Bluebox - a replacement for ASIC miners?
You might, or might not, have noticed that Transcendence/Telos founder Pascal Papara is about to release yet another device called Bluebox.
Since I used to mine Cryptos using ASIC miners until earlier this year when it stopped being profitable, I will be explaining bluebox from ASIC miner users point of view, since I see a lot of similarity between these two. Hence the title suggesting bluebox being replacement for ASIC miners.
As this is a new kind of device, I will explain you what it is, as far as i have understood it, which means that I might be wrong in what I say here.
I have also simplified some things, as example I am talking of 50/50 split, when in reality it is different, but from explanation point of view, it is good enough explanation.
“proof of work” and “proof of stake” concept
If you wish, you can skip this part and jump directly to “what is bluebox, and what does it do?” part. For to drive a car you dont need to know how motor works, all you need to know is that you need to turn a key to start it. However, I personally do like to know a bit more usually, and for this reason this explanation of how “motor” works.
There are different kind of Cryptocurrency concepts existing. All those coins that you have ever mined, including bitcoin, are called “proof of work” concept coins. Idea with this is that coins are being calculated (mined) out, which is like finding the next coin. To do some calculations, requires work, and therefore the name “proof of work”.
Bluebox has to do with the “proof of stake” concept however, which is slightly different, yet, very similar.
In “proof of stake”, instead of coins being found out, they are created automatically in set intervals. For example, they could be set to come out every 10 minutes, like bitcoins coins are found in average.
Because no work is required, there naturally are no miners. Instead, there are so called Masternodes which are servers that keep the network up.
Every time new coins automatically come out, they are randomly given to one of the Masternodes.
This is also another difference to “proof of work” coins, since while in those the more powerful machine you have, the better chance you have in finding next coin, in Masternodes case there is no difference between Masternodes, but they are all equal.
From miners perspective you could think that situation would basically be same as in bitcoin if situation would be that everyone would be using the same miner model. Because if everyone would be using Antminer S9, and there would be no other machines available, then everyone would have equal chance in finding the next coin.
And if you would like to get better chance at getting those coins, you would buy more of the same machines.
This would be same as it is with masternodes. If you want to have a better chance at getting the next coin, you cant get more powerful masternode, but you can set up another masternode for yourself. This way you would have two masternodes, and hence double the chance.
By the way, if you wonder where the “proof of stake” name comes from, this has to do with the fact that to set up a masternode, you need to lock certain amount of coins to that masternode. For example in Telos case you have to lock 1000 Telos coins to be able to run it as a masternode. Therefore the name proof of stake, since you are staking those 1000 coins there, that basically the principal idea is that new coins come to already existing coins.
Differences between “proof of work” and “proof of stake” coins
“proof of stake” has several benefits when compared to “proof of work” and only very few downsides.
One major difference is that when I was mining Bitcoins, and then I started to want to mine Litecoins, I had to buy another ASIC machine to be able to do so.
With “proof of stake” however, as long as i have a server where to run a Masternode, I can use that server to run any “proof of stake” coin I want. And not only that, I can actually run even several different coins masternodes in same server.
This, in addition with each Masternode being equal, brings another big benefit. For if you bought one of those Antminer S7 machines couple of years ago, they were still pretty much a powerhorse. However, when S9 models came, these S7 machines started becoming obsolete, and now with S11, there is no use for S7 machines anymore, they are done, competely, they are simply not powerful enough to keep them on anymore. By otherwords, when new more powerful ASIC machines come out, it tends to make the older ones outdated and useless.
Since Masternodes are always equal, that there is like there would be only one model of machine existing, this means that same server can be relevant even 10 years later.
As a matter of fact, some people are actually running Masternodes with their over 10 year old laptops.
Since you are able to use your 10 year old laptop for running a Masternode, this also shows you another benefit again. While ASIC Miners were often taking much more than 1000 Watts of power, Masternode can easily take even less than 50 watts to run.
But not all is good however.
For one nice thing about “proof of work” was that you could easily calculate how much money you are going to be making with your machine. That you would already know in advance that based upon its power, this is the amount of bitcoins it is going to mine in a day.
While you basically can do same with the Masternode coins, it however is not that simple. For when it comes to Masternode coins, you do not get to premium coins anymore, unless you have real deep pockets.
For as mentioned, you usually need for example 1000 coins attached to your masternode to be able to run it. While in Telos case that means investment of 3–4 USD, if we take one of the premium coins, story is different. For example DASH coin is both “proof of work” as well as “proof of stake” coin. Sure, you can set up a masternode for DASH coin, and it does make a lot of money. But price of one DASH is around 100 USD, meaning that to buy the required 1000 Coins, you would need to pay 100 000 USD to get them. That is not something many can afford. Hence you need to get to coins that are still relatively new and cheap and hope for the best that they become new DASH in future, instead of getting directly to mine something like DASH that you already know is succesful.
So unlike ASIC miners, Masternodes are not instant cash machines. They actually basically work exactly opposite when succesful, that in ASIC you first get more, and then less and less over time, in Masternodes case you first get only little money, and then, hopefully, more and more in the future.
Next drawback has to do with exactly this. For most new coins fail, either because they a hoax, or because they simply fail. Therefore you might need to set up masternodes for several different coins before you finally succeed (if you ever do) in getting in to one that is profitable in long run. For once again, due to premium coins premium price, average users do not get to cherry pick their coins, unlike in “work of proof” concept where you can directly go and mine the big one - bitcoin.
Another drawback compared to proof of work is (or actually used to be, since this is one of the things bluebox is going to fix for you) that setting up Masternodes is not as easy a task as setting up ASIC miner to mine for you. I believe most interested people have stayed out of “proof of stake” because they did not have enough know how to set up a masternode.
For on the other hand while premium Masternodes are expensive, to set up a masternode for Telos coin for example, might cost you just 5 USD in total, everything included. Unless you put it to your old laptop in which case it is only the before mentioned 3–4 USD. Compare that to ASIC miners 1000+ USD ticket as it used to be.
Now that you have learned how the motor works, I will get to Bluebox finally.
What is Bluebox, and what does it do?
Bluebox is very much to “proof of stake” coins, what ASIC Miners are to “proof of work” coins.
Bitcoin used to be difficult for average user. I remember at very early days of bitcoin, when there were no ASIC miners around yet, I was planning to mine some coins. But when I used couple of minutes to google it, I could not even figure out how to get the wallet.
As I did not have any other motivation but just bit of curiosity to it, i simply forgot about it and several years later noticed i lost a chance for couple of millions in that very moment by giving up too easy.
At later point, bitcoins and the rest became much more accessible to average user but to me the mining did not really begin until friend of mine showed me hes ASIC miner. Now this was easy enough that I would just get one, turn it on, connect it to internet, make couple of necessary accounts, and I was good to go.
In my opinion, what situation today is with setting up masternodes, is pretty much same as was to me in bitcoin when i could not even set up a bitcoin wallet for myself.
Bluebox however, is going to change that.
From users point of view, it works just like ASIC miner. You get this device, like you got for example Antminer S9, you connect it to internet, like you did with Antminer S9, and I suppose you have to tweak some settings similarly to Antminer S9, and you are good to go. Then you just wait for the coins to come.
However, since there are fundamental differences between “proof of work” and “proof of stake”, there are things happening under the hood.
If you read my writing above about how the motor works, I pointed out that there were two difficulties in “proof of stake” coins. First one was finding to which coins I should set up masternodes for, and another problem was in setting the masternode itself up.
These problems have been solved with bluebox very simply and brilliantly. It is actually amazing that no one else thought of this before.
Simple solution is that when you connect your bluebox to internet, from that point on, your bluebox will be remote controlled by the company through internet.
This means that you do not need to touch anything, but they will both, look at new coins for you, as well as set up masternodes for you. They even buy and pay the necessary coins needed to set up the new masternodes.
And this all makes very much sense to them.
For thing is, when it came to “proof of work” you could have rented some space and put up a whole load of machines to work in that same space to make a mining farm and then rent some hash power to others.
However, when it comes to “proof of stake”, part of the security is in that those masternodes (servers) reside in geographically as many different places as possible. So how are you going to set up a masternode farm then? Well you dont, except with bluebox they actually are. However, instead of having a farm in one location, they are spreading this farm to all the users. That basically we, the users have one machine, but they, the company, they basically have a farm through their remote access to all the blueboxes residing with us and are able to control what is happening with them. This way they have machines spread around globally, and yet have them in use.
This is also the reason why you dont get to keep all the money coming from your masternodes, but there is a 50/50 split in income. This however in my opinion is an excellent deal, and to all sides even.
You pay the machine, this makes it possible for company to have lots of machines. They provide you the work and also pay the coins. Work is obvious, they are likely to be much better at figuring out what coins will be profitable than you are, plus you might not even have time to keep an eye on your masternodes to set new ones up and take old unprofitable ones away.
Paying the coins needed for setting up a masternode is probably a practical reason. For imagine how much work it would be to get every time they decide to set up a new coin for all the users to pay those coins themselves? It is simply much easier for company to simply buy them themselves, we are anyway, i suppose, most of time talking about new coins, where set up coin cost might be less than 10 USD. So why bother. Besides, user paid the machine already, so company might as well do a little investment too in paying the coins.
If you wanted to make a “proof of stake” farm, then this is how you do it. We are basically talking of worlds first “proof of stake” farm here with blueboxes. And it is an absolute win-win situation to all sides, as long as it works.
As you can see, it is not much of a stretch to call this a new kind of ASIC miner, since from users point of view it is very much same as using an ASIC miner, except that it is “mining” “proof of stake” coins instead of “proof of work” coins.
However, it is in many ways better. First of all, it wont get useless in couple of years because of more powerful machines appearing, but it will likely be valid machine even 10 years later. You also are not trapped in mining only one coin, but you can “mine” any of those “proof of stake” coins, even the ones that are only going to come 10 years later, supposing “proof of stake” concept survives of course.
Instead of using 1000+ watts of power, you are likely using less than 50 watts. Also, while miners used to cost over 1000 USD when they were cheap and still good, bluebox pricing starts from only around 300 USD.
There is however one drawback to some countries that you need to take into consideration. For to be able to use bluebox, you need 10 Mbit upload speed for your internet connection. This can be a problem in some countries where they are restricting upload speed.
My own opinion of this machine is that as far as i have understood it right, and it works out, everyone who gets one of these machines have a very good chance of making a living from this bluebox. For basically we are talking of a small scale lottery here.
Company keeps setting up masternodes for new coins, then most of these fail. Okay, they get rid of them and set up new ones. It might take a while before they hit it, but i guess, eventually they will hit on succesful coins, one by one.
If you think that DASHes price have currently been going around 100 USD, then all that needs to happen is that just one of those coins in years becomes as succesful as DASH. Or imagine if there are several masternodes running in your bluebox that are all as succesful as DASH. That could be quite nice income.
I basically expect bluebox to yield only very little income at start. But lets take three years later. During that time they might have already hit couple of at least moderately succesful coins, and profits could well be 100s of USDs a month already, and likely to just keep increasing in future as long as cryptocoins keep going forward and “proof of stake” concept is not replaced by something else.
If you are concidering of buying an ASIC miner, or wanting to get back to ASIC mining, then my advice would be to buy bluebox instead.
To order and check more about bluebox:
If you want to read more articles from me, you could check one of these: