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.

Russia Will Not Legalize Facebook's Libra Says Top Official

A top Moscow official has said that Facebook's planned new cryptocurrency Libra will not be legalized Russia, according to a report this week from Russia's state-run news agency TASS.

Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, said Russia would not legalise the Libra stablecoin, due for launch next year, as it may pose a threat to the country's financial system.

No Russian Liberty for Libra

While Aksakov acknowledged Russians would be able to buy Libra on international cryptocurrency exchange platforms, he warned that the creation of any domestic mechanisms of exchange would be limited, or even prohibited.

TASS quoted Aksakov as saying:

With regard to the use of Facebook cryptocurrency as a payment instrument in Russia at this stage - my opinion is that in our country it will be banned.

He added that in Russia there were no plans to adopt legislation that "gives space for active use of crypto-tools created in the framework of open platforms and blockchains" that may pose a threat to Russia's financial system.

International Ministers Speak Out

Aksakov is not the first financial minister to express concerns over Facebook's cryptocurrency plans and their potential to damage sovereign currency markets and financial stability.

On Tuesday, French economy minister Bruno Le Maire, said that global governments must ask Facebook for "guarantees" that Libra will not be aimed as a disruptive force against sovereign currencies.

Facebook's plans have US government and regulatory officials so rattled that a Senate hearing by the Banking, Housing and Urban Affairs Committee has been scheduled for July 16. The government has asked Facebook to halt work on the project until the hearings have been held.

Sherrod Brown, senior Senator for Ohio and the Democratic Party's ranking member of the Senate Banking Committee, said on his Twitter feed on Tuesday: "Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight."

While Aksakov has major concerns about the growth of the cryptocurrency sector, Deputy Finance Minister Alexei Moiseev said on Wednesday that the Russian government was set to adopt the country's crypto bill "On Digital Financial Assets" in the next two weeks.