Is Blockchain mining profitable in the long run?
Islam, N; Marinakis, Y; Olson, S; et al.White, R; Walsh, S
Date: 15 January 2021
Journal
IEEE Transactions on Engineering Management
Publisher
Institute of Electrical and Electronics Engineers (IEEE)
Publisher DOI
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 ...
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 work is important to those
academics who focus on understanding how service technologies and products underpin Industry 4.0.
Finally, this paper contributes to the practitioners’ decision-making process to embrace blockchain
mining as a technological entrepreneur.
Management
Faculty of Environment, Science and Economy
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