The price of Bitcoin recently touched the $6,000 level for the first time ever, and this year has seen the cryptocurrency’s value jump by over 500%.
Given the rising fortunes of Bitcoin and other cryptocurrencies like Ethereum, it’s no surprise that scammers have sought to capitalize. One of the ways they have attempted to cash in on the cryptocurrency craze is through a new phenomenon dubbed cryptojacking.
Because processing power and the energy that fuels it are the biggest costs associated with cryptocurrency mining, cryptojacking is an increasingly attractive activity for cybercriminals. Since September, cryptojacking scripts have been found on a number of high-profile sites, including those operated by cable network Showtime and football star Ronaldo.
But while cryptojacking is almost wholly a criminal activity today, a growing number of observers are starting to ask whether cryptocurrency mining has the potential to solve two of the biggest challenges to the internet economy: consumer distaste of advertising and the rise of ad blockers.
In simplest terms, here’s how it would work: instead of seeing ads, users would pay publishers by allowing them to mine cryptocurrency through their browsers as they consume content on their sites.
The ultimate micropayment solution?
In effect, browser-based cryptocurrency mining could facilitate a no-touch micropayment model that functions entirely in the background and doesn’t require any explicit action on the part of users. The more time they spend on a site, the more processing power they supply to a publisher for cryptocurrency mining, ensuring that their usage is correlated with their contribution.
Obviously, there are numerous issues that would need to be addressed, including how to ensure that the mining scripts don’t degrade performance.
There’s also the issue of whether or not cryptocurrency mining can be an adequate replacement for ad revenue. While Bitcoin and other cryptocurrencies have skyrocketed in value this year, they are still highly volatile and there’s much debate about their long-term viability. If the value of cryptocurrencies plummets, it could kill the viability of the model.
But after years of unrealized hype around micropayments, it’s intriguing that cryptocurrency mining looks far more promising than the long list of past micropayment attempts.
The Google threat
Perhaps the biggest impediment to cryptocurrency mining as advertising alternative is the fact that the online advertising ecosystem is filled with powerful companies that have no interest in alternative revenue models that could diminish digital ads. These include major advertisers as well as dominant ad players like Google.
In fact, Google is already exploring adding a special browser permission to Google Chrome to deal with scripts that mine cryptocurrencies. While there’s no reason to believe that this is motivated by anything other than a desire to protect users from cryptojacking, it nonetheless highlights the fact that Google, as the maker of one of the most popular browsers, theoretically could use its browser to defend its advertising business, something that some are already suggesting it is doing as it prepares to roll out a built-in Chrome ad blocker.
While one can only speculate about the potential for cryptocurrency mining to help support the digital content economy and provide an alternative to advertising, given the meteroic rise of cryptocurrencies in the face of years of skepticism, it seems appropriate to conclude that it’s far too early to rule the possibility out.