You may not have realized it, but Coinhive has been in the news the last few days. Recently, the Pirate Bay (you know, where you go to get your Linux distribution torrents) had a small user revolt after trying Coinhive as an alternative to advertisements. Just this week, users found Showtime was running Coinhive’s code on their site without their knowledge. So what’s this company all about?
Got Any Spare Compute?
The company pitches this as an alternative monetization strategy instead of running ads. Their argument (I think) is that ads are terrible and slow loading a webpage anyway. Why not mine Monero instead of loading up a terrible autoplay video ad? It’s an interesting proposition.
Coinhive offers a number of ways to do this. One is support for shortlinking. Instead of using bit.ly or another service, Coinhive provides a short URL. When clicked the client computer has to solve a “proof of work”, essentially solving hash functions as part of a mining pool. This can be customized from as low as 256 hashes with no upward limit (other than patience). Users are greeted with this while they wait for their site to load:
On my 2016 MacBook Pro, I was able to load a 256 hash shortlink in about 13-18 seconds, meaning I was getting a hash rate of about 14-20 per second. If you’re into crytpocurrency mining, that’s beyond paltry.
Another approach is to have the miner running on your site at all times via an embedded script. This is what The Pirate Bay tried to do explicitly and Showtime did surreptitiously. This can be configured by a number of parameters, includes a hash limit and number of threads to use. Coinhive is also supposedly changing their API to make sure visitors are told their CPU is going to be used for mining. This might not be much use for a small blog without a lot of traffic, but Coinhive is pitching it as a good source of revenue for video content providers or game platforms that have users parked on a single page for a while.
The company also proposes using their “proof of work” hashing as an alternative to captchas. Basically the extra time to mine would serve as the same kind of determent to a bot or malicious actor. This seemed the least objectionable version of their product, but also the one that would bring in the least amount of money.
Dollars and (Fractions of) Cents
So what could you expect in terms of payment? The current rate, after Coinhive takes it’s cut works out to $0.015 per one million hashes. At the hash rates I’ve seen on my laptop, that means I would have to sit on a web page for about 18 hours to hit one million hashes, or click on about 4,000 shortlinks (at the minimum 256 hashes).
Of course, this all varies based on the value of Monero. Today, it sits at about $95. This has fluctuated wildly this year, from a low of $10 to a peak of $140.
This might prove to the the Catch-22 of Coinhive. This requires a lot of volume to monetize, but any site with this kind of volume probably can’t risk the extreme swings in value Monero is experiencing.
Besides from technical issues, Coinhive has a bit of a public relations problem. If sites are going to try to implement mining without letting users know, it’s going to cause a lot of ill will the company can ill afford. They’re taking steps to avoid this, but for a company with limited name recognition, they might be getting the wrong kind of press right now.
The other problem for their business model comes with that 30% cut. While they do a really good job of making the barrier of entry to their service extremely low, it also seems relatively easy to replicate. Any organization of the scale needed to really monetize this model might do well to figure out a way to implement this tech on their own. Right now Coinhive is stating this rate isn’t negotiable, but I wonder how long that will be the case.
Overall though, Coinhive shows how the idea of the blockchain is still emergent. It’s a weird blockchain project, and in its ambition, and perhaps audacity, it reminds me a lot of the early web. The company probably isn’t going to disrupt the online advertising industry, but it’s still a really interesting way to try.
Coinhive just released another tool for monetization, a simple miner UI to embed in webpages. In all honesty, it’s probably the least creative approach for what they are trying to do, but also the easiest way to try it out I suppose.