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Where do cryptocurrencies come from? Who “creates” them? The process of buying and selling cryptocurrencies is easy to understand because, at its core, it’s a standard transaction. Things start to get a little complicated, though, when we talk about how cryptocurrencies are created, why there are so many cryptocurrencies, and how cryptocurrencies gain value.
If you pay even passive attention to crypto news, then you’ve probably seen negative headlines about crypto “mining.” This mining process is actually how new cryptocurrencies are created, and it has been rightfully slammed as a wasteful endeavor that consumes a tremendous amount of electricity (equivalent to the annual consumption of countries like Chile and Bangladesh).
But how does the process work and why is it so bad for the environment? Can it only be done using expensive specialized equipment or can you use a device as simple as your smartphone? Here’s everything you need to know.
What Is Cryptocurrency Mining?
Crypto mining refers to the process in which a new set of crypto assets (Bitcoin, Ethereum, etc.) are generated and added to the market. The blockchain acts as a decentralized bank ledger that is stored simultaneously in several locations and is regularly updated by network contributors with new transaction information.
The process of updating the ledger and adding a new block of transactions to the main chain (hence the name “blockchain”) requires users with specialized software called “miners” to solve arbitrary mathematical equations generated by the network.
In the case of Bitcoin, which uses what is called a “Proof of Work” (PoW) mining model, miners must provide evidence (i.e., proof) that they have expended computational power (i.e., work) before the network reaches a consensus and adds a new block of transactions. The network requires miners to provide hashes, or long strings of numbers, that serve as proof of work.
Once a miner finds the correct hash, a new block of transactions is added to the ledger. The miner who correctly solved the equation is rewarded with newly minted Bitcoin and the transaction fees paid by Bitcoin users. The entire process starts all over again until another miner finds the correct hash so that the next block can be added. Rinse and repeat.
Why Is Cryptocurrency Mining Bad for the Environment?
Not all crypto mining is energy-intensive; it’s the PoW process used by popular cryptocurrencies like Bitcoin and Ethereum that is the problem. As the most widely mined cryptocurrency, Bitcoin uses an estimated 128.53 TWh of electricity a year, according to data from the Cambridge Bitcoin Electricity Consumption Index. That’s more than the consumption of countries like Argentina, Netherlands, or the United Arab Emirates. Ethereum is equally as bad, reportedly using an estimated 110.75 TWh of electricity annually, according to Digiconomist.
Digiconomist further estimates that Bitcoin mining generates 97 million tons of carbon emissions each year, which is comparable to the amounts generated by developing economies. Ethereum mining produces over 52 million tons of carbon dioxide emissions annually, which is comparable to the carbon footprint of Sweden.
Due to the inherently wasteful nature of the PoW mining process, many cryptocurrencies are moving away from the PoW model to alternative methods such as the Proof of Stake (PoS) model, which randomly assigns the users that will mine or validate block transactions based on how many coins a user “stakes.” The more tokens a user stakes, the more mining power they receive.
PoS is significantly less resource-intensive than PoW. Other methods of validation that are under development include Proof of Burn, Proof of History, Proof of Capacity, and Proof of Elapsed Time. None of these options require ridiculous amounts of computing power, which is why it’s unfair to label ALL cryptocurrency mining processes as terrible for the environment—Bitcoin and Ethereum that are the problems.
How Would Cryptocurrency Mining on a Phone Work?
While it is possible to mine cryptocurrencies using a smartphone, solo mining is generally not recommended for two reasons:
- Mining will put an incredible amount of stress on your smartphone, shortening its lifespan and potentially ruining its hardware.
- The returns you get are not worth the effort. For instance, mining Bitcoin using a smartphone will ONLY net you pennies after a YEAR. And that’s only if you disregard the cost of electricity and wear and tear.
A smartphone has a fraction of the power of a computer, so it understandably wouldn’t be profitable to use it to mine a cryptocurrency like Bitcoin, Ethereum, or any cryptocurrency that uses the PoW mining model.
But let’s say you decide to ignore that and do it anyway, you still won’t be able to find any legitimate mining apps on both the Google Play Store and the Apple App Store. Both companies banned such apps in 2018.
Apple doesn’t allow crypto mining software on any of its platforms because they put device components under extreme stress and also drain the battery. The App Store’s guidelines explicitly state that apps “should not rapidly drain battery, generate excessive heat, or put unnecessary strain on device resources.” Crypto mining apps do all of the above, so they got axed.
Google similarly banned crypto miners from the Play Store back in 2018 but for unspecified reasons. According to the Play Store’s developer policy for financial services, the platform won’t “allow apps that mine cryptocurrency on devices.” However, Google still allows “apps that remotely manage the mining of cryptocurrency,” which means cloud mining apps and apps for managing mining pools are still allowed.
Options for Mining Cryptocurrency Using a Smartphone
Why even bother with crypto mining on smartphone? Well, solo mining isn’t a good idea, but there are other options. For example, it is possible to mine cryptocurrencies that are specifically designed for mobile devices like Pi coin and AntCoin.
A second option is cloud mining—pay a company to mine your desired cryptocurrencies using its mining rigs and keep track of your profits using your phone. There are plenty of apps available on the Play Store and Apple App Store for managing cloud mining operations.
The last option is to bypass the official app stores and sideload a mining app, but that’s generally not recommended for security reasons. We’re going to take a look at each of these three options in the next section.
Mining Cryptocurrencies Designed for Phones
Quite a number of mobile-based cryptocurrencies have popped up in recent years promising users free coins if they simply log into the project’s mobile app and click a button once a day or every few hours. Users can earn more if they refer the app to friends and family or participate in special roles.
Many of these mobile-based crypto projects have suspiciously similar whitepapers with elaborate roadmaps. They offer no tangible value other than perhaps the quick serotonin boost from successfully completing the required task. The free coins they purportedly pay out to users are often not listed on crypto markets; the development teams are generally completely anonymous; and the apps harvest a considerable amount of user data. The old adage holds true: if something is too good to be true, then it’s probably a scam.
Below are some examples of these projects. Please note we DON’T endorse any of these projects. Install them at your own risk.
Pi Coin
Pi coin is the native cryptocurrency of the Pi Network, which bills itself as “the first digital currency you can mine on your phone.” Its mission is to create an inclusive cryptocurrency and smart contract platform for everyday people that is powered by Pi.
Users must download the Pi Network app (available on iPhone and Android) and play one of the four available roles. The simplest role requires users to simply confirm that they are not a “robot” by validating their presence once a day. Other roles require existing users to contribute by validating new users or to become ambassadors by referring the network to other users. Users can play one or all of these roles to receive newly minted Pi coins.
Pi coin is the first entry in our list because it looks—at least on the surface—like a legitimate mobile-based cryptocurrency. The development team is not anonymous and is made up of two PhD holders from Stanford. The whitepaper is also concise, with clear information about how the project works along with its objectives.
Bee Network
Bee Network is another phone-based cryptocurrency that appears to be an anonymous version of the Pi Network, but with no affiliation to the original Pi Network. It offers users a decentralized ecosystem that can be accessed by anyone with a mobile phone and an internet connection.
The Bee Network app (available on iPhone and Android) offers a gamified experience that lets users earn BEE by completing tasks as simple as logging in and clicking a button every 24 hours.
Like Pi Network, it uses a referral marketing model to provide more BEE coins to existing users who bring in new users to the network. According to the whitepaper, more roles and opportunities to earn BEE will be added in later phases of the project.
AntCoin
AntCoin (ANC) is the official cryptocurrency of the Ant Network. According to the project’s whitepaper, the goal of the project is to establish a privacy-centered advertising and social media sharing network that benefits both content creators and their viewers.
The network uses a mobile-based mining system that requires no energy consumption and therefore doesn’t harm the environment. All miners have to do is download the Ant Network app, register an account, and get started.
There isn’t a lot to say about this project. The whitepaper is rather vague and the developers are completely anonymous. There is no privacy policy and ANT as a cryptocurrency is not listed on any crypto market. Use this app at your own risk.
Eagle Network
Eagle Network is a mobile crypto mining simulator similar to Bee Network and Pi Network. It lets users mine currency by simply pushing a button every hour to earn free coins. Like every other project in this list, Eagle Network uses a referral marketing model to encourage existing users to refer the app to friends and family in exchange for a higher earning base rate.
Eagle Network has many of the same problems we noticed in Ant Network. Its white paper is suspiciously similar to Pi Network. Its development team is completely anonymous and the free currency it gives users isn’t tradable anywhere. At some point, the network reportedly offered users the option to pay for upgrades to earn more of its native currency, which is a risky gamble because Eagle Network’s currency isn’t a publicly traded asset. The developers later removed this option. Use this app at your own risk.
Cloud Mining Using a Smartphone
Cloud mining using a smartphone is a much more legit method of earning newly minted cryptocurrency. They connect users to legitimate cloud mining services and make it easy to track remote mining operations and make quick changes on the fly. Below are some examples of cloud mining apps.
ECOS
ECOS is a crypto investment platform that offers multiple services, including a wallet, crypto exchange, portfolio management tools, and cloud mining. The platform offers a variety of cloud-mining contracts starting from as low as $50. It features a smartphone app (available on Android and iPhone) that can be used to track mining operations and buy or sell crypto assets on the ECOS exchange.
Stormgain
Stormgain is another crypto platform that offers a host of different services that include a Bitcoin cloud-mining service with a variety of mining contracts available at different price points. By using Stormgain’s mining service, you won’t have to expend any of your own resources to mine Bitcoin.
The platform has an all-in-one app that provides access to your Stormgain account and lets you buy, sell, or exchange cryptocurrencies on the platform’s exchange. Unfortunately, Stormgain does not have an app in the Apple App Store.
Bitdeer
Bitdeer is a mining platform that provides cloud-mining plans for various cryptocurrencies, including Bitcoin, Bitcoin Cash (BCH), Zcash (ZEC), and Filecoin (FIL). Anyone can get started with crypto mining with just a click of a button. In addition to offering cloud-mining contracts, Bitdeer also offers merchant contracts to miners who have their own mining equipment and want to sell their hashrate to interested buyers.
Bitdeer has an app available on Android and iPhone that lets you manage your revenue and mining operations from anywhere in the world.
BeMine
BeMine is a cloud-mining platform that offers mining contracts for different ASIC mining devices. Getting started is as quick as signing up and creating an account. The platform offers four different cloud-mining contracts with different hashtrates. It also features a profit calculator that can give you a rough estimate of how much you can expect to gain from cloud mining. The service has an official app for Android only.
Sideloading Cryptocurrency Mining Apps on Your Phone
The third and final option is sideloading crypto mining apps. Sideloading simply means bypassing the official app stores provided by Google and Apple to install software. This practice is generally not recommended because apps that circumvent official channels are often not checked for malicious code. Installing these apps could potentially introduce malware into your device.
The only reason anyone would sideload an app is because official channels don’t have the software they want. Since crypto mining apps that use a smartphone’s hardware to mine cryptocurrency have been banned by both Apple and Google, sideloading is the only way you can install these apps.
If, for whatever reason, you still want to install a miner that uses your phone’s hardware despite our warning, then simply download F-Droid. It’s a catalog of free and open-source software (FOSS) designed for Android devices. Search for “miner” and you should get a few options.
Unfortunately, there isn’t a similar repository available for iOS. Apple runs a tight ship and has complete control over what type of software can be installed on its devices. There is no easy option to allow software installations from unknown sources without jailbreaking your device.
The Bottom Line
In conclusion, there really is no easy way to mine cryptocurrency using a smartphone. In fact, both Google and Apple have outright banned such apps from their app stores. You could sideload crypto mining apps, but that would expose your device to security risks.
Viable alternatives are mobile-based cryptocurrencies like Pi coin, BEE, or ANT, but those projects don’t exactly have the best reputation. Apps from cloud-mining platforms are arguably a safer option, but they also have risks. Whatever profits a platform may calculate today when you purchase a contract could become a loss tomorrow when the market experiences a downtrend.
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We can’t endorse mining cryptocurrency on a phone with a clean conscience. Your best bet if you’re truly set on becoming a crypto miner is to purchase mining gear and join a mining pool. That said, if you want to throw caution to the winds and do it with your phone anyway, then at least now you have an idea of how to get started!
