Bitcoin Miner is a much older game than one would think by looking on the App Store. It was developed over four years ago by a small team who saw the latest bullrush on Bitcoin and saw an opportunity to create a game about mining for cryptocurrency. We spoke to Paul West of Fumb Games about the Bitcoin Miner journey: “We’d already created a similar game called Zombie Labs, where you dug zombies out of the ground. We thought, okay, what would be cool is if we made a Bitcoin version of this”
In Bitcoin Miner, it’s your job to make as much money as possible, in the usual idle clicker way of purchasing new tools and upgrades. What starts as an underground bunker with one chap mining for Shiba Inu, becomes an empire where up to ten coins are being mined, including meme coins like Doge and powerhouses such as Ethereum and Bitcoin.
Unfortunately, four years ago, things were very different and crypto wasn’t in regular conversation yet. “We went to launch it and we couldn’t” Paul laughs, “Google and Facebook, which were the main marketing channels for app promotion said ‘absolutely no, you cannot promote cryptocurrency-related products’ and of course, we replied that nothing in the game is real, it’s just the artwork which looks like crypto.”
So, the game stalled because Fumb Games couldn’t promote it to new players. The game that exists today is very similar to the one created over four years ago, however now that society is becoming more comfortable with crypto the game is seeing another big push with one new addition. Now you can earn actual crypto while you play.
“We were approached by Zebedee, who are the Bitcoin payment provider, saying they’d like to work with us.” As you play Bitcoin Miner you can earn Satoshi which is a fraction of a Bitcoin, and when we say a fraction we mean it, a Satoshi is 0.000001 BTC. These Satoshi appear occasionally from your miners, along with other tappable power-ups, and once tapped they get banked in a holding area until you withdraw them to your Zebedee wallet.
I’ve been playing the game since its launch a few weeks ago and I’ve banked 609 SATS, or $0.17. You’re never going to get rich, but that’s not the point. This is just a game, with the blockchain and crypto elements sown within. Paul is proud of what the game is doing, because to him, the gameplay came first, “we gave the game a bit of a facelift after Zebedee got in touch – those miner sprites are my original art from years ago! – now we’re the first Bitcoin mining simulation that actually pays you Bitcoin.”
The Satoshis will never really amount to much, even if you’re hammering the game constantly. I’ve found myself a little addicted to watching my miners unearth coins, in the same way I got hooked on other idle clickers or, as Paul calls them, “enterprise games.”
It’s the ideal game for five-minute breaks during the day; you open the game, upgrade some miners or open new mining sites, you can tap the green arrows which pump the coin price up, or there’s a purple split arrow which duplicates the coin. There are treasure chests which give pieces of coins that, when assembled, upgrade the value of your coins, and watching ads can reward bonuses.
You might ask where these Satoshi come from, which is why we asked Paul: “it comes directly from our revenue, going back to the community. We want this to be ‘if we win, then you win.’” The game does feature advertisements, which Paul knows can be a contentious point to players, but he hopes they understand that the interstitial ads are creating the revenue supplying the Bitcoin.
It’s all about making money, in the same way your idle theme park or bakery game is. Except here, you can see actual money being paid out. “It’s like the cherry on the top” says Paul, “the game comes first, the Satoshi is simply a bonus.” Bitcoin Miner can be seen as a proof of concept to other developers, but it should also be seen as a great example of developing alongside Web3, rather than in reaction to it.
“Web3 friction points are everywhere,” says Paul as we discuss how his game can help others learn about cryptocurrency mining and blockchain, “we think this is a frictionless way to learn, you can go from knowing nothing about Bitcoin, to earning it within 3-4 minutes.” Bitcoin Miner makes everything very simple, even setting up a Zebedee wallet is a breeze.
“There are a lot of games out there that are Web3, but there are so many hoops to jump through; setting up a wallet, buying an NFT or staking tokens in the game” Paul is talking about the general Web3 gaming scene, which makes it difficult for everyday gamers to jump in and try new games. With so many upcoming games, there’s little to see and play, “they’re speculative products, right? They’re investments that people are making.”
Bitcoin Miner is anything but speculative. The gameplay may have been seen many times over, underneath various facades. That’s no bad thing, it won’t be for everyone, but for those who lean towards idle clickers or those interested in how crypto works, it’s an ideal clicker. A stand out comment from Paul is one to end on: “you’re not playing to earn, you’re playing and earning” and this seems to be a path that many developers should follow if they’re to appeal to ‘Web2 gamers’.
A quick glance at the largest cryptocurrency tokens reveals a host of diverse offerings, each with markedly different approaches when it comes to their underlying use of blockchain. From those that focus on being investment vehicles to others that specialize in hosting distributed applications, how exactly do these blockchains differ in their approach?
Bitcoin
Even the most casual follower of technology will be familiar with Bitcoin, which for many might also be practically synonymous with cryptocurrencies in general. That’s reflected in the fact that other cryptocurrencies are commonly grouped together as “altcoins” versus the monolith that is Bitcoin.
Its popularity stems partly from its first-mover advantage. Its journey to becoming by far the largest cryptocurrency started with its release in 2009. Developed by a mysterious person or group known as Satoshi Nakamoto, the currency is well known for its significant price fluctuations (topping out at around $69,000 in November 2021) as well as its pioneering use of blockchain technology.
While we won’t dive too deep into the specifics of how blockchains work, in the case of Bitcoin the work of joining together the eponymous, unalterable blocks is done via a process known as mining. To ensure that new data is permanently stored on the blockchain, computers on the network compete to solve increasingly complex mathematical problems. The miner who successfully solves the problem is then given Bitcoin as a reward. The chance of winning is directly correlated to the amount of work that can be done on the problem – hence the emergence of gigantic Bitcoin farms in areas where energy prices are low.
Bitcoin’s prominence means many of the negative headlines regarding blockchain technology (such as its outsized impact on the environment) involve the cryptocurrency in some way. It’s also recently been the centre of controversy after the nation of El Salvador adopted it as legal tender – a move the IMF condemned.
Ethereum
Where Bitcoin is focused on digital currency, Ethereum sets itself apart by virtue of its programmable nature. The open-source platform has become well known for its support of decentralized applications, smart contracts, NFTs (non-fungible tokens), as well as the ubiquitous cryptocurrencies.
That’s all accomplishable thanks to the fact that Ethereum is a so-called “Turing Complete” blockchain. What that means is that it can be coded to perform any task required of it via decentralized applications (dapps). Dapps include things like games and exchanges, all running securely on the blockchain. As a result, they gain all the security and uptime benefits of the technology – with all their code and data hosted, secured and verified by computers on a distributed network.
Then there are smart contracts, programs deployed on the blockchain that automatically execute agreements based on the rules that are coded into them. Thanks to that, they can be used as infallible intermediaries for executing transactions, ensuring that everyone involved is certain of the outcome once the prerequisite conditions are met. Ethereum is also well known for powering NFTs (non-fungible tokens), which use the blockchain to confer proof-of-ownership onto digital items such as digital art, video game items, music and much more besides. The principle is much the same as cryptocurrency, only an NFT points to a unique asset, while any given unit of cryptocurrency is identical.
Like Bitcoin, Ethereum only functions thanks to the energy-intensive process of mining – as they share the consensus mechanism known as “proof-of-work”. However, the platform is currently planning a raft of upgrades to move to another form of validation known as proof-of-stake. The platform is hoping that will solve scalability problems hampering its dapps. Currently, Ethereum can only handle somewhere between 15-45 transactions per second. To ensure that transactions get through such a congested system, exorbitant transaction or gas fees have to be paid by users. With upcoming upgrades the blockchain is targeting 100,000 transactions per second, meaning those associated fees should fall.
Solana
Like Ethereum, Solana is a generalist blockchain, supporting cryptocurrencies, decentralized applications, smart contacts and NFTs. It was founded in 2017 and is operated by the open-source Solana Foundation based in Geneva, Switzerland.
Solana’s blockchain emphasizes throughput – with transactions-per-second around 2500 compared to Ethereum’s 30. It achieves this via a process known as proof-of-history, whereby every transaction is given a cryptographic timestamp. That ensures there is a verifiable sequence of transactions without requiring the work of every node to validate it, meaning less computing power is required and lower gas fees have to be paid.
Unlike Ethereum and Bitcoin, however, it utilizes a proof-of-stake consensus mechanism. That sees users staking cryptocurrency to become validators. They are then randomly chosen to create new blocks as well as check and confirm blocks created by others. The tokens they have staked can be taken away if they approve fraudulent transactions, incentivising them to validate correctly – at which point they receive tokens and the transaction fees within a block.
Terra
Finally, South Korea-based Terra was founded in 2018 by Do Kwon and Daniel Shin. The Terra blockchain specializes in facilitating so-called “stablecoins”. These are cryptocurrencies that track the price of real-world fiat currencies. The blockchain supports two main complementary types of cryptocurrency tokens known as Terra and Luna respectively. The Terra tokens are pegged to the price of real-world currencies (TerraUSD being pegged to the United States Dollar).
That’s achieved thanks to the Luna token, which serves to stabilize the price of Terra stablecoins. Users must “burn” Luna to mint Terra and vice versa. The system algorithmically incentivises one process over the other to keep the currency stable. While the price of Terra is maintained, as the use of the blockchain grows the price of Luna increases.
In line with all this, the Terra network touts its decentralized finance (DeFi) credentials, a movement to remove third parties from financial transactions. As such it supports decentralized applications including decentralized savings protocol Anchor.
Summary
Even in the relatively early days in which we live, the inherent flexibility of blockchain technology has resulted in a broad swathe of use cases. While the blockchains we have discussed are leading the market at present, disruptors with pioneering new approaches to using the technology can be expected to join the pantheon at any time – with services like Chainlink’s oracle platform being just one potential bet.
Blockchain. While you may think the term has reached maximum saturation, expect it to become even more inescapable over the next few years as more and more solutions are built on top of it – be they dapps, DAOs or NFTs. Which makes understanding exactly what blockchain technology is on a fundamental level fairly crucial. Speaking of…
What is a Blockchain?
A blockchain is fundamentally a digital ledger that records information and stores it securely, verifying its authenticity through cryptography. Crucially, the work of updating the blockchain is a shared endeavour, carried out by computers across a network. That means a blockchain can be a secure and authentic record while remaining decentralized.
As you may be able to tell from the name, blockchains consist of “blocks” of data, joined together in a chronological chain that tracks precisely where assets are moving to and coming from. Once a block is created, it cannot be removed or altered, meaning that its position in the chain (as well as the date and order of transactions it contains) is permanently recorded.
The physical hardware running the software of any given blockchain are referred to as nodes. Their responsibilities range from the aforementioned validation of transactions and setting the state of the blockchain to serving as the endpoints that enable users to actually access applications on the network.
Of course, as a decentralized network, users need to be incentivized to maintain the blockchain. That is usually financial, in the form of newly created cryptocurrency or from transaction fees paid by other users. These “gas fees” pay for miners to use their hardware to create the new block necessary.
Consensus Mechanisms
All of this is only possible thanks to consensus mechanisms that ensure every node agrees. Depending on the specific mechanism (such as proof-of-work or proof-of-stake), a blockchain grows via a process known as mining or validating.
Proof-of-work mining involves computers on the network competing to solve increasingly complex mathematical problems in order to securely add new blocks onto the blockchain. Winning the race is a game of chance, but your odds are significantly improved the beefier your hardware, meaning mining is an energy-intensive affair. The miner who succeeds in creating the block is given new tokens – as well as the transaction fees contained within the block.
Proof-of-stake validation, meanwhile, sees users depositing cryptocurrency to become validators in a process known as staking. They are then randomly chosen to create new blocks as well as check and confirm blocks created by others. Once a block is validated, the validator then gets tokens and the transaction fees within. The tokens they have staked can be taken away in the event they approve fraudulent transactions.
In both cases, new transactions are verified and recorded without the interference of one central authority. Proof-of-stake is viewed as a greener solution for blockchain construction, with Ethereum being one example of blockchain targeting a move from proof-of-work. It also helps solve another of the problems plaguing the technology: scalability. Ethereum can only handle somewhere between 15-45 transactions per second – with upcoming upgrades the blockchain is targeting 100,000 transactions per second.
Why use Blockchains?
With all that in mind, you might be wondering why you would go to the trouble of doing all that just to produce a ledger – hardly the most groundbreaking of technologies. The key innovation that makes blockchain such an intriguing technology, however, is the fact that it is decentralized. What that breeds is trust. With data stored and synchronized across the network, immutably, users can be assured that everything they need is present and correct – all without the interference of a third party taking its own cut.
This fact enables a number of exciting possibilities, perhaps chief among them smart contracts. Essentially programs stored on the blockchain, their immutable nature means that they are guaranteed to execute whenever the conditions programmed into them are met. That means they can be used to automate agreements, again without relying on a third-party arbiter.
Smart contracts can be used to power everything from games to decentralized finance applications, but one of the most exciting possibilities is their use in oracles. Oracles connect reality to the blockchain by using off-chain data, perhaps from a real-world sensor, to trigger events. A prominent example is Chainlink, which allows users to connect smart contracts to real-world information such as weather data – in turn enabling parametric insurance that reimburses farmers for reduced crop yields caused by drought after a weather sensor detects low levels of rain.
Who are the Big Players?
In terms of name recognition, Bitcoin is certainly the best-known blockchain, thanks to the precipitous rise of its eponymous cryptocurrency. Since launching in 2009, its pioneering approach has seen it become far and away the largest cryptocurrency by market capitalization.
For possibilities on the blockchain other than cryptocurrency, however, Ethereum has proved to be the most popular. Having launched in 2015, it has made its way to being the second-largest by capitalization on the back of its smart contracts, decentralized applications and non-fungible tokens. Open source, the blockchain refers to itself as “programmable”, with a dedicated programming language for writing smart contracts known as Solidity.
Among the also-rans, the largest blockchain to have implemented the previously discussed proof-of-stake consensus mechanism is Cardano. Then there’s Solana, the USP of which is its use of proof-of-history to increase throughput – with transactions-per-second currently hovering around 2500. Proof-of-history sees every transaction given a cryptographic timestamp to produce a verifiable sequence of transactions that doesn’t require every node to agree, resulting in less computing power being required.
Summary
Now you understand what a blockchain is, it’s well worth diving deeper into some of the many possibilities the technology enables. Take a look at some of our other resources to find out more about NFTs, virtual land and blockchain gaming, to name but a few!
AviTron, is testing out cryptocurrency as an in-world payment method in addition to its in-world currency, Tron.
The grid will be accepting Bitcoin and Dogecoin as payment for land rentals and in-world purchases, despite the fact that the currencies are highly volatile and pose regulatory and other hazards for grids.
Alexsandro Pomposelli
“Bitcoin and Dogecoin as payment is something new that we are going to try,” grid owner Alexsandro Pomposelli told Hypergrid Business.
He added that accepting crypto payments could help the grid lower its operating costs — and thus allow for lower land prices.
The grid is already off-setting some of its costs by running advertising. For example, the Google Adsense program has helped AviTron cut region prices by more than 65 percent, said Pomposelli.
“Bitcoin and Dogecoin payments will go to our savings so the grid has some kind of a financial backing and maybe our currency could also be backed by these two coins,” he said.
A blockchain is a public ledger — basically, a list of transactions — where all the participants keep a copy of the same list. The list is secured against tampering with an encryption-based locking system, but is not itself encrypted. That means that anyone can pull up the blockchain and see all the transactions on it. So, if someone knows your wallet address, they can see all the payments in and out of your wallet. This allows security researchers and government authorities to track money sent to ransomware groups, but also creates potential privacy problems for virtual world users.
The blockchain technology itself is free and open-source, meaning that anyone can launch their own cryptocurrency at any time.
That is not what AviTron is doing. Their in-world currency, Tron, is simply a traditional grid currency that has no real-world value.
AviTron welcome area. (Image by Maria Korolov.)
However, Pomposelli may turn Tron into a cryptocurrency, he said.
“I may go for our own AviTron Coin,” he said. “Place an infinite amount of coins available so its price would be more stable and won’t fluctuate as much. Like Dogecoin. Any coin that will be used for commerce cannot have so much volatility like Bitcoin and others. It needs to be stable.”
Cryptocurrency volatility a major obstacle to in-world use
A cryptocurrency’s price is based on public interest. So if, say, Elon Musk mentions the currency on Twitter, then bashes the currency on Saturday Night Live, then promotes it again, its price will swing dramatically.
Pomposeli said there are methods the grid can use to protect against volatility, like exchanging the currency immediately to US dollars, or creating a coin that has a fixed price in US dollars.
“I can leave the money in US dollars, earning up to four percent interest,” he said. “I can also wait till Bitcoin price really dips and I buy more for less dollars. So I sell high before the dip and buy when it’s bottoming up. You need to understand the markets to know when the dip will occur.”
This is obviously a risky strategy that can completely wipe out a grid’s finances, but Pomposelli is no stranger to risky strategies. In fact, his grids have shut down more than a dozen times over the past ten years due to bad business decisions.
Security and technical overhead also obstacles to crypto use
Despite the fact that the original premise of the blockchain was increased security and easier transactions than traditional national currencies, in practice, business have found it to be the opposite.
It is difficult to guard against fraudulent transactions with cryptocurrencies, said Zetamex CEO Vincent Sylvester, and cryptocurrency exchanges have questionable security standards.
OpenSim hosting company and grid operator Zetamex has tried different cryptocurrencies but had to shun them altogether because blockchain requires a lot more hardware to maintain the integrity and security of transactions than centralized systems, Sylvester told Hypergrid Business.
Vincent Sylvester
“We have had crypto, various in fact, as payment processors for region and grid orders in the past, which was only trouble and ended up being more a headache to deal with than what it provided in lesser transaction fees,” he said.
Plus, the volatility means that pricing has to be in US dollars, and all payments need to be immediately converted.
“As currency it will only work if adopted for the entire market, if you still have to convert to other currency it’s practically pointless,” he said.
There is no commerce model that would make cryptocurrencies a viable option for most business expenses and the type of transactions in OpenSim, he said.
“Cryptocurrency is a blight on society being partially responsible for both hiking hardware pricing and driving gambling addictions the world over,” he said. “Blockchain isn’t a magic word to solve the world’s ailments and it most certainly won’t provide any more useful monetary transaction medium than PayPal, Gloebit or Podex already do.
Kitely CEO Ilan Tochner also confirmed that switching to a cryptocurrency won’t reduce a grid’s operating costs.
“Adding a public blockchain doesn’t contribute to cutting down virtual world costs as it doesn’t decrease any of the costs associated with running your own OpenSim grid or renting one from someone else,” he told Hypergrid Business.
And it doesn’t help with security or privacy, he said.
Ilan Tochner
“Accessing any online service — OpenSim, websites, or otherwise, provides information about you and your activities to the systems you accessed,” said Tochner. “Currently that information is mostly accessible just by the entities that operate those systems. Moving some of that information from their systems to a public distributed ledger doesn’t increase your privacy, improve your security, or add anonymity. On the contrary, it’s more likely that it makes it harder to protect them.”
Most of the technologies implemented in blockchains to manage user privacy and increase security, like zero knowledge proofs or homomorphic encryption can be implemented more securely on other, better, systems, he said.
And the blockchain can’t be changed after the fact, he said. That means that mistakes can’t be fixed.
“Compare that with Kitely Market which, with our assistance, and under certain conditions, enables people to change who they bought items for after the fact at no cost,” he said. “For a example, because they mistakenly ordered the items to be delivered to an avatar belonging to the wrong grid or to a different avatar from their intended one. Doing so changes the original order information, which would not be possible if the order information was stored on a blockchain.”
Also, if a user wants to invoke their “right to be forgotten,” there’s no way to do that — which would make it hard for grids to comply with GDPR privacy rules and similar regulations.
Kitely has spent years in research on how to manage digital assets their distribution, ownership and potential monetization on Kitely Market and other virtual worlds, he added.
Prior to founding Kitely in 2008, Tochner founded and ran an Internet security company. He also has an MBA in finance.
Instead, Kitely uses PayPal and Kitely Credits for the Kitely Market and Kitely Credits for in-world transactions.
Kitely has no intentions to adopt any cryptocurrencies at the moment, Tochner said. “The costs of doing so would greatly outweigh the benefits.”
Government crackdowns
Another problem with using cryptocurrencies for in-world payment is that governments are increasingly cracking down on crypto transactions.
Last week, the US, together with thirty other countries, met to discuss the issue and released a statement pledging to address the exploding problem of ransomware in multiple ways, including increasing regulatory controls on cryptocurrency payments.
“We will enhance the capacity of our national authorities, to include regulators, financial intelligence units, and law enforcement to regulate, supervise, investigate, and take action against virtual asset exploitation,” they said.
Maria Korolov
“The only reason the Bitcoin currency has any value at all right now is because of ransomware,” said Hypergrid Business editor Maria Korolov who covers cybersecurity for CSO magazine and Data Center Knowledge.
Traditional currencies are either backed by governments and are guaranteed for acceptance for real-world payments such as paying taxes, settling debts, and paying groceries, she said. Other common currencies — such as, say, gift cards and coupons — are backed by the companies that issue them and have value as long as they haven’t passed the expiration date and the company is still in business.
Bitcoin, Dogecoin and other popular cryptocurrencies have no such backing. They’re used for currency speculation — basically, a legally-sanctioned form of gambling — and for paying ransomware and buying illegal goods on the dark web. Actual use for real shopping is almost non-existent because the currencies are so volatile and cumbersome for companies to support and for shoppers to use, she said.
The only major company to accept Bitcoin as payment, Overstock, reported losing $700,000 last year on cryptocurrencies, up from a loss of $569,000 in 2019.
Cryptocurrencies are popular with ransomware hackers and drug dealers not because they’re anonymous, she said. “They’re not.”
It’s because they’re still mostly unregulated, she said. For normal banking transactions, banks have to comply with know-your-customer laws and anti-money-laundering laws. That doesn’t make it impossible to set up fake bank accounts and send money to sanctioned criminal groups, but does make it a lot more difficult.
“Bitcoin doesn’t have any practical, legitimate, real-world uses,” she said. “It’s worthless for stored value or as a hedge against traditional currencies because of the volatility and lack of underlying value.”
Telling people that a grid accepts Bitcoin has some marketing value since there are OpenSim users who like the philosophy behind cryptocurrencies.
But it actually hurts marketing if the cryptocurrencies are used in-world, where the prices have be posted in US dollars due to the volatility of crypto.
“When the pricing is in virtual currencies, users feel like it’s ‘play’ money and spend more,” she said. “That’s one of the main reasons games have in-world payments instead of just pricing everything in dollars. That’s why they make you buy ‘farmbucks’ or ‘gold coins’ or whatever before you can spend them — because people spend more that way. Because of the volatility of Bitcoin and Dogecoin, if those currencies are used in-world, prices have to be listed in dollars.”
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