.

【Keywords】Blockchain; Smart contracts; Bitcoin; Economics; Graphics processing units; Technological innovation; Instruments; Blockchain mining; cryptocurrency; ethereum; Industry 4; 0; smart contract; technological entrepreneurship

【发表时间】2021

【收录时间】2022-01-02

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