Micro Mining (Cryptocurrency): Meaning and Functioning

Amilcar, with 10 years of experience in FinTech, blockchain, and crypto startups, provides guidance to financial institutions, governments, regulators, and startups.

What Is Micro Mining?

Micro mining is a form of cryptocurrency mining that can be carried out by commonly used internet-connected home appliances or handheld electronic devices.

Micro mining was proposed as a solution to the scalability issue and widespread adoption of cryptocurrency. It aimed to utilize the processing power and memory of everyday appliances, such as smart refrigerators, washing machines, air conditioners, and vacuum cleaners. However, this idea has not been successful due to the computational intensity of mining Bitcoin and the lack of consumer adoption of IoT devices.

Key Takeaways

• Micro mining proposed that mobile devices and Internet of Things (IoT) could mine small amounts of cryptocurrency to speed up transactions and reduce device costs.
• However, the idea proved impractical as mining cryptocurrencies like Bitcoin required more resources than embedded computer systems could handle, and the growth of IoT fell short of expectations.
• Micro mining may still make a comeback as alternative cryptocurrencies thrive and network developers seek solutions to congestion and slow transaction times.

How Micro Mining Works

Micro mining utilizes software on small internet-connected devices like smartphones or e-readers to mine cryptocurrencies during idle processing time. These devices can generate small revenue to offset their purchase or operational costs.

In a hypothetical IoT blockchain network, micro mining could be supported by IoT-enabled appliances. In this scenario, the appliances would validate transactions and send the necessary details to trusted nodes on the blockchain. The network nodes would collect these validated transactions and store them in the network ledger based on authentication and consensus. By delegating storage, maintenance, and processing tasks to trusted nodes, low-end devices don’t require high computation power and memory. They can still contribute to mining activity, improving scalability and transaction capacity.

The Argument for IoT Micro Mining

The energy-intensive nature of traditional crypto mining led enthusiasts to explore alternatives that are less capital-intensive. Using IoT to alleviate this burden was one proposed solution.

IoT refers to the network of internet-connected devices with processors, controllers, and memory modules, capable of storing, processing, and exchanging real-time data.

Micro mining was also expected to increase transaction processing and reduce costs through economies of scale. The idea was to add hundreds of thousands of devices to the network, effectively reducing burdens and increasing efficiency.

Future of IoT Micro Mining

The optimistic vision of a fully connected world, where every electronic device earns crypto, has not materialized. Consumers were not interested in internet-connected devices that didn’t add value to their daily lives.

Furthermore, the hardware requirements for mining crypto are growing, making it even harder for consumer devices to keep up. Additionally, the lack of demand for IoT and the inability of mining to compensate for the loss of computational capacity in devices further hindered the development of micro mining.

Examples of IoT-Enabled Home Devices

Examples of IoT-enabled or "smart" home devices include speakers, thermostats, air purifiers, cameras, lights, locks, doorbells, refrigerators, microwaves, ovens, washing machines, and microwaves.

How Much Can You Make Mining Bitcoin?

Earnings from mining Bitcoin depend on various factors. If you participate in a pool, your earnings will be a percentage of the profits based on your contribution and the pool’s reward-splitting system. However, mining Bitcoin on a mobile device is not practical and unlikely to yield significant earnings.

The Bottom Line

Micro mining offers limited-capacity cryptocurrency mining using everyday internet-connected appliances. Its goal was to address scalability issues and aid in cryptocurrency adoption. However, the idea has not succeeded due to the resource-intensive nature of mining Bitcoin and slow consumer adoption of smart appliances.