Cryptocurrency Miners Have Made Over $330 Million Mining Empty Blocks

Cryptocurrency miners have, across the most popular proof-of-work (PoW) blockchains, made over $300 million mining empty blocks, not securing their network. The problem has been slowly decreasing, however.

According to blockchain research firm Diar, revenues coming from empty blocks were a “negligible portion of total revenues,” but have surpassed the $300 million mark.  In total, miners have made over $21 billion since the start of each blockchain, with Bitcoin accounting for over half of that amount.

The report reads:

Despite a year-on-year decline in the number of empty blocks being solved for Bitcoin, miners have now exceeded $100Mn in revenue since 2012 providing no real value to the network

Per Diar’s report, the number of empty blocks being mined across the cryptocurrency space has halved since 2016, and dropped by almost 20% last year, compared to 2017. In total, Litecoin has rewarded miners with $125 million for solving empty blocks, while Ethereum rewarded them with $113 million, and Bitcoin with little over $100 million.

Ethereum miners, the report adds, earned over $67 million from empty blocks in 2017, when the prices of most cryptocurrencies surged to new all-time highs. This, per Diar, is “by far the greatest reward for a full year across all blockchains.” Since then, ETH has seen a 95% drop in empty blocks mined.

Mining less empty blocks has been helping the Bitcoin network’s fees get lower, as “more blocks are finding transactions.” Compared to Bitcoin, BCH has seen an additional 3,335 empty blocks since August of 2017 – when it forked off the Bitcoin blockchain – despite having less transaction volume.

The report adds the figures should be alarming, as miners have essentially been earning the equivalent of $5 million per month for doing nothing.

The value that is being rewarded for empty blocks should strike alarm bells as revenues across major networks have earned miners for Proof-of-Nothing with $335Mn - the equivalent of $5Mn per month.

PoW-based blockchains reward miners with a specific amount of cryptocurrency per mined block, along with the fees from the transactions included in said block. Diar notes that while the fees today are a small incentive for miners, as rewards drop because of halving events, they will matter in the future.

Fees on the Bitcoin blockchain notably hit an all-time high in December of 2017, when BTC itself got close to the $20,000 mark. Since then, they’ve been dropping because of a decrease in empty blocks, SegWit adoption, transaction batching, and increased Lightning Network adoption.

Justin Sun Congratulates CZ on Binance Coin (BNB) Price Setting a New All-Time High

On Saturday (April 20), Justin Sun, the Founder and CEO of TRON Foundation congratulated Changpeng Zhao (aka "CZ"), the CEO of Binance, and the rest of the Binance team on the Binance Coin (BNB) price breaking its previous all-time high (ATH), which had been set in January 2018.

This was the tweet Justin sent out at 08:54 UTC on April 20:

CZ replied with this tweet:

According to CryptoCompare, at 07:05 (UTC), the BNB price reached the new ATH of $25.42, as can be seen in the 24-hour price chart shown below:

BNB - 24 Hour CC Chart - 20 Apr 2019.png

As CryptoGlobe reported on April 18, there have been quite a few catalysts behind the impressive rise in the price of BNB over the past three months, a few of which are listed below:

  • High successful initial exchange offerings since January 28 (BitTorrent, Fetch.AI, Celer Network) via Binance Launchpad.
  • Ever-expanding list of use cases for Binance Coin.
  • Regular quarterly BNB token burns (the 7th one was reported by Binance on April 16).
  • Successful mainnet launch of Binance Chain (on April 18), with the swap from ERC20 BNB tokens (on Ethereum) to BEP2 BNB tokens (on Binance Chain) expected to begin on April 23 at 00:00 (UTC).

With regard to future BNB price catalysts, since Binance seems to be betting its future on Binance Chain, the main ones are probably:

  • a successful token swap process (i.e. from ERC20 BNB to BEP2 BNB);
  • existing projects, such as decentralized social media platform Mithril, announcing their migration to Binance Chain; and
  • new projects deciding to adopt Binance Chain.

Finally, if you are a BNB token holder and you are worried about how to prepare for the mainnet token swap, the best advice comes from Binance:

 

Featured Image Courtesy of Binance