According to new data published by Yassine Elmandjra, a cryptocurrency analyst for ARK Invest, Bitcoin (BTC) mining now accounts for over 80% of all Proof of Work (PoW) mining revenue. Notably, Bitcoin’s (BTC) share of total PoW crypto mining revenue has risen 250% since the middle of 2017, while simultaneously altcoin PoW mining revenues have withered.
Essentially, the mining industry is becoming concentrated around Bitcoin (BTC). This has mostly been driven by the Ethereum (ETH) mining industry withering away. There was a time around the middle of 2017 when Ethereum (ETH) miners collectively earned more revenue than Bitcoin (BTC) miners. This was simultaneous with the initial coin offering (ICO) boom of 2017. Other cryptocurrencies which saw a rapid increase in PoW dominance at that time include Zcash (ZEC) and Bitcoin Cash (BCH).
However, the bear market of 2018 and the ICO bust, with numerous ICOs being revealed as scams and frauds, has led to a general collapse of the altcoin market. Indeed, the Bitcoin dominance percentage, which is the Bitcoin (BTC) market cap divided by the total crypto market cap, has risen from 32% at the beginning of 2018 to nearly 70% now. Essentially, this shows that the value of altcoins has contacted substantially relative to Bitcoin (BTC).
Mathematically, a decline in altcoin values causes altcoin PoW mining revenues to dry up as well. Ethereum (ETH) mining is the worst hit, and this is likely due to a combination of the Ethereum (ETH) price sharply dropping and the Ethereum (ETH) developers slashing block rewards in preparation for the transition from PoW to Proof of Stake (PoS). Indeed, Ethereum (ETH) PoW miners will be wiped out by the PoS transition in the medium term, so any Ethereum (ETH) miners left are basically on a sinking ship.
Mining revenue for Zcash (ZEC), Bitcoin Cash (BCH), and Litecoin (LTC) has dried up as well, due to altcoin prices in general not keeping up with Bitcoin (BTC).
Overall, this data shows that the crypto space is becoming highly Bitcoin (BTC) oriented once again. During the 2017 ICO boom numerous miners, traders, investors, and users heavily speculated in altcoins, but the ICO bust of 2018 has mostly put an end to that, with crypto users in general deciding to own, mine, and trade Bitcoin (BTC). Essentially, Bitcoin (BTC) has proven itself to be reputable and solid long term, while altcoins have generally proven to be transient.
Another way to look at it is the crypto space is simply returning to the way it was before the ICO boom of 2017. Indeed, for most of the history of the crypto space Bitcoin (BTC) was by far the dominant crypto, and the ICO boom and altcoin speculation of 2017 has in the end proven to be a temporary fad.