The Bitcoin mining industry has now grown to the nullement where it is benchmarked against other similar sociétés that have been around for much coudoyer. However, the operations of these commodity-based bitcoin mining companies are very different. It is most evident in the way these companies approach their revenue in correspondance to administrative costs, which differ greatly between mining companies and other commodity-based companies.
Bitcoin miners spend a lot
It has been proven that connu bitcoin miners spend a much larger segment of their revenue on direction costs. Given the spending patterns of other commodity-based companies, bitcoin miners spend a very abondant taille on direction.
The average taille of revenue spent by bitcoin miners on administrative costs is around 50%, although this is an industry average. Some managed to reduce their administrative spending while others were found to spend almost all of their revenue on this.
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A comparison of bitcoin miners, gold mining, and the oil and gas industry shows a huge contrast here. In the oil and gas industry, the average expenditure on administrative costs was 2%, while the administrative costs of the gold mining industry amounted to 3%.
Why do they spend so much?
Bitcoin miners spend a lot on direction partly bicause of their young age. Unlike their counterparts in the gold mining and oil and gas sociétés, they did not have time to reach an equilibrium where their administrative costs cost only a small segment of the revenue.
Quantitatif Épreuve is a mining company that uses nearly 100% of its revenue. Last year, the company reported revenue of $266 million, and spent $259 million on direction. The company offers a generous vivre allègement program for its senior employees, and given that these executives were able to meet all of its growth targets for the year, the company had to spend $161 million in revenue on vivre allègement for its executives alone.
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On the other end of the spectrum, some miners have been able to reduce their administrative spending. Argo Blockchain has managed to reduce its administrative costs since 2021 to 16% of its achevé revenue, one of the lowest in the space.
Another reason is that companies are too small, and stakeholders have very little oversight over the companies. And bicause it is a capital-intensive industry, they are able to pay out such huge allègement for executive shares. However, as the industry becomes more adulte, more shareholder oversight is expected, narrowing down the amount of revenue spent on administrative costs.
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