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Even though "foldable phones" and "5G" were undeniably buzzwords at this year's Mobile World Congress (MWC) in Barcelona, a minor trend caught my attention: "mining phones" – or otherwise phones exploiting cryptocurrencies.
For the uninitiated, the extraction refers to the process of solving cryptographic puzzles to check the transactions on the blockchain; in exchange for solving puzzles, miners are rewarded with cryptocurrency.
Because of their difficulty, these puzzles require considerable computing resources. This is why miners usually resort to specialized hardware solutions to make the process more efficient. These puzzles also consume a lot of electricity.
Compared to processors and standard GPUs installed in laptops and PCs, mining equipment tends to be extremely expensive. Its life is also much shorter, sometimes due to the intensity of the extraction process, and sometimes due to changes in blockchain software (called "forks") that make the hardware less efficient.
As you've probably already guessed, phones are not particularly suited to mining. On the one hand, they can not offer the computer computing mining platforms can; they also can not continue mining for long periods of time because, well, a phone battery can not take you that far.
But for some reason, MWC blockchain startups seemed determined to mine your phone one thing. But there is a disadvantage: "mining" does not actually mean mining in this case. Or at least, exploitation does not occur on the "operating phones" that these startups push.
"Mining phones": an elaborate marketing move?
In the case of the mobile operator and the Spanish phone maker Wings Mobile, it was the latter. The company has announced its new Minephone WX phone, which, according to Wings Mobile, is the "world's first smartphone generating Ethereum".
Although a poorly designed phone with mid-range specifications is nothing interesting, what piqued my curiosity is the promise of Wings Mobile: this phone can bring you up to 2 Ethereum per month .
Yes, you heard right – up to 2 Ethereum per month. At the time of writing, this represents approximately $ 280. But at the height of the crypto-currency craze, it was worth well over $ 2,000. For context, we tested a minor (somewhat) specialized in the Ethereum in 2017, which managed only about 1 Ethereum per month.
Yet Wings Mobile claims to have developed a device capable of generating twice that amount – in a much smaller form factor. In addition, the Minephone WX could reach 1,000 MH / s per second. In contrast, the Ethereum miner that we tested was running on eight graphics cards and was only about 200 MH / s.
Wings Mobile says the WX will cost about $ 3,300 (2,900 euros). This may seem like an exorbitant price for a device with such mid-range specifications, but the Spanish phone maker ensures that your investment will be profitable in the long run, claiming that the device could bring you a profit of over 10 $ 1,000 in just three years.
On top of that, Wings Mobile notes that Ethereum is expected to grow in the years to come.
"Projections concerning the evolution of the Etherereum estimate that at the end of 2021, its value will be € 5,000," the company writes in a pitch deck. "This means that all owners of a 1000 MinePhone Wings have a revenue potential of 360,000 €."
So, how do you know if Minephone WX mining cryptocurrency is much better than specialized mining equipment? Pretty simple: it can not.
Instead, the extraction takes place on a third-party operating pool that Wings Mobile intends to develop with revenue generated by its Minephone, the company said in Hard Fork.
"Mining takes place in a pool," said a Wings Mobile representative to my colleague Matthew Hughes at the MWC. "We do not use your device for mine, otherwise the battery would be destroyed in two hours."
Here's the trick: When you buy the Minephone WX, you also subscribe to what Wings Mobile calls a "mining activation plan." The company currently offers four different levels, from 100 Mh / s entry and up to a bonus of 1000 MH / s.
Wings Mobile calls this approach to reach a consensus Proof of data; Oddly enough, a Wings Mobile representative with whom we spoke mistakenly called him "proof of time" before quickly fixing his mistake.
In Proof-of-Data, "the probability of validation of a block is determined by the contract enabled (100, 300, 600, 1000) and by the time of Internet connection with the pool within 24 hours", according to a pitch of Wings Mobile. platform.
Although the activation level extraction plan is free, you will have to pay an exceptional fee to subscribe to higher levels. The 1000MH / s package costs 13 Ethereumcurrently raising more than $ 1,750.
Wings Mobile indicates that each activation plan lasts three years.
For the record, Wings Mobile is not the first company to experience such a business model.
Indeed, mining contracts – what Wings Mobile essentially calls "mining activation plan" – were a popular trend last year. This is until the market starts to bleed and the mining pools start to lose money. Genesis Mining Mining Service has recently been forced to terminate prematurely a multitude of user contracts, accusing the bear market of being responsible for abrupt cancellations.
Even worse, Genesis Mining was not the only company facing this problem.
For some reason, Wings Mobile is categorical: its model makes sense. Asked about the long-term viability of their business plan, Wings Mobile representatives told Hard Fork that they remained confident that they would be able to keep their promises to their customers.
That remains to be seen, but as history shows, the odds are against it.
In addition, Wings Mobile was not the only company offering MWC compatible phones. Similarly, the cryptocurrency developer Electroneum has announced M1, its new $ 80 handset for developing countries.
"the Electroneum M1 incorporates the built-in Cloud Mining feature, which pays its owner up to US $ 3 worth of ETN (mobile cryptocurrency) each month, "the company writes in a press release.
Unlike Wings Mobile, Electroneum clearly stated that the operation does not take place over the phone. The exploitation takes place instead on the mobile application of Electroneum (available for Android and iOS).
"Mining is actually an infiltration into the clouds, done in our cloud," Conon Doyle, Marketing Manager at Electroneum, told Hard Fork. "Similarly, when we say that extraction is a simulation, we reward users for their commitment. As long as the user communicates regularly with the application, he receives up to $ 3 ETN per month. "
So, why buy the M1 if you can use the device you already have for "mine"? Doyle explains that owners of the M1 will have "preferential mining rates. "
A monthly reward of up to $ 3 may not seem like much to users in developed countries, but Electroneum says it could make a difference for people in developing regions. "The M1 is not only a powerful communication tool, but also a means of financial empowerment for millions of people living in economically disadvantaged areas," the company writes in a press release.
That said, it seems that the biggest problem for M1 owners will be finding the way to spend the ETN they earned, since most providers still do not support cryptocurrency payments. , not to mention a currency little known as the ETN. They could also seek to exchange their ETN for various cryptocurrency exchange services (but this would cost them additional transaction costs).
Blockchain phones at the MWC
Mining phones were not the only attraction of cryptocurrency enthusiasts at the MWC. There were also "blockchain phones".
The cryptocurrency transmitter Pundi X has announced its next release Handset XPhone – a device that he calls "the first phone blockchain". Despite the fact that there are at least two other "blockchain phones" that have already beaten the market on the market – Sirin Labs and HTC.
Pundi X still thinks he can claim "the first chain phone". "[HTC’s and Sirin Labs’] the focus is on cryptographic portfolios, "said a Pundi X representative in Hard Fork. "The blockchain mode offered by XPhone exceeds financial transactions. It is designed to decentralize everything (text, audio, video, images, etc.) to the phone. "
"We believe that there is still no phone in the market created for this purpose, "continued the spokesman. "That's why we call (if we can) the world's first" blockchain "chain phone."
In addition to standard telephony features, the XPhone should function as a node or, in other words, to store a copy of the block string network on which it is run and occasionally check for transactions. The device will operate on Pundi X's own blockchain, called Function X.
A spokesman for Pundi X told Hard Fork that Function X used a consensus mechanism called "Proof of Service", but unfortunately could not explain the actual operation of the algorithm. What the spokesman has confirmed is that the Function X network will support "miners" and "service providers" to validate transactions.
This suggests that the XPhone, which runs on a "dual" operating system partially powered by Android and the P12 X Function X operating system, could encounter problems with Google's ban on the operation of peripherals. The company is convinced to have a solution to this problem.
"XPhone has a dual operating system, one in traditional mode and the other in blockchain mode, "said a spokesman. "The node feature comes from the Function X operating system. This is not an application published through Google Play. "
As a reminder, HTC also said that its phone Exodus 1 would work as a node before its launch – a promise that the company had to break because of the ban on Google in the mining sector. Nevertheless, HTC continues to insist that future iterations of the Exodus will act as "partial nodes" no matter what it means.
Speaking of HTC, the Taiwanese phone maker had its own blockchain ads to tell the MWC.
In addition to a new integration (not very useful) with Opera, users will now be able to buy its Exodus 1 handset focused on cryptocurrency. But really, you probably should not spend $ 700 on a device that is neither a good phone nor an excellent cryptocurrency wallet.
It should be noted that prior to this decision, HTC had promoted the Exodus 1 as the first blockchain phone that you can buy exclusively with cryptocurrency. One wonders if this sudden change has anything to do with the fact that almost nobody buys stuff with cryptocurrency these days.
Speak but do not walk
Considering that the blockchain industry is renowned for selling unrealistic views on functional technology, it is not surprising that the trend continues up to MWC.
The problem with this strategy is that it turns around quickly when people see that the products they were promised are not the products they are getting.
At the height of the initial parts offering (ICO) boom in 2017, tons of blockchain startups have published white papers containing ambitious road maps, outlining plans for millions users do just about anything with blockchain -payments to cold fusion (otherwise known as alchemy).
But more than a year later, these visions are still far from reality. Worse still, very few people are using blockchain powered applications (at least for cash games).
So excuse me if I roll my eyes, when money hungry entrepreneurs tell me that mining phones (which are not really mine) are the key to massive adoption: I have lied too often to fall under charm.
Want to explore the future of blockchain and cryptocurrency? Head to TNW2019, our technical conference in Amsterdam on May 9-10 – and join the discussion on the Hard Fork Track.
Posted on 1 Mar 2019 – 13:29 UTC
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