Coinhive, a well-known Monero mining service, is about to shut down due to declining profits. Coinhive’s distinctive feature was the fact that it could be embedded in a web page, where it would quietly run in the background. This versatility made Coinhive both popular and notorious—raising the question of whether the project will be missed.
A Divisive Miner
Although Coinhive was controversial, it had legitimate applications. UNICEF, for example, used the software for fundraising purposes. Coinhive basically worked by having web surfers mine cryptocurrency during their visit to a website that used the plugin; the mining profits would then be sent to the site owner. Compared to advertising, Coinhive provided an unintrusive source of revenue—assuming that the software was used within reason.
Unfortunately, bad actors also realized Coinhive’s potential. Coinhive quickly became a common ingredient for cryptojackers—a type of malware that forces its targets to silently mine crypto, then redirects the profits to the attacker. By July 2018, cryptojackers had become so prolific that Google decided to ban all mining software from its app store. Although this didn’t hurt Coinhive directly, it was a bad sign.
Not Economically Viable
However, the potential misuse of Coinhive has nothing to do with its discontinuation. Instead, Coinhive states that the project “isn’t economically viable anymore.” Coinhive takes a cut of mining revenue, and it asserts that Monero’s reduced hash rates and low market prices have made Coinhive unprofitable for some time:
“The drop in hash rate (over 50%) after the last Monero hard fork hit us hard. So did the ‘crash’ of the crypto currency market with the value of XMR depreciating over 85% within a year. This and the announced hard fork … [have led] us to the conclusion that we need to discontinue Coinhive.”
Coinhive’s services will end on March 8th, just one day before an upcoming Monero upgrade. During upgrades, Monero changes its mining algorithm, and although this change is meant to ward off ASIC miners, new algorithms also pose an issue for software developers. As one Redditor notes, building a web-based miner for the next algorithm is “not a trivial exercise.”
The End of Webmining?
Although the community is divided as to whether Coinhive’s demise should be mourned, this is probably not the end for Coinhive-like projects. The area of “webmining” is thriving, and various alternatives are either in development or already operational. That said, any web miner that focuses on Monero will likely face the same pressures that Coinhive did. Only time will tell whether its competitors can survive.