I’ve seen a few people ‘playing’ crypto apps over lunch where they just tap on the screen in exchange for rewards.
What does the crypto company get out of it?
In: Technology
In-app, purchases, ads, selling user data, and using your electricity to mine Bitcoin / other cryptocurrencies, of which they may pay out a small cut to the user. But the user is not going to come out ahead in terms of expected value.
Sticking with Bitcoin, Bitcoin mining works as a race to solve mathematical puzzles whose solutions are essentially random. Because it’s effectively random, it’s a numbers game: the more processing power you throw at the current puzzle, the higher the probability you’ll bruteforce the correct answer before everyone else on the planet trying to do the same gets there. Because of this winner-takes-all nature, individual miners striking it out on their own have very little chance of ever mining a Bitcoin, because the computational power they own is dwarfed and basically a rounding error compared to the computational power of big players who own giant farms of dedicated mining hardware which is optimized to mining Bitcoin. So people team up in pools: everyone in a pool combines their processing power towards mining the next Bitcoin, and when it’s mined the pool is structured in such a way that the proceeds and split among the participants, proportional to the amount of processing power they contributed.
So those apps that run on your devices to mine Bitcoin? They have your device join up with a pool set to pay out to the app owner, and use your device’s processing power and electricity to help them mine Bitcoin, and might pay you a small cut.
But it’s basically a scam. Even if you dedicated your device to mining Bitcoin all for yourself, you would lose a ton of money. Running compute-intensive tasks is never free. It takes electricity, and electricity costs money. When you do the math, the expected value of dollars worth of Bitcoin mined per dollar spent on electricity, it’s pretty much almost negative. It will be very negative for a tiny device like a phone. But for the companies putting out these apps, it works because they’re not the ones paying for a farm of inefficient phones and the electricity they consume; the users are.
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