The new data mining software promises to allow almost anyone to earn small amounts of bitcoins with a Windows laptop, giving users a taste of the early days of cryptocurrency.
Exclusive to CoinDesk, New Jersey Encryption Startup Honeyminer has quietly launched a free beta version in June and has already collected 10,000 downloads worldwide. Honeyminer allows users to participate in a dynamic mining pool by running the app when the computer's graphics processing unit (GPU) is not in use to process images or videos.
The pool focuses on the mining of crypts such as ethereum, ethereum classic, zcash, Monero and other GPU-compatible currencies. Then, at the end of the session, Honeyminer sends the participant's earnings, converted into bitcoins, directly to the user's portfolio.
"The miner does not have to reckon or manage all configurations and settings, or manually control prices," Advisory Honeyminer Noah Jessop, a venture capitalist of the San Francisco Founder Collective, told CoinDesk.
"We do so any excess calculation, such that any laptop that does not use up to a rig that you run will automatically perform the most profitable calculation."
This type of service offers new opportunities for people who want to acquire bitcoins but have little money to invest or limited access to the cryptocurrency trade. It could also expand the range of participants in the extraction of cryptocurrencies, which over the years has had its barriers to entry as expensive, specialized hardware has given large and professional operations an advantage over hobbyists .
The Honeyminer algorithm automatically switches from cryptocurrencies every 10 minutes or so, depending on the size of the block, if there is a sudden change in the currency's profitability.
"We are joining people to find these block blocks faster, together we have a bigger hashrate," cofounder of Honeyminer Larry Kom told CoinDesk. "Not only do we connect to the blockchain and we make you anonymous through us, but you also contribute to what is, in essence, a pool."
To be honest, this is not the most profitable way to extract cryptocurrency, given the broader market volatility compared to bitcoin and Honeyminer cutting, ranging from 2.5 to 8% based on the quality of the user's hardware. Someone with a few high-end GPUs could expect to earn bitcoins worth a dollar or two from software running almost all day.
However, it could be one of the simplest methods to date. Although the company has refused to specify how many users are in countries where access to cryptocurrency is limited, such as Jordan or Venezuela, it is said that over 18% of users come from developing countries.
"If you hear about cryptography and you want to learn, you can either go out and pay real money in cash," Jessop said. "Or you can download a program in 30 seconds and start earning your cryptography for free."
Honeyminer's software was, in part, inspired by the controversies surrounding bitcoin mining. That is to say, the way many software users believe that Bitmain's China-based hardware provider has achieved a near-monopoly on mining equipment and how a similar number of companies control most of the mining basins.
"As we saw in proper bitcoin, the arms race intensifies on this custom hardware and therefore the people who have access to the best silicon boards are the people who control the mining," said Jessop. "For us, it's about increasing the number of people who have access to the best in the class."
But according to David Vorick, CEO of Nebulous, who runs Siacoin and the mining equipment manufacturer Obelisk, this may not change the broader ecosystem as well as attracting new, more curious beginners. Above all because the software is closed source, even if with plans to extend the open API in the future.
"This increases centralization because everything you've done has moved the power from the mining pools or from users who need to be advanced to software toolkits," he told CoinDesk. "Basically all the power lies with the software developers."
Elaborating on this point, Vorick said he believes the GPU's extraction will disappear almost entirely in the next two years regardless. He added:
"We will see generic ASIC come out [mining hardware] that is able to target many algorithms and as soon as that happens, the role played by GPUs is about to disappear."
For better or worse, the Honeyminer team recognizes that it will have to offer additional features for different types of users.
For beginner retail investors, Honeyminer will soon allow them to send their bitcoins to their wallets on third-party platforms like Coinbase. In addition, the app's algorithm can also help miners with professional mining rigs.
Whether they are laptops or inexpensive pro rigs, "each computer will have a different [task]based on its particular performance or capabilities, you" will be awarded the one that is most profitable for it, "said Kom.
Specialized version called Honeyminer Pro is being processed by professional miners who need help with power management and options to manually choose which encryption to extract from mine, so it's not limited to what is most profitable, nor to which coins to cash, in case they do not want bitcoins.
Speaking to the lack of user-friendly tools for novices as well as for experienced miners, Kom said:
"I would say there is no clear competitor for us, why we built what we built. "
Honeycomb image through Shutterstock