All great stories start with “Once upon a time”.
In this case, it was 2008 and Satoshi Nakamot has just published his White Paper in which he set out the plan to create a decentralized digital currency.
It was the dawn of a new era. And the new hero was not a prince or a privileged man, it was the Miner. For it was his duty to maintain the consensus in the network and to foster the rise of a decentralized financial empire.
The metaphor of crypto-miners started with the comparison between Bitcoin and gold. Wishing to create an universal currency, Satoshi looked no further than gold. Both are finite in quantity, both are timeless and, most important, they both require an effort to get. But while in the case of gold, the effort was to take it out of Mother Nature, for Bitcoin, it was the duty to verify the transactions between peers. Seen as such, mining, although it has lead many to “gold”, it was never meant to be a solitary mission.
Mining was designed to be a social deed for the greater good of the crypto-community — one would be using his own electricity and CPU power to help build consensus within a social network, to get rid of unneeded intermediaries.
How then, did it become this?
Some weird side-gig you run alone, in your basement?
The culprit was not just technology, but the human spirit.
Mining is supposed to be difficult. As the total hashing power of the network increases, so does the difficulty of obtaining a Bitcoin. And people are both ingenious and driven by profit.
First they realized that using the GPUs is more efficient than using the CPU. Then, they realized then can do better by using FPGAs, which are much more energy efficient. Then they realized they can increase their hash rate while decreasing the energy consumed by using application-specific integrated circuits, or ASICs, for short.
But while gaining efficiency in terms of speed and energy consumption (both of which translated into profit and faster return of investment), they lost sight of a critical social aspect:
Mining is the only other way of acquiring a crypto-currency, besides buying it. And by making this topic a very esoteric IT niche with a very steep learning curve, they limited the rate of adoption only to those with a deep tech understanding, not only in terms of software, but also hardware.
As the competition sharpened and the hash-rate increased, dedicated and very expensive hardware become the only way to mine; not only Bitcoin, but basically any crypto-currency with a decent efficiency. And thus, what was meant to be a decentralized haven, slowly became a centralized, hardware intensive industry, in which the four biggest pools control over half of the hash power.
It became the territory of crypto-nerds, and no one else.
This is what WebDollar will change.
Our grand vision is to design and deploy a cryptocurrency that will truly act as a currency of the internet, not only as an investment asset. And for that, we must target mass digital adoption.
As this great article points out, if we consider the target group for cryptocurrency adoption (adults with internet access), and we compare it with the current rate of adoption, we don’t even reach 0.5% from the total addressable population.
And no, that is not just due to price volatility and other economic or regulatory aspects. Probably the two most important factors hindering mass adoption are:
- The steep learning curve needed to mine & use cryptocurrencies
- The mostly closed nature of crypto-enthusiasts circles, starting with miners.
In order to tackle these issues, our solution revolves around two key concepts:
a. Simplicity in both usage and mining
b. Empowering the community with incentives to expand towards regular citizens, without any special IT skills.
This is why we designed our concept of “social mining” — a view in which we use both technological and social incentives to stimulate the mass adoption of WebDollar.
First, we limit the advantage that centralized, dedicated mining farms would have in mining WebDollars by using an ASIC-resistant, GPU-unfriendly hash function — Argon2d.
Secondly, we simplify and incentivize the creation of pools. From a very technical process, available only to a handful of people, creating the vital backbones of the network becomes something one click away.
By being able to easily create a pool and gain a small percentage of the WEBDs that the miners in your pool “find”, professional miners are stimulated to expand their pool size, inviting friends and relatives to mine in their pool, by a simple link&share. Instead of investing into a mining rig worth a few thousand bucks, one is better of setting up a pool, developing and tending to network of non-technical people that just open their browser (or terminal) and mine WebDollars while surfing the internet, doing their homework or playing their favorite videogame.
The beauty of this system is that the early adopters, which will most likely be people already in the crypto world, would have all the reasons to run the pools: they would gain a passive income, they will spread awareness on WebDollar and thus, help its market capital (and price) go up and, most important, they will decentralize the hash-power throughout the network and thus increase its security.
It’s a win-win-win: The pool owners win, the community wins, the pool members win.
As for the simple, not so tech-savvy miners, they will just have to enter a page.
To sum up, our concept of Social mining relies on stimulating mass awareness and simplicity in use, thus opening the doors for mass adoption.
The Pool Admins will be incentivized to manage pools and expand their miners network by the fact that pools bring a passive income, more than it would bring investing into an expensive mining rig.
The pool users will also benefit joining a pool and not mining by themselves; as the difficulty of mining WebDollars increases, gaining a reward by yourself would take more time than it would be reasonable for an amateur, part-time miner. Pools, with their combined processing power, would be the solution to monetize that extra processing power that your PC (or smartphone) has to offer, without having to commit to a mining rig.
With WebDollar, mining would not be just for the chosen few. It would be as Satoshi himself envisioned it — a profitable way to do a social deed — offering trust within a decentralized financial system.