The dogecoin (DOGE) army is not the only one making a killing this year. Miners responsible for generating the Shiba Inu-themed cryptocurrency may also be laughing their way to the bank.
- The daily revenue of dogecoin miners rose to a record high of $3.6 million on April 26, marking a 4,575% rise from the New Year's day tally of $77,000, blockchain data provided by ByteTree shows.
- Revenue estimates assume miners, who operate predominantly on cash, sell their coins immediately.
- Miners receive newly created coins and transaction processing fees as a reward for mining blocks and processing transactions on the distributed ledger.
- The price of dogecoin has rallied by 7,000% this year, sending miner revenue skywards.
- The meme-based cryptocurrency reached a record high of 45 cents on April 18 and was last seen changing hands near 32 cents, up nearly 20% rise on a 24-hour basis.
- Data provided by Coin Metrics shows a 60-fold increase in daily transaction fees this year alongside several brief spikes in the number of daily transactions.
- However, transaction fees brought in just $23,200 or 0.64% of the total miner revenue of $3.6 million on April 26.
- "Transaction fees have risen, but price overwhelms," ByteTree CIO Charlie Morris said.
- "The market has been squeezed higher. I suspect many people who owned it a few years ago have forgotten, leading to tighter supply than perceived," Morris added.
- Some observers fear the ongoing price rally is a bubble that can burst easily as 98 wallets are holding nearly 65% of all coins. Besides, the cryptocurrency is heavily influenced by Tesla and SpaceX CEO Elon Musk’s usually humorous tweets.
- Bitcoin bull and CEO of Galaxy Digital Mike Novogratz recently called dogecoin's rally a sign of speculative retail frenzy.
- However, DOGE's real-world adoption is gaining traction with the Dallas Mavericks basketball team, medical supplier CovCare and several others adopting the cryptocurrency as a payments alternative.
Also read: Dogecoin Spikes on Elon Musk’s SNL Tweet
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.