Before we delve further into its meaning and use in the cyber world, perhaps some background context is required.
The use of online or mobile applications software or “Apps” has boosted the way you consume products and services online. Companies jumped onto the bandwagon when they discovered that we mostly use Smartphones for the Internet – a lot more than on desktops.
App developers were then subsequently sought after to create mobile Apps for practically anything. What started as something mainly for gamers moved quickly onto Apps for any commercial activity.
We now use Apps (the Internet) for shopping; fitness; travelling; online bookings and banking. Developers now create customised software to help with anything.
There is now an App store for every significant tech provider – Microsoft, Google and Apple to mention a few. This has naturally fattened their pockets and created an additional stream of income from an eager market.
The ‘catch’ for using mobile apps is that though it costs you nothing to download, using them still require some form of ‘registration’. You can do this by providing personal data or linking to an existing account such as your Facebook or Google account.
The benefit to App providers
The Apps, which are also embedded in social media, create a data goldmine for marketers to study and track your browsing habits. Through them marketers can gain valuable insights into your interests and then customise their products/services to sell to you.
Data mining has become more lucrative and more accessible with the advent of Artificial Intelligence (AI) and Machine Learning. Ever notice how after browsing online or having a conversation or a chat application like WhatsApp or Facebook Messenger, you go online afterwards, and you see Ads displaying the items you discussed?
Creepy isn’t it? Well, that is the future of Web 4.0 for you!
Luckily for us, there is a school of knowledgeable and security conscious programmers who are not ‘giving in’ to the way the Internet has become a centralised cesspool for marketers to harvest data from.
Social media platforms, search engine providers and mobile application providers facilitate them immensely with this.
The impetus behind a distributed application system is that it serves to distribute plough some of wealth garnered from your data via application providers back to you – the end user.
Imagine getting paid to surf the web for hours. The way you get paid for taking on a survey, partaking in a social experiment, donating an organ or sperm?
This is the way distributed apps are touted to work: by rewarding you for the use of specific applications (in a peer-to-peer review like setting) with cashable tokens. Seems only fair right?
Now you can imagine how companies like Cambridge Analytica would react to having to pay you for their use of your data. There will be reluctance and resistance but if they could pay companies like Facebook for the use of data, why not pay us directly?
Joining the DApps revolution is a no-brainer. Companies at the forefront of building and supporting DApps will end up getting a more substantial chunk of the market.
DApps will primarily provide you with the use of payment (remuneration) systems. These are specifically known as Smart Contracts and Proof or Work systems.
Dealing with Cryptocurrency has its interesting dynamics. There are, however, many hidden facets making it still a mystery to the masses. Not knowing about it makes you prone to, get rich-schemes or outright scams.
We are all by now aware of the mania caused by the soaring prices and then, the subsequent decline that followed early this year.
What people don’t pay attention to, however, is finding out exactly just how complex it is to physically “acquire” and store these Cryptocurrencies.
Mining coins can be described very basically as the process where users “or miners” become part of a Cryptocurrency network. This by making hardware (PC processors and graphics cards) available to support that specific network’s operations.
As a miner, you contribute towards the working of the Blockchain. The technology requires millions of calculations to validate transactions into what are known as public ledgers.
There are three main ways to mine these coins but we will not be highlighting them in this post. The matter to be covered here, however, is the business aspect: how the Blockchain has created a new line of commercial entities and profit takers.
These modern tech “enterprises” offer a specific or cluster of altcoins and tokens as a reward for helping them maintain their Blockchain.
Sounds like a win-win situation right? Or is it?
Mining is hard
If you have actually looked into the main methods of mining you will discover that only miners with high-end hardware are able to produce enough power to contribute to the Blockchain. This is called “hash power” or “hash rate”. This is kind of like horsepower for cars, but for PC processing.
There are sites that illustrate how to calculate potential profits such as one conveniently called ‘what to mine’.
Your profit would, therefore, be the balance of the costs versus the revenue involved in mining coins – which is usually observed over a year to make a clear profit or loss assessment.
Mining profit = Revenue (quantity x price of the coin in local fiat currency)minus cost of the mining devices + annual electricity costs (measured in local currency per KWh).
The problem with going at it alone is that it is very hard to break even. You are also faced with a conundrum: the more powerful your hardware is, the more electricity it consumes.
It also takes a lot longer to acquire the coins which you are awarded by the respective blockchain network after successful hashing is completed.
To make it worth your while you would hope that the coin you mine’s market value exceeds the costs of the monthly/annual electricity bill.
There a now hundreds of these so-called Crypto/Tech companies spurting up by the day. Their modus operandi: to relieve you of the burden of the high electricity and hardware costs. This in exchange a monthly or once-off fee.
In return, they promise to mine coins and provide you with daily or monthly profits (payable in Crypto or in cash). They can do this because they presumably have bigger (and more powerful) mining setups and therefore benefit from larger economies of scale.
Some of these establishments use big rooms, whole buildings or even warehouses to run thousands of mining rigs throughout the year.
The payments you make supposedly help them with maintenance costs and pay for the said electricity bills. They are also usually stationed in countries where the cost of electricity is very low.
You are likely to, however, run the risk of dealing with the occasional Ponzi-scheme – setup. Such companies dive at the opportunity to swindle those not familiar with Blockchain and Cryptocurrencies.
By dazzling you with the price increases and potential astronomical returns which is public knowledge anyway, they take your money and make a run for it!
The acquisition naturally, would have been when they were dirt cheap, and are now offering the residue to make more profit off unknowing investors.
How it would work is: let’s say you owned 100 Bitcoins mined in 2010 for the opportunity cost of $100 each (cost of electricity).
You then sold half at the height of the Crypto ‘bull run’ in January 2018 when they were worth $19 000 each. You would have been $945 000 richer.
So, with almost a million bucks in the kitty and another 50 units of coins (which would be now worth a lot less); the natural inclination would be to look at ways to make the extra coins ‘work for you’.
And what better way than to be one’s own boss and head a Crypto company! You can with your new setup, sell off the residue of Crypto coins in bits for profits in cash.
This is likely what some of these companies offering coins for an opportunity to acquire Bitcoins. This under the pretense of partaking in a mining operation.
Meanwhile, in reality, the actual mining probably took place almost a decade ago!
All in all, do stay alert and do your research before parting with your money to join a mining pool or Crypto investment scheme!
On August 11 2018, the Bitcoin dominance level (market share) touched 50% for the first time in 2018. However, the move didn’t come amid a Crypto market rally. In fact, the cryptocurrency space has been in free fall until mid-August, moving in a sideways trend since then.