Bitcoin Mining : Converting Computing Power into Cashflow

Bitcoin is the world's leading cryptocurrency, with a market capitalization briefly exceeding $300 billion. This hints at Bitcoin's amorphous nature: Is this a monetary or a corporate measure? Hard values become explicit in the processing of transactions and the digital mining of Bitcoins. Electricity is a primary input cost. Bitcoins earned are often used to circumvent local currency controls and acquire US dollars. For the period August 2010 to February 2018, we examine the financial components of Bitcoin mining revenues, their statistical contribution to daily changes, and to its variance. We provide empirical evidence that Bitcoin transaction processing is capacity constrained.This is an original manuscript of an article published by Taylor & Francis in Journal of Applied Economic Letters on 07 Nov 2018, available online: https://www.tandfonline.com/doi/full/10.1080/13504851.2018.1540841