Revisiting Cryptocurrency in 2020
What's Happening With Bitcoin, Monero, Webdollar, Mining, and More
Years ago, I earned a couple hundred dollars messing around with Bitcoin. While it was a neat technology that covered our family's pizza budget for a few months, in the end I didn't feel like it was worth the immense amount of time I put into research and experimenting.
Every few years, however, I like to check in on the state of cryptocurrency. What's their values? Have my favorite flavors of currency died? Are there new ones that are actually interesting? Are there new ones that are flagrant pump-and-dumps? What currencies are still mine-able? It's interesting to see that there's a market for different versions of cryptocurrency, some of which are nearly-identical versions of Bitcoin with little tweaks to make them juuuust-noticeably different.
Here's the few I looked into:
Ah, the one that started it all. In early 2009, Bitcoin started with the idea of making electronic transactions without relying on currency or banking. It took a while before it was worth anything, with 10,000 Bitcoin once being exchanged for a couple of Papa John's pizzas.
Bitcoin has fluctuated greatly in value since its inception, with people using it as more of a speculative investment than a currency. From literally holding no worth, to rising up to $31 in 2011, then to $2 to $266 to $100 to $1,000 to $200 to $5,000 to $3,000 to $19,000 to $3,000 again to where it is in June 2020 at $9,700. None of those numbers are made up, by the way. It is the actual way the market has fluctuated for Bitcoin in the last nine years.
When it came out, people mined Bitcoins by running mining programs on their computers. These programs turned CPU power into money, as cryptocurrency miners maintain the network they're running and get rewarded for it. Coders figured out that video cards could do a better job at mining than CPUs, then created new mining programs that could take advantage of the powerful computer-inside-your-computer. The endgame to this power creep is specialized devices called Application Specific Integrated Circuits began appearing that dwarfed the mining abilities of regular computers. With these ASICs, it became impossible to mine BTC for a profit with either a computer or graphics card ... so I'm not even going to try it.
Even though I have no desire to mine Bitcoin in the forseeable future, it is nice to see that it's still getting adopted in more and more places. You can buy Bitcoin at Coinstar! One of my local pizza joints still accepts it! Bitcoin trading sites last longer than six months before their owners disappear!
The first cryptocurrency that caught my eye was Webdollar. The designers made a currency that can be mined in a browser -- going to their website (webdollar.io) automatically sets you up with a wallet address and a mining client. This is a remarkable drop in difficulty from other currency clients and miners, which often involve downloads flagged as malware, compiling source code from github, handling command line flags, slaughtering tigers with your bare hands, or other generally user-unfriendly hoops you have to jump through.
With that big plus for user-friendly access, there's some big flaws. Most altcoins have a reward model for distributing new altcoins. They are either Proof-of-Work (the work you do mining translates to a reward), Proof-of-Stake (the amount of altcoins you own translates to a reward), or a mixture of both. Webdollar spends two-thirds of its time giving rewards for Proof-of-Stake, which means if you're an early adopter who has lots of Webdollars, you'll have a much better chance of earning interest on your balance versus a new miner trying to scrape by. People just starting out mining with a 0 balance (me) have a much lower chance of getting an actual reward.
UPDATE: I just found out that WEBD will be going to from a 33.33/66.67 ratio to a 10/90 ratio for their Proof-of-Work/Proof-of-Stake model. While this makes the currency more "secure," this will also make it even more difficult for entry-level miners to get any newly released WEBD.
The other unfortunate problem with Webdollar is that it just isn't traded/used as much as other altcoins. At the time of this writing, WEBD is in 943rd place in terms of market cap with $357,745 (in comparison, Bitcoin is the top coin with a market cap of 177 BILLION dollars). If you get Webdollars, there's no guarantee you can trade them for anything.
If the people developing WEBD changed its reward model to something miners could actually use, it would probably get adopted more. As it stands right now, however, it looks like it's either stuck in a rut or ready to be dumped.
Monero is an altcoin that was built on anonymity. It is more difficult to track transactions through Monero than the open-to-the-public Bitcoin, and that gives XMR an appeal to people who want to see a higher layer of security in their online transactions. It also changes it's hashing algorithm often, which makes it both difficult for people to flood the mining market with specialized devices, and easier for regular people with PCs to be able to mine for themselves.
I was a fan of Monero the last time I played with cryptocurrency, so I decided to check in on its place in the global market. The last time I looked into Monero was 2017 where one coin was worth $20. It then peaked at $542 in 2018, before dropping like everything else in the coin market. Now it's at $68 (EDIT: $68 June 5, $65 June 7), and it still remains in the top 20 of traded coins. It also has a market cap of $1.2 billion, so its stable enough to not be vanishing anytime soon.
After seeing its continued stability, I decided to try my hand at mining Monero. I got a new address with the Monero wallet, downloaded XMRig from github, connected to a pool of miners and got to work! Chugging along at a brisk 2200 Hashes/second, I let the mining program run for a full day to see what I'd wind up with. While I know that one non-optimized computer won't do much to reap massive amounts of money, I knew that I could maybe pay for my own electricity and warm my feet while I'm at it.
I was wrong.
After a full day, I wound up with .0022 XMR. Doing the math, that's almost FIFTEEN CENTS. Maybe casually mining was just too casual. Just for fun, however, I did try to dedicate all resources from my computer to mining, as well as get all of my other computers/laptops cranking away to see how much power I could put into mining.
I first directed all my desktop processing power towards mining (4300 H/s). Then I added my kid's desktop (1100 H/s). Then I added my wife's laptop (600 H/s). Then I found two older laptops that were collecting dust (200 H/s each). This almost tripled my mining power, but will still only get me an estimated .0055 XMR/day, or around 38 cents. Still, I think I'm going to run my little mining rigs for about three days until I get a payout from my pool. Or until I see a spike in my power bill. Or until my kid/wife wants their computer back.
With everything that has happened in the world of cryptocurrency lately, it's obvious I have missed a lot. I'd like to keep writing about it, and if you have any ideas, let me know on my Facebook page. Also, if you'd like to donate some Monero, my address is:
If you'd like to donate some Webdollars, then ... uh ... good for you?