Andrew Lockley – Exponential Investor (United Kingdom) –
Halloween may have been and gone – but the zombies are here to stay. I’m talking about a new trend for online publishers to take over your computer’s “brain”, and force it to mine bitcoin. So, while you’re innocently watching cat videos, your PC is powered up to the max – and making money for the website owner.
Why has this come about? Simply put: ads don’t work. Publishers are increasingly struggling to make money. A combination of ad blockers and simple inattention grind down their income. Bitcoin mining offers a reliable alternative – but that’s not necessarily something that users are going to accept. After all, do you want your laptop fan screaming away, while publishers take your electricity to mine bitcoin? Maybe that cat video isn’t so important, after all…
Just before I hand you over to today’s interview subject, I want to tell you how to get further information on bitcoin’s astonishing economic success story. If you’d like to bone up on bitcoin (and other cryptocurrencies), then you really need to download Sam Volkering’s book.
Now, today I’m talking to Matvey Dyadkov, CEO of BitMedia.io, about the websites that force you to mine crypto.
For transparency: Bitmedia.io is a client of mine, for work not typically related to press and PR. It has not paid me, or Exponential Investor, for this coverage – nor is it a condition of any other work, or contract.
AL: Hi Matvey. What do you think of in-browser cryptocurrency mining? Is it a viable route to traffic monetisation, for publishers?
MD: Firstly, I’d just like to point out that it’s not a new thing. However, it became widely known after recent news that Pirate Bay was using their visitors’ computers for mining bitcoin. Actually, I would not consider this as an alternative to online advertising – at least now.
AL: Why not?
MD: Earning money by means of advertising and mining are two completely different kinds of things. Absolutely different approaches should be used in these two cases. Advertising is designed to attract visitors’ interest, and to encourage them to purchase a product. In the case of mining, the goal is to use the maximum of computing capacity, for the longest span of time possible – and this means getting users to stay on site for a long time, even if they’re not doing anything. Mining creates a lot of problems for users – as their computer can become super-slow. This negatively impacts the reputation of the website.
AL: What prevents publishers from using this approach more extensively?
MD: Simple mathematics is the main barrier. Let us assume that you have a website with half a million user sessions a month. (We took Satoshi Hero as an example). If you select to publish online ads, you can earn about $1,000-1,500.
Now let’s assume that an average session lasts eight minutes, and you want to mine Monero coins. This is a common approach, because it is deemed to be the best altcoin for in-browser mining. The capacity you may get from visitor in this case, is 25 hashes per second.
As a result, you get 7 billion hashes per month or approx. $100 in accordance with the current Monero price.
AL: But if it makes money, then why not use it?
MD: Mining may make user experience even worse than digital ads – and that irritates everyone. Try to load 100% of your processor capacity and then surf the internet!
AL: Can users switch this off, using something like an ad blocker?
MD: Mining s can be blocked much more easily than can online ads. Nevertheless, cryptocurrency mining is becoming more popular on shadow economy websites (adult, gambling etc) – as it’s more difficult for them to find advertisers. Hence, the owners of such websites are less picky when it comes to ethics of traffic monetisation. For instance, such websites often advertise malicious software. Often, it seems that owners of these websites do not care much for their audience.
AL: Are you planning to work with this kind of mining?
MD: In BitMedia we closed this topic long ago. We came to the conclusion that in-browser mining is a bad idea – from both legal and ethical sides. Using visitors’ resources without their explicit permission may be not prohibited, but it is definitely not what website visitors would prefer. It uses their system resources, and makes their computer work slowly. Moreover, everyone forgets that competing with traditional miners requires a lot of resources. It is difficult to compare the capacity of a desktop computer with modern GPU-miners. Apart from that, one should bear in mind that the session duration is counted in minutes, whereas miners work for 24 hours a day – and each of them contains 6-12 video cards. Home computers really aren’t an efficient way to conduct a modern mining operation.
AL: Will in-browser cryptocurrency mining become a widespread phenomenon?
MD: I think that the kind of in-browser mining we see now will not develop at all. There’s no sense to compete with specialist mining machines, that are constantly getting cheaper and more efficient. Even though the publishers don’t pay anything for such kind of operations, they will need an enormous amount of traffic to make mining more profitable than publishing ads. I would not consider mining as a viable means of traffic monetisation for most websites.
On the other hand, the technologies of micro payment and crypto monetisation are developing now. Our team is also working on a protocol for online advertising now. It is called AdLedger.io – and the project will implement our vision of monetisation, and digital advertising as a whole.
AL: What kind of future can you imagine?
MD: The fact that blockchain and decentralisation is our future goes without saying. Bitcoin was a pioneer of blockchain technology, and gave a push for the development of a huge industry. Realistically, however, it was only a start. Nevertheless, bitcoin solves one particular problem – the transfer of some amount of value, without the possibility of cancelling or faking the operation. Now blockchain is being used everywhere – and this hype-driven, indiscriminate use is quite stupid. Time will tell which of all these projects will actually prosper from blockchain technology – and go on to change our lives. As for online advertising, there are many problems that may be solved with the help of blockchain – and that’s where we’re focusing.
Do you mind your PC being zombified, to support the websites you visit? Let us know: email@example.com.
PS don’t forget to download Sam’s crypto book.
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