Is BlockChain Mining Profitable in the Long Run?

Article

Islam, N., Marinakis, Y., Olson, S., White, R. and Walsh, S. 2023. Is BlockChain Mining Profitable in the Long Run? IEEE Transactions on Engineering Management. 70 (2), pp. 386-399. https://doi.org/10.1109/TEM.2020.3045774
AuthorsIslam, N., Marinakis, Y., Olson, S., White, R. and Walsh, S.
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.

JournalIEEE Transactions on Engineering Management
Journal citation70 (2), pp. 386-399
ISSN0018-9391
Year2023
PublisherIEEE
Digital Object Identifier (DOI)https://doi.org/10.1109/TEM.2020.3045774
Publication dates
Online15 Jan 2021
PrintFeb 2023
Publication process dates
Accepted15 Jan 2021
Deposited17 Nov 2023
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