Mining CoinJanitor Tokens By Proxy
CoinJanitor is quite a unique project. Its initiative to deal with dead coins in a manner that restores some of the value they have locked in, makes it a pioneering concept in the space. But its unique characteristics seem to go beyond its goals. It seems that due to the project’s deployment of a token to unlock this trapped value through dead coin buy outs, CoinJanitor’s token might be the first ERC20 token that people will be able to mine by proxy.
Mining Power Behind the JAN Token
This might sound weird or even ridiculous, but it is certainly possible. Given the fact that CoinJanitor will be targeting dead coins that are PoW-based, in theory anyone would be able to start mining on those chains to claim dead coin rewards to exchange for CoinJanitor tokens during the buy outs. Some users on CoinJanitor’s Telegram group even suggested that they might be interested in doing just that. Others started asking about the possibility of setting up mining pools within the community to mine on these blockchains and then be part of the dead coin buy out.
Mining by Proxy Incentives
Looking at the price that CoinJanitor would be paying per dead coin — only coins with a total market cap of $50,000 USD or less will be targeted, and the exchange rate will be determined with that market cap ceiling in mind — it is possible to see immediately that the mining by proxy option is not likely to be profitable:
• Dead coins are worth fractions of a cent. Depending on the mining algorithms and difficulty adjustment, if enough players start mining them to trade them for JAN tokens, they risk investing more money than the amount they would get back in JAN tokens.
• JAN tokens are supposed to appreciate as CoinJanitor buys more dead coins out, which means a diminishing return on mining on any dead coin chain in any case.
• CoinJanitor has access to its own mining equipment to help reactivate some of these blockchains so that their users can trade their dead coins in. Therefore, independent miners looking for JAN swaps might make it more expensive for CoinJanitor to buy out certain coins. The CoinJanitor team might therefore move onto a different buy out first, forcing independent miners to direct their mining power to a different coin — which involves downloading and syncing the blockchain in each case. This could be a headache for those looking to mine JAN tokens by proxy.
To Mine or not to Mine, that is the Question!
All these factors should prevent people who are looking for the mining by proxy alternative to abandon the idea altogether. They might be better off buying and holding JAN tokens than mining dead coins for the swaps. Nevertheless, there are bound to be people out there who will not be able to participate in the ICO, for whom the mining option might still seem attractive.
Those who mine JAN tokens by proxy, might be able to mine on certain dead coins before CoinJanitor gets to them. If they make the right bet, they might get their money’s worth, but these would-be proxy miners must be aware of the risks. They might end up playing the lottery with their picks, not knowing at which point CoinJanitor will come and sweep the coin they mined — to be part of the buy out, they must come in before the snapshot of the blockchain is taken . Nevertheless, it seems that the JAN token will earn the distinction of becoming the first ERC20 that can be mined by proxy, albeit inadvertently.
Website: https://www.coinjanitor.io
Telegram: https://t.me/CoinJanitor
Whitepaper: https://www.coinjanitor.io/wp-content/uploads/2018/03/CoinJanitor-White-Paper-v4.5.pdf
Onepager: https://www.coinjanitor.io/wp-content/uploads/2018/02/CoinJanitor-Two-Pager-Landscape-Light-v3.pdf
Twitter: https://twitter.com/CoinJanitor
Facebook: https://m.facebook.com/CoinJanitor-201490483964845/
Youtube: https://www.youtube.com/channel/UCXkaiV83H3gHy5DomxoZvGA
