Cryptocurrencies and the Labor of Computers.
According to torrentfreak.com, “the Pirate Bay tested for a short period (~24 hours) a new way to generate revenue that could eventually replace the ads on the site.”
This “new way of generating revenue” is actually a javascript-based cryptocurrency miner. This practically means that when you visit a page with the specific javascript embedded, your browser will “mine” a crypto currency called Monero (XMR) on behalf of The Pirate Bay.
Mining Monero is CPU intensive and this is why according to the article many TPB (The Pirate Bay) visitors complained that their CPU usage increased dramatically when visiting the site’s pages.
TPB used Coinhive, “a crypto miner for your website”.
Coinhive offers a JavaScript miner for the Monero Blockchain that you can embed in your website. Your users run the miner directly in their Browser and mine XMR for you in turn for an ad-free experience, in-game currency or whatever incentives you can come up with.
You can either embed the miner in your website’s pages, or use it for specific actions. So apart from embedding their ocde in a web page, they also have a CAPTCHA that will mine a tiny fraction of Monero (it will take a few seconds) to verify that “you are not a robot”, of a short link generator that will also do so, before redirecting you to the page you want to go.
For example, http://cnhv.co/6tv will redirect you to my homepage. On my 2015 MBP, Chrome needs about 70 seconds and generates about $0.00002 for me. (Click it to see how it works.)
Not much, I agree. But the idea is compelling. Especially if you have a website where users spend a lot of time, like an online game, or a video streaming service.
Up until now, there were two major ways to monetise online services: ads, subscriptions, pay per view or maybe use a service like Patreon. But this new approach, may allow users to pay using their computer’s resources, like CPU cycles or storage space.
Other cryptocurrencies, designed from the ground-up to run in browsers, like Nimiq may be even better suited for this kind of use.
But it does not have to be in-browser. What if your next set-top-box offered you free access to content because it would also mine a cryptocurrency when it is not used?
Of course, nothing is really free. CPU cycles, cost in hardware investment (the cost of buying your computer for example) and power (you probably noticed that your computer worked harder when you clicked my coinhive short link at the beginning of this article, and this means it consumed a little bit more electricity than it would have otherwise).
However, cryptocurrency mining, even after taking out the cost of energy, is profitable in many cases, and the idea is interesting.
After all, not all cryptocurrencies are based on Proof-of-Work (that requires your CPU/GPU to do intensive calculations). For example, BURST is a Proof-of-Capacity cryptocurrency that can be “minted” using the free space on your hard disk. And others are based on using CPU cycles for possibly more expensive tasks, like Golem who is building a “decentralised super-computer” that will charge to do tasks like CGI rendering.
I don’t know if a model like Coinhive’s will actually make sense at a large scale. Or if in the future, instead of investing in buying an apartment that will let you have a steady income from its rent, it would make more sense to invest in a rack full of GPUs or ASICs that mine cryptocurrencies or sell CPU cycles to others.
But as “traditional” money allow us to convert human labour to something that can be accumulated and spent later to purchase goods and services, so do cryptocurrencies for the labor of computers. And this opens up new and exciting possibilities.
-- (*) Photo by Marko Ahtisaari