Cryptocurrency Mining Market has Huge Potential to Grow Rapidly
The cryptocurrency mining market was valued at US$ 610.91 million in 2016 and is projected to reach US$ 38.38 billion by 2025, exhibiting a CAGR of 29.7% over the forecast period, according to Cryptocurrency Mining Market, by Mining Enterprises, (Large Miners, Small Miners), by Revenue Source (Block Rewards, Transaction Fees), By Mining Type (Self-mining, Cloud Mining, and Remote Hosting Services) published by Coherent Market Insights
Cryptocurrency mining involves earning block rewards and transaction fees in return to their efforts to process transactions through digital currency exploration systems. Growing market capitalization of these digital assets coupled with increasing difficulty levels of the finding new blocks is expected to present significant growth opportunities to the industry participants, with high expertise in mining over the forecast period.
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Key Trends and Analysis of the Global Cryptocurrency Mining Market:Among mining enterprises, large enterprises segment accounted for over 70% of the market in 2016. Large miners are expected to witness highest growth owing to their varied service offerings to enhance hashing power and participation of large number of users in their pools. For instance, BTC.com does its own operations and provides participation to external users in its pool to enhance its probability of generating rewards. As of December, the company owned bitcoin hash rate of over 1.76 EH/s and bitcoin cash of over 22.8 PH/s
Among revenue sources, block rewards or mined segment accounted for the largest revenue share in 2016. However, with growing adoption of cryptocurrency and increasing difficulty levels in finding new blocks, transaction fees for this is expected to increase significantly in the near future. As of 2017, transaction fees is estimated to account for around 10% of the total revenues.
Among mining types, cloud mining and remote hosting services together accounted for the largest share of the cryptocurrency mining market in 2016. Remote hosting services segment is expected to gain significant traction owing to low cost of the solutions, no maintenance issues, and long duration uptimes.
Key Takeaways of the Market:According to Coherent Market Insights’ study, China accounted for the largest share in the global cryptocurrency mining market in 2016. This is owing to the availability of low cost electricity and low temperature zones that are favorable for these operations. As of 2016, 56% of the pools were based in China followed by 16% based in the U.S. However, location of the mining pool operator does not necessarily means the contribution of the computing power in the region. This is owing to the fact that organizations and individual miners can easily switch between pools and can be based from any region.
Favorable weather conditions, availability of low cost and excess of electricity and high Internet connectivity are the major factors that are used in determining the deployment of large scale mining operators. Russia is among the prominent countries that can secure significant position in the industry in the near future owing to availability of all the aforementioned factors in the country. In August 2017, according to regional publications in Russia, the government plans to develop government cryptocurrency mining centers.
Some of the major players operating in the global cryptocurrency mining market include AntPool, BTC.com, ViaBTC, BTC Top, SlushPool, F2Pool, Hashflare, Genesis Mining, Hashing 24, and Ebot. Industry is characterized by intense competition, with introduction of new entrants, and exit of established players. Moreover, to gain strong foothold in the market, players are focusing on developing low cost energy sources and efficient equipment to maintain and improve their profitability.
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