You’ve got a computer to go online so the chances are you could use it to mine cryptocurrency (e.g. Bitcoins, Ethereum etc). I’m planning a longer post on this as I’ve explored it in practice but for now some Quick Fire details/pros/cons:
What is it?
Using a computer to run a special program that solves a mathematical puzzle (based on cryptography – the same set of principles that help secure your passwords and files in the cloud), the solving of which generates (or ‘mines’) virtual currency. This relies on something called the BlockChain – a sort of distributed ledger of transactions to work as currency without relying on real world banks, just other machines on the internet. It is beyond the scope of this short post to explain the technology behind cryptocurrency in detail but I recommend Omid Malekan’s book “The Story of the Blockchain: A Beginner’s Guide to the Technology That Nobody Understands” for more details.
Pro:
- Can mine (some) cryptocurrency with any computer.
- A way to earn money passively by just applying power to a computer – if you have ‘free’ electricity (e.g. Solar) and already have the computer / graphics card for other purposes, the start up cost is neglible.
- Cryptocurrency can be used to make anonymous transactions (actually this is a con as well depending on your perspective, it can lead to a ‘Black Economy‘ and encouraging the Darknet Market).
- Depending on the cryptocurrency exchange rate, a single cryptocurrency ‘coin’ can be worth anything from a few cents to thousands of dollars.
Cons:
- You may need to upgrade your computer to mine efficiently. Using an underpowered computer to mine can make mining take an uneconomically long time.
- May not be economically viable based on cost of electricity, difficulty of mining your preferred crypto-currency.
- Not very environmentally friendly (use of electricity to mine virtual currency has environmental impact).
- Crypto currency exchange rates are highly volatile so unless you exchange the crypto currency into traditional (fiat) currency, it could be worth a lot less than it was when you mined it.
- Crypto currency is somewhat the wild west of currency with little or no regulation which can lead to fraud, theft and no protection from the financial industry if something goes wrong.
- In some countries crypto currency trading is prohibited.
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