Tech Tent: Two sides of the crypto-coin

Is the whole reputation of the crypto-currency industry under threat as computers are hijacked to mine new coins?

On the Tech Tent podcast this week, we ask whether a new breed of environmentally conscious blockchain entrepreneurs can demonstrate that this technology does have a sustainable future.


This was the week that a lot of people woke up to the fact that their computers could be working away to mine crypto-currencies without their knowledge.

Security researcher Scott Helme revealed that a whole host of UK government websites had been infected with crypto-mining software via an accessibility plug-in they all used. That meant visitors could have found their computers were chugging away, making money for the hackers who had planted the software.

That was a covert operation.

By contrast, the online magazine Salon was upfront about its plans to get some of its readers mining.

It informed them this week that if they wanted to use an ad-blocker, the website would have to find an alternative way of earning money from them, by harnessing their "surplus" computing power to mine the Monero crypto-currency.

There was a bit of an outcry about this - but Salon's publisher Jordan Hoffner told Tech Tent there was a positive, as well as a negative, reaction.

Ad-blocking hole

"When things are new, it scares people, but it also creates potential opportunities and that's what innovation is all about," he said.

He pointed out that Salon needed to plug a big hole in its finances caused by the growth of ad-blocking. Just this week, Google released a new version of its Chrome browser with an ad-blocker built in.

Hoffner says readers have a choice: if they don't like the idea of handing over their computers to mine Monero, they can either accept a few adverts or pay a subscription to access Salon via a new app.

He admits he has no idea how much the company will earn from mining - and of course if the crypto-currency bubble bursts, this idea may turn out to be another blind alley for the publishing industry.

But Salon wants to dip its toe into the crypto-currency and blockchain waters and find out whether this technology is as revolutionary as its backers claim.

If you want to find somewhere determined to embrace this vision of the future, head for Estonia.

This tiny country is punching above its weight when it comes to Initial Coin Offerings (ICO), where companies create new currencies to fund blockchain projects. Estonia has more per head than any other nation.

Among them is WePower. Its ICO has raised $40m (£28.5m) for its plan to transform the green energy market. The firm's chief technology officer, Kaspar Kaarlep, left Estonia's energy utility to co-found the business.

Image caption Kaspar Kaarlep

He says WePower has two missions for the tokens it has created through its ICO: to make it simpler to fund new energy projects and eventually to make the link between the consumer and producer closer.

"To fund an energy startup is very difficult. Doing an ICO if you want to do something big in energy is the only way to fund it."

The idea is that by recording every energy supplier and every transaction on a blockchain, the consumer will eventually be able to know - and decide - exactly where their energy comes from. "What blockchain does is allow the connection of the customer to the production - to the actual windmill or the farmer with solar panels."

I put it to Kaspar Kaarlep that so far the only large scale deployment of blockchain had been in Bitcoin where it had proved far from green, consuming vast amounts of energy in the mining process. "Yes, that's a very good point," he said.

"Blockchain, as we know it today in its technological youth, will need to improve."

He said it could be 10 years before WePower could fully realise its ambitions. There is a vast amount of hype around blockchain - in the past week I have been told it can do everything from democratising football to guaranteeing the quality of academic research.

In Estonia it was good to find a more sober - if still optimistic - assessment of its potential.

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