Is BlockChain Mining Profitable in the Long Run
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.
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Key sustainability issues include the societal and environmental impacts of all crypto commons, including socio-economic inequities.
“Key sustainability issues include the societal and environmental impacts of all crypto commons, including socio-economic inequities (Fridgen et al., 2021; Islam et al., 2023).”
From Sustaining the Crypto Commons: A Configurational Systems Perspective on Blockchain and Cryptocurrency Governance (2024) · cites this paper as Islam et al., 2023
Cites
An Optimized Consortium Blockchain for Medical Information Sharing
Du, M., Chen, Q., Chen, J., & Ma, X. (2021) · IEEE Transactions on Engineering Management · doi:10.1109/tem.2020.2966832 · Cited by 140 · see citing works
Bitcoin mining acceleration and performance quantification
Anish Dev, J. (2014) · 2014 IEEE 27th Canadian Conference on Electrical and Computer Engineering (CCECE) · doi:10.1109/ccece.2014.6900989 · Cited by 79 · see citing works
Economic Issues in Bitcoin Mining and Blockchain Research
Qin, R., Yuan, Y., Wang, S., & Wang, F.-Y. (2018) · 2018 IEEE Intelligent Vehicles Symposium (IV) · doi:10.1109/ivs.2018.8500377 · Cited by 31 · see citing works
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Ciriello, R., Mindel, V., & Mathiassen, L. (2024) · Proceedings of the Annual Hawaii International Conference on System Sciences · doi:10.24251/hicss.2024.607 · Cited by 2 · see citing works
- Authors
- Islam, N., Marinakis, Y., Olson, S., White, R., & Walsh, S.
- Affiliations
- University of Exeter (GB)
- University of New Mexico (US)
- Venue
- IEEE Transactions on Engineering Management
- Published
- 2023-02
- Volume
- 70
- Issue
- 2
- Pages
- 386-399
- ISSN
- 0018-9391 (ISSN-L)
- 1558-0040
- OpenAlex
- W3125736817
- Cited by
- 30
- References
- 3
- Citations by year
- 2026: 2 · 2025: 5 · 2024: 9 · 2023: 4 · 2022: 5 · 2021: 5
- FWCI
- 5.20
- Type
- journal article
- Language
- en
- Open access
- closed
- Licence
- Locations
- IEEE Transactions on Engineering Management (publishedVersion)
- Open Research Exeter (University of Exeter) (acceptedVersion)
- Figshare (submittedVersion)
- Topics
- Physical Sciences › Computer Science › Information Systems › Blockchain Technology Applications and Security
- Social Sciences › Business, Management and Accounting › Management Information Systems › FinTech, Crowdfunding, Digital Finance
- Physical Sciences › Computer Science › Information Systems › Blockchain Technology in Education and Learning
- Keywords
- blockchain mining, cryptocurrency, Ethereum, financial feasibility, profitability, smart contracts, Industry 4.0, technology entrepreneurship, cost analysis
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