Investing

Cryptocurrency Mining – A New Form of Business Financing

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It is already well known that cryptocurrency mining can be a very lucrative business. In fact, there are already industrial conglomerates that are dedicated on a massive scale to the mining of Bitcoins or other cryptocurrencies. But not only are cryptocurrencies mined in some obscure and crowded container located on the other side of the world. A new fashion of mining is also spreading.

The dark side was the first to start the trend

You already know that global cybercriminals are often considered pseudo-business organizations, which have their costs, benefits, personnel, risks, their management etc… And also their reprehensible innovation, an R & D policy in all rule. It has been the dark side of the network that first opened the use of a famous script encoded in Javascript known as coinhive.

Coinhive is a piece of code programmed in Javascript, which can be embedded in an extension of your browser, or even in the code of a web page that you simply visit. At the moment you click, that code enters into execution on your computer, and begins to mine Monero’s tokens for profit without the consent of the user visiting the website.

You will probably not notice anything, maybe a slowdown in your computer, because your hardware and software resources are being used intensively to mine cryptocurrencies that will never be yours, no matter how much your equipment is used. In fact, what is most worrying is that much of this malware most of the time is still running on your device even once you have closed the browser, making the slowdown a problem that is chronic (and harms the user).

The first large-scale case known with ambition to finance

But leaving the dark side aside, with its malware and bots, the truth is that the first case on a massive scale of use without consent of Coinhive was one featured in the infamous download page, The Pirate Bay, only a few months ago.

Indeed, The Pirate Bay came up with a way to complement (or even replace) advertising revenue, and this was to use Coinhive so that while you browse the website, they are making use of your CPU and graphics card to mine cryptocurrencies. More specifically, The Pirate Bay mined the enigmatic and hermetic Monero, the cryptocurrency favorite today by cybercriminals, for being the one that guarantees anonymity and privacy.

Faced with the complaints by users, who saw how suddenly the access to the download website overloaded the resources of their teams, The Pirate Bay confirmed the facts, and stated that it was a mere test that had lasted 24 hours. But the viability of the model had been demonstrated, and the new fashion was ready to be launched on a massive scale.

And now, the first cases of a new business financing model are coming

After the “proofs of concept” deployed in the network, voluntarily or involuntarily, the fact is that its success has brought some extension of the fashion of mining at the expense of the visitor, and there are several websites that use the Coinhive script as a source of income.

But it’s not just web pages of dubious nature. The most significant aspect of the extension of this new trend is that there are already real companies and all kinds of official “web entities” that exploit this new fashion as a way of business income.

YouTube, for example, had several cases where hackers took advantage of its millions of users-  technically known as ‘cryptojacking’. The question is: Is it permissible to exploit this type of mining as a new way of financing business?

Analyzing the merits of the matter, we have to say that there does not seem to be anything wrong with a website running a script on your computer like Coinhive to mine coins, even if the benefit is not for you. Neither does it seem to be wrong to think of this practice as a new way of financing business to cover the costs of websites, provided that this savings also affects the consumer in some way, which is ultimately what is putting the Coinhive service your equipment and your electricity.

The only technical problem that may arise is the concurrence of several websites that simultaneously try to use their equipment to mine. Everything is a matter of developing an action protocol that does not allow for two websites simultaneously running Coinhive and leaving your computer without adequate resources to function properly. But it seems a priori something of an easy solution. You close a website when your management ends, and then open the next one.

The real issues is that this new trend is being put into practice without informing and without having the explicit consent of the user. If that premise is met, which could even make the practice somewhat legal, not only is using Coinhive just fine and legal, it can even be an innovative breakthrough for the consumer.

Value Proposition

The practice of embedding Coinhive on official websites can clearly be a win-win for business and for consumers.

You just have to regulate the practice, and implement it ethically and transparently. What should never be done is that a website continues to mine Monero for the profit of others even after closing our browser – that is inadmissibly intrusive.

This should be seen as an opportunity to improve customer service at no extra cost. One an make the argument that consumers would prefer to have a small percentage of their CPU used for mining, than put up with web pages bloated with annoying and offensive ads. Technically speaking, these ads also drain memory and consume data as well.

At the end of the day, Coinhive is just going a little further. The model is conceptually the same, only the degree changes, which is precisely what we claim should be controlled or even regulated.

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