Coinhive, a crypto exchange with a ne’er-do-well reputation and based out of Germany, has announced that it will be shutting its doors this week. Its Monero mining script will no longer be supported. The firm cited multiple money related reasons, but in the end, it claimed that its operation was no longer “economically viable”.
In its announcement, Coinhive explained:
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 and algorithm update of the Monero network on March 9 has led us to the conclusion that we need to discontinue Coinhive.
They plan to shut down on March 8.
Coinhive began operations in September of 2017 and immediately attracted what many have referred to as a host of miscreants, intent on cryptojacking activities that used Monero as its token of choice. Coinhive quickly gained the reputation of being the “Cryptocurrency Poster Child”. Per one knowledgeable insider:
Coinhive was touted as a way for website owners to generate revenue other than via ads, doing so by enabling websites to use visitors’ computing resources to mine for Monero, presumably with their consent.
Unfortunately, many “miscreants” went their own way with modified code and never acquired the necessary consents.
Crypto-jacking is the unauthorized use of another’s computer to run mining software in the background for the benefit of the malware distributor. The malware is deployed either by having the victim click on an email link or by infecting an online ad, which then attaches JavaScript code directly in the victim’s browser. In either case, a central server commands the code to execute on behalf of the miner. Victims may witness a decline in computer performance, as well as receive a sizable utility bill at the end of the month.
Industry insiders believe that cryptojacking is on the rise. Coinhive was not the only option for this illicit activity. Adguard reported that its analysis concluded that as many as 33,000 websites run crypto mining scripts, using the browser based approach. As for Coinhive, its list of enlisted websites exceeded 34,000. Most miners have claimed in the past when valuations were high, it was really easy to make money. It has been written that Coinhive made $300 thousand during its first month of operation. Cryptojacking, however, illegally eliminates the two high cost drivers of the business – computer hardware and an excessive amount of electricity.
Mining cryptocurrencies at today’s valuations has become economically unviable. The dark side of the activity is also becoming more pronounced and must be addressed. For the time being, Coinhive advocates will have access to the firm’s dashboard to conclude any outstanding transactions and will have to look elsewhere for a business partner come March 8th. For the time being, no one in the industry seems to be mourning the passing of the firm. One insider remarked:
As for utilities like Coinhive? We’ll dance when they’re dead.