Coinbase CTO Praises Coinmine Decentralized Home Crypto Mining Devices, Says Timing is Now
Time matters and timing matters more. Those with a philosophical bend might find a lot of contention with that. However business is different. The designs by Di Vinci might have been laughed at, yet they were blueprints for many modern devices. That seems to be the reasoning behind Balaji Srinivasan, CTO of Coinbase, pledging support to Coinmine, a startup looking to provide a home miner, soon.
Balaji is a well-known pioneer in the field of consumer bitcoin mining. The area of the industry is notoriously abrupt, with some famous falls such as Butterfly Labs and Alpha Technology. Still, the Coinbase boss is confident the new startup will fare better where many have failed in the past, popularizing at-home crypto mining.
His confidence might not just be false bravado either, as he reasons “The big difference with decentralized mining in 2018 is that there are now so many different coins and tokens out there that it’s almost certainly possible to make a profit – or at least mine a decent amount of some crypto – via a decentralized home mining device like Coinmine.” Thus the faltering trend might yet be reversed.
And he should have a fair idea of what goes into the success and failures of such an endeavor. Back in 2015, Balaji founded 21.co, a startup that laid an ambitious plan that would foster an ecosystem of home mining. This would be done by embedding technologies in everyday devices as well having a custom built Computer. The idea did not take off as intended and was subsequently retired in 2017. However, perhaps due to that experience Balaji backed Coinmine during its angel round and now has publicly acknowledged that Coinbase Ventures is a backer of the project.
Its Raining Coins And Opportunities
While this seems like a sound diversification policy for Coinbase, it is much more. Balaji has faith in the maturing crypto economy and also noted a couple of differences the last few years has made, to the industry as a whole.“Back in 2015 only bitcoin had any significant share, so the viability of any decentralized mining approach was benchmarked against BTC alone as opposed to 1,000-plus new digital assets,” he explains.
Due to the varied options, in terms of the myriad cryptocurrencies in the market today, those who are interested, today don’t have to fight a lopsided battle against any giant pools. The experienced investor noted that due to decentralized mining now there are many more different coins and tokens. This he feels is an opportunity, “it’s almost certainly possible to make a profit – or at least mine a decent amount of some crypto.” And this is where he feels home mining devices like Coinmine will come in. He sees this as a bet on more worthwhile coins to come. “There will likely always be some asset or set of assets that Coinmine can mine which makes a profit.”
This sort of sentiment has been echoed by Adam Draper, the BoostVC cofounder. He has proudly announced that he has recently backed his 100th crypto startup and noted that though bitcoin is still the defacto crypto at the moment, he sees the industry change into one with more to crypto than bitcoin.
Although new coins themselves might not suffice as these tokens would have to be adjudicated well by the market so that they can maintain their value.
Updating Your Way To Success
One thing essential to ensure the success of Coinmine will be its ability to add new coins and possibly even launching new tokens. Balaji feels, “If Coinmine gets to substantial scale, you might even see some new digital assets in the future with ASIC-resistant hash functions launching directly on Coinmine.” Thus remote updates will undoubtedly play a key role in determining the chances of the success of this venture. At the moment the system will run an only proof of work, though there are plans to update proof of state tokens into the system, next year.
So How Do I Get The Ball rolling?
Not so fast, there are a few things that are to be noted. Users will certainly pay the price for this ease and convenience. Farbood Nivi, CEO of Coinmine conceded that the system will automatically put its users into different mining pools. He notes that this is to make their product more “plug-and-play.” However, it will also mean that a significant amount of control will be relinquished by the user. Add to that, the company will charge a flat 5 percent of the users’ earnings as they mine,
Perhaps unsurprisingly many crypto enthusiasts are not altogether pleased with the plan and have raised questions about the potential for return on investment. The creator of Crypto Bobby, Rob Paone summed up the mood when he wrote “Sounds like it’s more of a fun/hobby purchase than a purchase for expected return,” Paone wrote. It has been calculated that for a $799 user, they could expect to earn about $5 per day. This is discounting any electricity costs accrued.
Interestingly Farbood claims that this is a major market segment that they might be aiming for. People who are not averse to spending about $800 dollars on a technology they have enough faith in. People with some money to spare and faith that they will get returns in the long run, but at the moment don't know enough about the specifics of how to run such a system.
Balajis parting comment was “I believe that decentralized mining is an important idea and worth trying again. It’s mining as Satoshi intended: many devices around the world with no single point of failure.” He believes that the crypto verse should welcome Coinmine.
There are certainly enough risky ventures out there to create doubt in the minds of many. However, as noted the possibilities are indeed many and as the industry matures a rehash of an earlier failed idea might yield significantly positive results. Whether that is in fact how this story ends, is yet to be seen,