Introduction to the First Mineable Token: an interview with the deployer of 0xBitcoin.
This article can be found in its original form (HERE) under the title “An Introduction to the First Mineable Token: Interview with Infernal_Toast” on Coinoid.com. The author can be reached on the 0xBitcoin Discord chat under the name “Three Jackdaws”.
The Problem of ICO’s: new token projects are centralized because one entity handles all of the initial coins and all of the the raised ICO money.
The Solution: the first decentralized mineable token on Ethereum.
After an rapid rise in the network hashrate [1], price fluctuations and a big hype of ‘0xBitcoin on the Ethereum’ discussed on reddit and 4chan, many miners are jumping on the ‘first mineable token’. Besides a parabolic rise in the hashrate, we can also notice serious discussions about the implementation of the mineable token on Ethereum, We from Coinoid decided to have a talk with the Smart Contract deployer, Infernal_Toast and figure out why there is a mineable token created.
What is 0xBitcoin?
0xBitcoin (or 0xBTC) combines advantages from both Bitcoin and Ethereum. The asset is decentralized, permissionless, mined and scarce just like Bitcoin which means it shares all of Bitcoin’s use cases and properties as a transparent and permanent digital record of value. However, above Bitcoin, 0xBitcoin has the speed and scalability of the Ethereum network and is compatible with all ERC20 token services. This means it can be stored in any Ethereum wallet, is as secure as Ethereum, and can act as ‘the bitcoin’ for the Ethereum ecosystem. This is important because Bitcoin is not able to communicate with or interact with the Ethereum smart contract ecosystem [2].
Figure 1: General statistics about the Smart Contract 0xBitcoin
Threejackdaws: Infernal_toast, you are an Ethereum enthusiast and engaged in bringing innovation and development of ERC20 Tokens on the Ethereum Blockchain. What excites you the most about this topic?
Infernal_toast: I really love mining and I love Ethereum. I think with BitGold Nick Szabo really did invent the virtual equivalent of extracting scarce metals from the ground and I am excited to finally see that technology appearing inside of the Ethereum network so that it can live on even through Casper [3] when we will see network speed increases.
Threejackdaws: What are your views about Initial Coin Offerings and Airdropped tokens?
Infernal_toast: I have different thoughts for each. Airdrops I do not see as a good or legitimate launch strategy to base a token around. They are clearly not trustless, in that users must trust that the deployer is fairly giving out the tokens and not just keeping a lot for themself in secret. Also, spammers and hackers can attack airdrops and lots of exchanges like IDEX do not list airdropped tokens anymore.
Initial Coin Offerings or ICOs are potentially useful for raising money for a centralized company or startup. However, they have come under legal scrutiny and they are bad at establishing a trustless currency token. This is because, since ICO ether is not burned, the ICO deployers can buy into their own ICO for a net cost of zero under the guise of an anonymous Ethereum account. There is speculation that this is a wide and common practice. So I am against ICOs as well. That is really what drove me to research token mining.
Threejackdaws: You wrote an article about “Sybil attacks on medium [4], “ Could you explain what’s exactly the risks for crypto investors?
Infernal_toast: When an airdropper secretly airdrops tokens to accounts they control or an ICO deployer buys into their own ICO with a secret account they control, I call that ‘Sybil Attacking’[5] your own deployment. You are acting under the guide of an anonymous personality in order to gain an advantage against all of the other users of your token and those who are investing. This does not always happen with high-profile respectable ICOs but is likely rampant among the wider ICO community.
Threejackdaws: You originally deployed “the 0xBitcoin contract” on the Ethereum blockchain, Could you explain in a non-technical way, what exactly “The first mineable token” (EIP918) [6] is and why we need it? What kind of problem does it solve?
Infernal_toast: The first mineable token shows that we can completely sidestep and avoid these problems. The root of the problem is the following line of code in the vanilla ERC20 specification constructor method which 0xBitcoin (uniquely) does not use:
balances[owner] = _totalSupply;
This little line of code assigns all initial tokens to the deployer of the token contract. 0xBitcoin does not use this. Instead, all of the tokens are locked up and owned by the contract; no advantage is given to the deployer at all. Tokens must be mined by calling a method named ‘mint()‘ which acts like a faucet but has a Proof of Work challenge which gets harder or easier based on how often it is called successfully. Therefore 0xBitcoin acts exactly like Bitcoin but it is an ERC20 token. Furthermore, the tokens did not all end up in the hands of a (hopefully trustworthy?) human but instead are controlled and distributed purely by trustless auditable code [7].
Figure 2: Average block times and total supply graph
Threejackdaws: There is recently a lot of criticism on the concept of Proof of Work, the exponential increase of electricity consumption for example. And you choose exactly
PoW for a distribution model, isn’t this a huge risk for adoption and recognition? Since Ethereum moves to Proof of Stake and has the goal to eliminate mining entirely?
Infernal_toast: Criticism with regards to Proof of Work I think exists in some communities but I know that the Bitcoin community understands that it is an absolute necessity for a trustless currency’s distribution. Ether is not trying to be a currency first, it is trying to first secure its network, and so it can move to a Proof of Stake model. I really encourage everyone to read Nick Szabo’s description of Bitgold that he wrote about in 1998. If you want an asset to act like ‘gold’, it has to be acquired like gold. Every year, humans expend 475 million Gigajoules of energy to mine real Gold [8] and the amount of gold in the earth is dwindling as we extract it. Burning a barrel of crude makes about 6GJ of energy. Bitcoin and 0xBitcoin are simply trying to emulate that in a virtual environment and have the potential to not only reduce the amount of real gold that we mine, but also to use more solar, wind and renewable energy to operate such a mechanism.
Figure 3: Total network hashrate and mining difficulty
Threejackdaws: There are similar projects and communities trying the bitcoin for Ethereum concept, What makes 0xBitcoin and the EIP198 standard different?
Infernal_toast: All of the other projects trying to make a bitcoin-like currency for Ethereum have failed to meet my expectations. They are either ICOed, airdropped, or do not use Proof of Work and so they do not act like bitcoin to me. They all have had a central human monarch who ends up controlling all of the tokens and handing them out in some sort of fair/unfair pattern. 0xBitcoin is different because it doesn’t matter who deployed it: it is 100% purely controlled by code and the deployer has zero advantage. This way, the community can actually agree that a monarch is not in control and 0xBitcoin can be a fair trustless medium of exchange for Ethereum.
Threejackdaws: I’ve been looking on the 0xBitcoin website for information about the team behind 0xBTC, Where could I find information about the founder, Chief Technical Officer, Chief Marketing Officer and Chief Operational Officer? Could you shed light on your team?
Infernal_toast: There is not a published team roster because there is not an official team. I am the deployer and a few community members have stepped up to help out such as TimeTravellersApprentice, Mikers, Azlehria, Lodge, and even 0x1d00ffff who made a pretty stats page with hashrate graphs [1]. 0xBitcoin is run just like Bitcoin; as a free open source project with volunteers.
Threejackdaws: How does the mining process exactlywork, could you explain this in a non-technical way?
Infernal_toast: The mining process for 0xBitcoin works exactly like the mining process for Bitcoin except instead of the SHA3 algorithm, the soliditySha3 algorithm is used. Furthermore, instead of submitting the solutions to a dedicated network, they are submitted into the 0xBitcoin smart contract within Ethereum. At a low level, miners are trying to find a number that fits a sort of ‘Sudoku puzzle’ meaning that the number is hard to find but easy to verify once found. When the miner finds a number that fits the puzzle, it submits it to the smart contract mint() method and gets a payout of tokens. 0xBitcoin supports pools and these work just like Bitcoin pools.
Figure 4: Block distrubtion amongst mining pools
Threejackdaws: To make things a bit transparent for our readers, was there any premine?
Or a pre-sale?
Infernal_toast: There was no pre-sale or pre-mine. As soon as 0xBitcoin mining began in early February 2018 it was announced on reddit (/r/ethereum, /r/ethtrader, /r/ethtraderpro) and at least 6 miners were minting new tokens on day 2. By the third week, new faster mining software was already built anonymously and there were over 50 miners.
Threejackdaws: Which miner-segment are you targeting with this mineable token?
Infernal_toast: I hope that Ethereum GPU miners will switch over to 0xBitcoin when Ethereum switches to PoS Casper so that they will continue to stay involved in the Ethereum Network and Ethereum Community. I hope that GPU miners of non-Ethereum blockchains will realize that Ethereum is the future of the blockchain and will begin mining as well.
Threejackdaws: Since you have said earlier, this is a decentralized token on the Ethereum
blockchain, what’s your view about ASIC hardware, which was recently announced by Bitmex? And could ASICS pose a threat to the decentralization of the mineable tokens on the Ethereum blockchain?
Infernal_toast: I think that ASICs pose a great threat to Bitcoin but I also know that as long as a second ASIC manufacturer comes online there will be no issue. I am counting on Halong and Samsung to rise up and give Bitmain some good competition in order to keep them honest. If so, I feel very good about Bitcoin and 0xBitcoin.
Threejackdaws: Could you explain to our readers if they can get into token mining? Do
they need a beefy computer? CPU/GPU? Are there any pools?
Infernal_toast: If you want to get started with Token Mining I do recommend that you have a GPU in a desktop tower or a dedicated mining rig since the difficulty has risen a little bit. If you have a PC with an AMD or a NVIDIA graphics card from the last five years, you will earn lots of 0xBitcoin in a pool! There are more than four pools and they are listed in the navigation bar on 0xbitcoin.org [9].
Threejackdaws: I’ve noticed a list of active projects for the 0xBitcoin token, Which one is the most promising one, in your opinion?
Infernal_toast: There are a lot of active projects related to 0xBitcoin but really any project that is built for ERC20 tokens is a project that will help 0xBitcoin. I am building a new Dapp called ‘Lava Wallet’ [10] which will allow users to store tokens inside. Then, those tokens can be ‘transferred’ to other users by using only offchain-signatures. This means relayers can pay the gas or the recipient can pay the gas, not only the sender. Furthermore, Dapps can use this contract as their own wallet pattern and so users would not need to deposit and withdraw tokens into and out of each service, they could just keep them in the Lava Wallet and provide off-chain signs to special Dapp methods.
Figure 5: The Lava wallet
Threejackdaws: What is the roadmap for the first mineable token in the future? What
can miners and investors expect?
Infernal_toast: I have no idea. Miners and users of 0xBitcoin should expect it to act like Bitcoin but on Ethereum. This means that it is not a stablecoin, it is very volatile. However, it will likely work very nicely in a basket of assets just like we see with Bitcoin. I will say that you should expect Ethereum and Ethereum Tokens to gain a stronger foothold on the internet and in the blockchain space as a whole.
Source: https://www.coinoid.com/first-mineable-token/
You can find out more information about 0xBitcoin by:
- Joining the Discord: https://discord.gg/2Mn5r8B
- Reading the white paper: https://github.com/0xbitcoin/white-paper/blob/master/README.pdf
- Checking out all the up-to-date stats: https://0x1d00ffff.github.io/0xBTC-Stats/?page=stats&
- Checking out the website: https://0xbitcoin.org/
- Stopping by the Reddit pages: https://www.reddit.com/r/0xbitcoin/ and https://www.reddit.com/r/Tokenmining/
