Bitcoin mining rigs have until now been either dedicated computers or machines with another function, operating as mining rigs when not engaged in their main operations. But Samsung has pulled off an upcycling first by taking a number of used Galaxy S5 smartphones and building a Bitcoin mining rig out of them. The company displayed these in San Francisco recently. And they’re boasting that an array of eight Galaxy S5s are a more powerful mining tool than the average desktop PC.
The project is one of the outputs from the C-Lab, Samsung’s innovation centre, which has been looking at interesting ways of using old phones. They took 40 outdated Galaxy S5 phones and loaded them with a new operating system. This enabled them to be used as a Bitcoin miner, when linked together. It has to be said that Samsung were fairly coy about this, and wouldn’t answer questions from reporters about the rig.
It’s known however that the company is interested in Bitcoin, and is carrying out research and development projects with a specific emphasis on the technology used in the block chain. It has previously worked with IBM in this area. But it’s notable that while IBM is promoting the use of blockchain technology for business networks and smart contracts, it’s currently taking pains to note the difference between block chain technology and Bitcoin’s use of it.
IBM’s interest in block chain technology
Previously IBM and Samsung have partnered in developing a platform using blockchain technology which would reduce the security problems associated with the Internet of Things (IoT), link millions of IoT objects and enable new applications to be developed. The two companies are apparently working towards a blockchain-based design for a ledger that would enable transactions between IoT entities.
This would mean that the devices wouldn’t need to communicate through a central hub. IBM has apparently called current IT security “security through obscurity”. It wants to mimic the Bitcoin model by achieving security through transparent transactions and open source software.
Is Samsung interested in Bitcoin?
IBM appears to be putting some clear (blue?) water between its blockchain developments and Bitcoin applications. This is possibly due to the regulatory and prudential hurdles yet to be cleared by Bitcoin. So how interested is Samsung in Bitcoin and other digital currencies, rather than simply the block chain technology that underlies them?
At the San Francisco conference where it showed the smartphone mining rig, it said that it had plans to release the software for the projects it was exhibiting. It will be interesting to see whether the software used to create the mining rig will be released.
Could we finally see peer-to-peer digital money?
Samsung’s focus is bound to be different from IBM’s, in that the use of Smartphones as payment and transaction devices is already with us and growing strongly. An international device provider, with a single global operating system is a good fit for a single, global, digital currency. The problem with electronic payments to date is that they always have to have an intermediary. If one person wants to pay another digitally, each person has to have an account somewhere held by a third party financial institution. The exchange is actually made between the two institutions.
Now this suits governments very well. It means that there is a record of every transaction, with a government-authorized intermediary. It means that they can focus in on movements of cash as likely to be proceeds of crime or fraud. In fact, during recent discussions about the possible demise of cash, the “Big Brother” implications in terms of government surveillance, were very much to the fore.
But if devices such as smartphones become capable of exchanging value – let’s say using Bitcoin – without the necessity for any intermediate institution standing in the middle of the transaction, the whole game will change.
The end result could be that governments find themselves left behind by technology as people simply start using peer-to-peer value exchange more than they use their bank account. They may regret not paying more attention to the new currencies.