NEWS

Virtual currency miners in it for more than just money

03/03/2014 10:27 EST | Updated 05/03/2014 05:59 EDT
Over the past few months Bitcoin has vaulted into the public consciousness with news of its wild value changes and the collapse of one of its key currency exchanges. 

Bitcoin, however, is only one of more than 100 "cryptocurrencies" currently in circulation that are "mined" electronically.

Lloyd Francis works in a computer store in Halifax, where there is a deconstructed computer, with non-essential parts removed and more powerful elements added to illustrate a "mining rig."   

"Most of the mining is done by the graphics card," Francis explained.

The rigs are like high powered calculators that can help miners solve complex, encrypted math equations. For every equation that is solved, miners are rewarded with a "coin" being issued.  

Lewis Pike,14, mines in his basement in Halifax. His rig is two old home computers and a laptop all working together to mine his coin of preference: Dogecoin. It has only been around since December, but more than 50 billion coins have already been mined. Pike has about 3,000 of them. 

Pike said the last time he checked, a Dogecoin was worth a thirteenth of one Canadian cent. That means Pike has left all of his computers running, 24 hours a day, for months, producing the equivalent of about $2.30 in Dogecoins.

But Pike isn't in it for the money. He says it's like belonging to a special club where tiny digital tokens are shared among like-minded people online.

"It has a great community behind it," he said. "It's a very charitable place. It's very friendly."

Perhaps Dogecoin's most generous act so far happened at the 2014 Olympics in Sochi. The Jamaican bobsled team was underfunded and almost didn't make it to the Games, butDogecoiners pitched in about $30,000 in the digital currency to help.

Of course, not everyone mines cryptocurrency out of the goodness of their heart. Francis says he mines Vertcoin because it's new and there's hope its value could go up if it become more popular the same way Bitcoin did.

"I mean people treat them like stocks as well," he explained. "They read the news, they see which ones are coming out, they jump onto a coin for a few days or a few weeks and produce as many as they can — and just trade them or hang onto them, waiting for the price to go up and then dump them. So [they're] kind of like stocks they pump and dump."

Francis says people do come to the shop to purchase thousands of dollars worth of equipment solely for mining purposes, and sometimes they make their money back quite quickly. But he says for most people generating cryptocurrency is more of a hobby than a money-making scheme.

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