Topic: CoinLab obtains $500k in seed funding - page 3. (Read 6693 times)

Imagine all the sad kids with Nvidia equipment.

Even if they have the option of paying a smaller fee instead?
Don't know... if you pay your own electricity, it wouldn't make much sense.

I also think it is a bad idea, though I wish them luck. But I don't think they plan to make any games. They are going to go to game makers and offer it as an alternative to ads or charging.

I like the idea that a bitcoin startup got funding but it is a bad idea. 

Making games is all about content.  If they make the next angry birds it will not matter if it is mining in the background or not.  They would make more money from ads or added cost in game content (hopefully paid with bitcoin).  If they make game that sucks, it will not matter that it mines or not.  There is nothing really new here and mining is so hard that the BANDWIDTH alone will make it not worth it on machines without GPU's. 

So it all boils down to... can they make a good game.  At least with this mining in the background business model.

I think that's the only way this makes sense.

It's a clever idea, automatic and seamless mining in exchange of ingame advantages.
You want that weapon? Nice, buy it, or pay the premium or... mine for some hours!

The BOINC project Donate@Home is basically bitcoin mining for GPUGRID but the user doesn't have to know what bitcoin is or how to mine, he just treats it like any other BOINC project and it works perfectly.

Mr. Matonis wrote another article for Forbes on this:  http://www.forbes.com/sites/jonmatonis/2012/04/24/coinlab-attracts-500000-in-venture-capital-for-bitcoin-projects/

Also let's remember that many gamers will have a kickass GPU computer, but might play an online free-to-play 2d browser game (or even a 3d game that doesn't use much of their power). In this case, mining won't have a significant impedance on the gaming.

in my experience, a miner on a low aggression setting can run simultaniously with many games.
if they are smart they will build on an existing miner and basically just preconfigure and hide it - maybe with a few modifications. its not really necessary to reinvent the wheel for this and aquiring an appropriate license for a miner will save them a lot of time and money.

I agree on all points. Of course, at some level of abstraction any software installed on your computer that talks to other computers via the Internet has a "botnet" topology - That said, you are entirely correct, because the important distinction is that Bitcoin miners are effectively doing work at the bequest of some controlling system, so the botnet analogy is actually stronger than I had originally considered. Your point is well taken.

I agree that implementation and presentation are key. Regarding slowness, I think they'll just turn off the miner while they're gaming (and just run it overnight, etc). This is another good point of implementation that they have to get "right" (in the eyes of the users) for this to succeed. All very interesting.

I know it's not technically a botnet, but the topology is basically the same.

The business model is not that different from ad supported sites.  If successful, it could catch on with a variety of services and really shake things up among miners.  Monetize your free software with bitcoin transaction processing instead of ads.  It's really a fantastic idea but it's going to come down to implementation.

Considering the user base that is happy to install widgets for free games, I wonder if the additional "computer slowness" will even matter.  

I thought of this a long time ago, but assumed the hardware constraints would limit profitability. Either the botnet has to be massive, or the users have to have 4 GPU machines.

Exactly, well put. Sustained mining is, of course, critical to the longevity of Bitcoin. Providing external incentive to run mining processes (such as the CoinLab model) for transaction fees could ensure a healthy distributed base of miners, even after the generation reward dwindles.

Since the reward for mining with CoinLab is tied to in-game credits/perks, the two economies (in-game digital goods and Bitcoin itself) can be scaled independently. That is, even if transaction fee "mining" earns fewer Bitcoin value than today's generation reward, this doesn't strictly mean that the in-game perks are reduced; the two are independent, and gamers still have an incentive to run the CoinLab mining software.


As I was responding above, you hit on exactly my point of the two economies. Gamers want to earn in-game perks, and the pure Bitcoin value of what their mining doesn't directly matter to them.

I would tend to believe that, even if gamers are told up front about the electricity cost, that they'd still get behind running the CoinLab mining software to earn "free" perks, just because it gives their gaming rig something cool to do.


This is a good example of one primary point of the CoinLab article (original post). A major hurdle to starting a Bitcoin-related business is the stigma of the Bitcoin "brand." Just because users install and run distributed computing software doesn't make it a botnet. I used to run SETI@Home (and prime number factoring, etc) just because I want my computer to be doing something interesting when I'm not utilizing it. This does not a botnet make.

Agreed. Seems like a voluntarily installed botnet to me.

I thought the same thing.
On the other hand, botnet are probably making some money out of the computers they infect and use to mine, since they don't pay for the electricity.
What I mean is that, maybe CoinLab miners (the gamers) will be spending more electricity on their mining than what CoinLab will generate of revenues, but CoinLab doesn't care, as they are not paying the bill. And the gamers probably don't care that much either, all they want is to play for "free" - actually, they would be tricking themselves or their parents into believing this is free. I don't know how far can this "lie" goes on, though. Once people figure it out, they would probably rather pay directly per time of game. That would be less expensive to the gamers and more profitable to the game companies.

The other clever bit is that with the drop reward cut looming, it will ensure a pool of mining for the long term.

This is awesome. Great work Coinlab for having a solid idea and the balls to pitch it.

The clever bit is that neither gamers nor game developers have to actually care about Bitcoin, as such. Gamers earn in-game perks for running some widget in their spare time (the mining software to be developed by CoinLab), CoinLab gets the mined Bitcoin, and the game developers that partner with CoinLab get some kind of cut (in USD$). The last part is a bit fuzzy; can anyone clarify the business relationship between CoinLab and game developers? The CoinLab site is currently asking for beta participants, but there is little more information.

All around, this seems a fine way to leverage Bitcoin to monetize freemium games. Yes, they're really just running a mining pool, but the business model they've built around it could gain more mainstream appeal (outside the realm of Bitcoin), which is a very good thing for Bitcoin. I'm also particularly interested in the future of Bitcoin with games, so I wish them the best!

This is fantastic, and hopefully at one point the game companies might start to accept btc as real payment for games and things.

Legal botnet FTW.