Unveiling 2019 Bitcoin on-chain data: Global miners’ total annual revenue is about $5.2 billion

Text, data and visualization | Carol Editing | Bi Tongtong

Data Partner | Produced by Chain.Info | PANews

"Bitcoin is the best performing asset in the past decade." Merrill Lynch and Bloomberg have both come to this conclusion. If we look at the increase, it is indeed true. It took only six years for Bitcoin to go from $1 to nearly $20,000, but the other side that cannot be ignored is that it only took one year for Bitcoin to go from $20,000 back to $3,000. Bitcoin's roller coaster market also took place in 2019.
As the price of the currency fluctuates, what stories have ordinary users, "whales", exchanges and miners each staged? PAData and Chain.info, a one-stop data service platform focusing on blockchain transactions, reviewed the 2019 Bitcoin chain data and released the "2019 Bitcoin Chain Data List" (click to read the original text to view the list content).
In the previous article, we mentioned the annual heavyweight data. In 2019, the number of Bitcoin on-chain transactions exceeded 100 million, and the global actual market size was nearly 4 trillion US dollars, equivalent to about 1/4 of the total transaction volume of A-shares. This article is the second part, showing the changes in professional players such as exchanges and miners in 2019.

PAData Insights:

1. The average monthly income of global miners is $461 million, and the handling fee accounts for only about 2.8%

In 2019, the total transaction fees on the Bitcoin chain reached 156 million US dollars, of which 35.2172 million US dollars were collected in June and 33.1799 million US dollars were collected in May. The total transaction fees for these two months accounted for 43.84% of the annual transaction fees. However, the lowest transaction fees in January were only 2.372 million US dollars. Therefore, from the perspective of the total monthly transaction fees, the monthly differences are relatively large. Taking the median, which is closer to the average level, the total transaction fees on the chain per month for the whole year are about 8.53 million US dollars.

From the month-on-month change of daily handling fees, the range of values ​​is relatively wide, which means that the change of total daily handling fees is relatively drastic. The total handling fee is the sum of the handling fees of each transaction. For a block, it is the first transaction (coinbase) of each block. In other words, its amount has no direct relationship with the transaction volume, but is related to the number of transactions and the network congestion status. Large daily fluctuations in handling fees may also indicate large fluctuations in the number of daily transactions, or that the network operation status is not very stable.

Transaction fees are one component of miners’ income, and another component of miners’ income comes from block rewards. In 2019, for every block mined, the system will reward miners with 12.5 bitcoins.

The fluctuation of miners' income is basically consistent with the fluctuation of coin price. According to statistics, the total annual income of global miners is about 5.209 billion US dollars, and the average monthly income is about 461 million US dollars (median). Among them, July is the month with the highest income for miners, with the total income of global miners reaching 657 million US dollars. The three months with the highest income, July, August and September, are also the three months with the highest coin price in the whole year. February is the month with the lowest income for miners, with the total income of global miners being only 196 million US dollars.

At present, miners' income still mainly depends on system rewards, and the handling fee only accounts for about 2.8% of miners' income on average. However, as the Bitcoin network's rewards are halved every four years, handling fees will gradually become the main source of miners' income. If the halving does not bring about an increase in the price of the currency, the income pressure on miners will increase, and the possibility of an increase in transaction fees cannot be ruled out, which will affect the operation of the Bitcoin network.

2. Coinbase has the largest amount of inflows throughout the year, and the three major domestic exchanges have frequent fund transactions

Although the global market size of Bitcoin has reached nearly 4 trillion US dollars, it is still a niche market. Especially in the past two years, Bitcoin has not been effective in "going out of the circle" and there has been no substantial breakthrough in the user scale. Stock game has become the current situation of the Bitcoin trading market.

Chain.Info has established a global exchange wallet database with more than 10 million address tags through machine learning algorithms. As of January 14, Coinbase had the largest on-chain BTC balance among exchanges, with a total of about 981,300 bitcoins, followed by Huobi and Binance, with on-chain balances of 336,700 bitcoins and 247,400 bitcoins, respectively. Bitfinex, Bitstamp, Kraken, Bittrex, Bitflyer, OKEx and Coincheck ranked 4-10, with on-chain balances of more than 30,000 bitcoins.
According to statistics on the inflow and outflow of funds from exchanges throughout the year, Binance had the largest outflow of bitcoins to other exchanges in 2019, reaching about 256,900 bitcoins, followed by Huobi with about 243,400 bitcoins flowing out to other exchanges, OKEx with about 180,300 bitcoins flowing out to other exchanges, Coinbase with only 31,900 bitcoins flowing out, and Kraken with only 19,100 bitcoins flowing out.

Looking at the bitcoins transferred from other exchanges, OKEx received the most bitcoins transferred from other exchanges, reaching 256,900, followed by Binance, which received 173,200, Huobi and Coinbase received 113,900 and 112,600 respectively.

If the difference between the bitcoins flowing out to other exchanges and the bitcoins received from other exchanges is regarded as the funds obtained by the exchange in the stock market throughout the year, then according to calculations, Huobi had an outflow of 129,500 bitcoins in the stock market throughout the year, Binance, which is also one of the three major domestic exchanges, also had an outflow of 83,700 bitcoins, and Upbit also had an outflow of 30,800 bitcoins.

On the other hand, Coinbase became the biggest winner in the stock market, with a net inflow of 80,700 bitcoins in 2019, followed by Bittrex and Bitstamp, with net inflows of more than 30,000 bitcoins. Among the three major domestic exchanges, only OKEx had a net inflow of stock, but only 1,893 bitcoins.

PAData plots the transfers between exchanges throughout the year into a network, with arrows indicating the direction of the transfer and the thickness of the line representing the amount of the transfer. The closer an exchange is to the center of the capital network[1], the more central its position is in the entire network. Conversely, the closer it is to the periphery, the more marginal its position is in the entire network and the less active its interaction with other exchanges is.

Although the performance of the three major domestic exchanges in the stock market is mediocre, the three are still the center of the Bitcoin trading network, and large amounts of funds frequently flow between each other. Among them, Huobi made 862 large transfers to OKEx throughout the year, with a cumulative transfer amount of 97,900 Bitcoins, and Huobi made 630 large transfers to Binance throughout the year, with a cumulative transfer amount of more than 91,800 Bitcoins. OKEx made 590 large transfers to Huobi throughout the year, with a cumulative transfer amount of approximately 59,800 Bitcoins, and Binance made 557 large transfers to OKEx throughout the year, with a cumulative transfer amount of approximately 62,100 Bitcoins. These four Bitcoin fund flows are the four flows with the largest number of large transfers and transfer amounts between exchanges in 2019.

In addition, Upbit also transferred a lot of bitcoins to Bittrex, with 445 large transfers throughout the year and a total transfer amount of 39,900 bitcoins. The exchange that "harvested" the most stock funds in 2019 was Coinbase, among which Binance, Bitstamp, OKEX and Huobi all "contributed" more than 10,000 bitcoins, and Binance "contributed" the most, with a total of more than 31,900 bitcoins.

Also worth noting is the regional flow of Bitcoin behind the flow of funds to exchanges. According to statistics, the total amount of Bitcoin flowing from Binance to Bitstamp, Bitfinex and Coinbase in 2019 reached 106,800 Bitcoins, accounting for 41.57% of the total amount of stock funds "lost" by Binance. If the funds flowing from Binance to foreign exchanges such as Bitflyer, Bithumb, Bittrex, Coincheck, Kraken, Poloniex, and Upbit are included, the total amount reached 159,000 Bitcoins, accounting for 61.90% of the total amount of funds flowing from Binance to exchanges. The total amount of funds flowing from Huobi to these exchanges is about 50,300 Bitcoins, accounting for 20.67% of the total amount flowing to exchanges, and the total amount of funds flowing from OKEx to these exchanges is about 55,900 Bitcoins, accounting for 31.05% of the total amount flowing to exchanges. Although Huobi and Binance also "lost" the existing market in 2019, the funds outflowing from Huobi were mainly absorbed by the other two major domestic exchanges, Binance and OKex, while the funds outflowing from Binance were more absorbed by foreign exchanges.

Data description:

[1] The Fruchterman-Reingold algorithm is used here to layout social network relationships.