Crypto Money Mining - What Is Crypto Mining

Once thought of as dead, browser-based cryptocurrency mining makes an unlikely return, coming back to haunt websites and their visitors.

Browser-based cryptocurrency mining activity exploded in the last few months of 2017. After many years of deathly silence, the catalyst appears to be the launch of a new browser-based mining service in September by Coinhive. This service wraps everything up nicely in an easy-to-use package for website owners and has injected new life into an idea that was long thought of as dead and buried.

Highlights of this blog

Browser-based cryptocurrency mining is not new; it's been around since at least 2011.

A surge in the cryptocurrency market in 2017, as well as availability of coins that are mineable using home hardware and easy-to-use JavaScript APIs, has led to a torrent of malicious browser-based mining affecting many well-known and lesser-known websites.

Mobile devices have not been spared from cryptocurrency mining, as witnessed by a 34 percent increase in the number of mobile apps incorporating cryptocurrency mining code.

Tried, tested, and buried

Browser-based mining, as its name suggests, is a method of cryptocurrency mining that happens inside a browser and is implemented using scripting language. This is different compared to the more widely known file-based cryptocurrency mining approach which involves downloading and running a dedicated executable file.

Browser-based mining dates back to May of 2011 when an innovative service called BitcoinPlus.com was initially launched—back when Bitcoin was cheap and mining was easy—not to be confused with another cryptocurrency known as Bitcoin Plus.org (XBC). That service was in many ways remarkably similar to its modern reincarnation, Coinhive. It used JavaScript code for pooled mining and website owners could sign up to the service and embed these scripts into their web pages to make page visitors mine for them. The big difference is that back in 2011 BitcoinPlus.com, as its name suggests, mined for Bitcoin (BTC ) whereas the current browser-based miners like Coinhive are mining for Monero (XMR)—a newer, privacy-focused cryptocurrency. Back in 2011, before the advent of ASIC mining in 2013, Bitcoin was still in its infancy, mining difficulty was relatively low, and cryptocurrency prices were even lower. It was (just about) possible to do some mining with home-grade hardware.

Even though it was possible at that time to mine for Bitcoin via BitcoinPlus.com, the reality of the situation was that it was largely a futile exercise. The reward was minuscule compared to the amount of mining power and electricity required. Of course, this was back in the days before Bitcoin prices shot through the roof—in June 2011, Bitcoin reached the then lofty heights of almost US$30.

Due to this fundamental profitability problem with browser-based mining, it soon withered away. However, the idea was once again revived in December 2013 by a group of MIT students in a project called Tidbit—ostensibly touted as an alternative way for website owners to raise revenue. Once again, this project didn’t last long, as soon after it started the New Jersey Division of Consumer Affairs stepped in to investigate the fledgling company on charges of unlawful access to "a person’s computer processing power." This resulted in a long drawn out case which was finally settled in 2015.

The case for browser-based mining wasn’t looking good. The growing problem of profitability was made even worse by the increasing use of ASIC miners. The advent of ASIC miners dragged bitcoin mining out of the realm of home users and into an industrial age dominated by the massive mining farms that we are more familiar with today. After the demise of Tidbit, the idea of browser-based JavaScript cryptocurrency mining largely died away once again.  

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Fast forward to September 2017, the cryptocurrency landscape compared with 2013 had changed drastically. In April 2013, the cryptocurrency market only had a handful of coins and the total market capitalization was just $1.5 billion. The market for cryptocurrency was extremely limited and illiquid, meaning that even if you got some, it was not easy to turn it back into fiat currency for spending. Contrast that with September 2017 when the market capitalization stood at an incredible $166 billion spread over more than a thousand different coins.

Together with the diversity of coins to choose from in 2017, there was also now a diversity of coin reward mechanisms. Some, like Bitcoin, can still only be mined via a proof-of-work (PoW) process using dedicated power-hungry ASIC hardware—though there have been attempts to change this, with the various hard forks such as Bitcoin Gold (BTG) and Bitcoin Diamond (BCD), to bring in GPU mining. Other cryptocurrencies like Monero, Ethereum (ETH), Ethereum Classic (ETC), and Dash (DASH) can be mined using retail-grade GPU hardware found in many home computers. There are also some that are more suited to CPU mining; these include Monero and Verium Reserve (VRM). The trading environment is massively different too; it’s now much easier to move between fiat currencies and cryptocurrencies, making the latter more useful and valuable.

It's against this backdrop that Coinhive released its browser-mining scripts designed to mine Monero, effectively bringing the idea of browser-based mining back from the dead.

News spreads fast

Coinhive is marketed as an alternative to browser ad revenue. The motivation behind this is simple: users pay for the content indirectly by coin mining when they visit the site and website owners don't have to bother users with sites laden with ads, trackers, and all the associated paraphernalia being downloaded to the browser. Users hopefully then get a cleaner, faster, and potentially less risky website (remember malvertising?) to use, and everybody is happy. What could go wrong?

Soon after the release of the Coinhive service, the hash rate for the service started to climb, and quickly too. Hash rate is the number of hashes calculated by the combined power of the mining pool and is measured in the number of hashes per second—usually in units of millions (MH/s). Hashing is the process of carrying out cryptographic hash calculations which are used to help process transactions. Miners who participate in a mining pool get paid a share of income generated by the pool.

Start of a torrent

The first high-profile site to start using Coin mining was The Pirate Bay torrent website. The Pirate Bay has had a checkered history and, being a highly trafficked site (global ranking #161 with 290 million visitors in the last six months), has been looking for alternative ways to monetize its considerable traffic. Its initial attempts at browser mining were quickly spotted by users and they were not too happy about it. At least in the case of The Pirate Bay, this was a case of the site's owners making a decision to use Coinhive.

Advent of privacy-focused cryptocurrencies

Privacy is important if you want to mine Coins maliciously, in order to ensure others cannot easily follow the money trail back to you. Monero, which came to the market in 2014, can offer a high level of transaction privacy. Unlike with most other cryptocurrencies that use public transparent blockchains where transaction addresses can be easily viewed by anyone, Monero does things differently. By default, everything is private, including the amount in a transaction, who sent it, and who received it. There is an option with which wallet owners can selectively reveal some information via what's called a view key, but this is not a feature that cyber criminals are likely to want to use.

Ease of use

As mentioned earlier, Coinhive provides a very neat and easy-to-use package for people to get involved in Monero mining. All you have to do is add a few lines of script to your website code. You don't have to make website visitors download and install executable files.

The cryptocurrency growth factor

As we noted earlier, the value of mining rewards are not great, at least not initially. To get a better understanding, we need to look at the profitability of this activity over the longer term and take in the macroeconomic picture to get a true sense of the reward. The value of cryptocurrencies like Monero is going up dramatically. So far in 2017, the price has gone from $13 to over $300. Under these circumstances where the price of Monero can go up substantially in dollar terms over a relatively short time, mining Monero can become an attractive proposition. A small amount of Monero mined today could potentially be worth a great deal more in a matter of months (conversely it could also drop significantly depending on the health of the overall cryptocurrency economy).

Mining on the go

Malicious cryptocurrency mining isn't just confined to desktop computers and servers. Always-connected mobile devices are also a growing target. We have even seen growth in Coin mining on mobile phones in recent years. In 2016, we discovered 26 different Android apps that were mining cryptocurrencies. So far in 2017 we have found 35, which is around a 34 percent increase.