Everyone knows by now that any existing cryptocurrency can be re-issued as a digital token on the Ethereum blockchain. We have seen multiple projects bring Bitcoin to the Ethereum blockchain in the form of ERC20 tokens. Although the usefulness of such tokens remains to be determined, countless competitors have emerged in this space. Bitcoinereum, for example, is another creation which few people will legitimately care about.
Bitcoinereum is Another Waste of Time
Although we are no big fans of Bitcoinereum for obvious reasons, there are some aspects to this new token which deserve some attention. For one thing, it is a minable ERC20 token, which is unlike anything we have seen in this industry so far. In most cases, ERC20 tokens are generated from day one since there is no mining involved whatsoever. Then again, it is rather difficult to mine such tokens to begin with.
According to the Bitcoinereum website, the Bitcoin “supply mechanism” has been turned into a smart contract. Anyone in the world is able to mine this new ERC20 token, as the reward per block is the same as that on the actual Bitcoin blockchain. Fifty coins are generated every 10 minutes at the start, with rewards going down over time. The mining itself occurs through the “mine” function of the smart contract in question.
This confirms there is no actual mining taking place on the network, even though this new function isn’t something we have seen similar ERC20 tokens embrace for some reason. Users can call the smart contract function and get 1 BTCM in return. A total of fifty calls is allowed per 10 minutes, although it is unclear if there is a limit on the number of coins to be earned per user as well. Users will need to pay the Ethereum network fees themselves for every call, though, which may be a downside for a lot of users right now.
With a maximum supply of 21 million tokens and rewards halving, an interesting situation is created. So far, there is a total supply of nearly 100,000 generated BTCM, distributed among 500 token holders. There have been over 97,900 transfers already, which is rather impressive. It is unclear what value people hope to see for BTCM, though, as the token literally serves no purpose whatsoever. It isn’t like one can spend this currency like they can Bitcoin – or Ethereum, for that matter – as there is no one who accepts this form of money right now.
While it is commendable that the creator has come up with a smart contract function to “mine” coins, there is no reason for most people to take this concept even remotely seriously right now. There is also no reason to waste Ether or gas on a project like this one, as it doesn’t reward users with a valuable token in the first place. It is certainly possible we will see a higher value assigned to BTCM in the future, as the weirdest tokens and altcoins have successfully gained traction these days.
In the end, we are seeing far too many Bitcoin clones issued as ERC20 tokens. No one has asked for this, and it remains highly doubtful such tokens should even exist in the first place. Then again, it is also doubtful people will stop creating useless tokens anytime soon. They are a booming market, after all. Only time will tell how Bitcoinereum will play out, but we don’t have high hopes for it.