The ERC-20 ‘Bitcoin’ Standard: An Overview of the 0xBitcoin Project

The gradual transition of Ethereum from proof-of-work to proof-of-stake is forcing miners to seek other ways to earn income.

One alternative is the project 0xBitcoin, which allows mining ERC-20 tokens on the Ethereum network. We explain what is needed to mine 0xBitcoin and estimate potential earnings.

About the project

Until 2018, the only methods for distributing tokens on Ethereum were token sales and airdrops.

For this reason, InfernalToast proposed the EIP-918: Mineable Token Standard and the 0xBitcoin token based on it. The project community continued its development. As of writing, the number of addresses holding 0xBitcoin (0xBTC) exceeds 7600.

Users receive 0xBTC as a mining reward. To do this they compute hash function values using the SHA3 algorithm as specified in the 0xBitcoin smart contract 0xBitcoin.

The token is protected against 51% attacks at the network level. In December, Ethereum’s hash rate crossed the 800 TH/s mark: to capture control of the blockchain for an hour, attackers would need more than $2 million. In such conditions the attack becomes uneconomical.

Thanks to the ERC-20 standard, 0xBTC is compatible with DeFi services. The 0xBitcoin community is developing the DAO The Guild, where you can stake 0xBTC and receive tokens Guild Reserve.

0xBitcoin Tokenomics

The 0xBTC developers designed the token as a means of payment and store of value on Ethereum. They compare 0xBTC with Wrapped Bitcoin (WBTC), but this is not entirely accurate.

WBTC is a centralized token issued by BitGo in exchange for bitcoins at a 1:1 ratio. 0xBTC has no issuer or backing. It is linked to limited supply and decentralization.

0xBitcoin trades on the decentralized crypto exchange Uniswap. At the time of writing, its price was $3.4.

Emission of 0xBitcoin is 21 million tokens. To date, miners have mined about 8.5 million tokens. At 10.5 million, the 0xBTC mining reward will halve.

As of writing, the average block time is 5 minutes, and the reward for finding it is 50 0xBTC.

Mining the tokens

We tried mining 0xBitcoin on a home computer with an Nvidia GTX 1050 Ti GPU.

First we installed the Cosmic app. It is designed for Nvidia GPUs; for AMD you need to download the utility MVis.

Configured Cosmic: selected the Options → General Setup menu item, then entered the Ethereum wallet and the pool address mike.rs in the dialog. Clicked Save Changes.

After finishing the setup, we pressed Start Mining. The app connected to the pool and began mining 0xBTC. 

Remember that Cosmic uses the maximum number of GPU threads by default. In our case, mining with 24 threads heated the GPU to 80°C in a few minutes.

To adjust the number of threads, right-click the device and select Configure GPU.

In the settings window there are two options: the thread count slider and device monitoring.

We moved the slider from 24 to 16 threads, i.e., reduced the load by 33%. The GPU temperature dropped to a stable 65-70°C.

Additionally we enabled overheating and fan-speed drop warnings.

If you don’t want to reduce mining speed, install MSI Afterburner or another app that allows you to adjust the device’s temperature profile: raise the fan speed or lower the core voltage.

Cosmic does not display the amount of 0xBTC mined — you must check it on the pool site. To go to the site, open the list of active miners and find your Ethereum wallet address.

Mining profitability

Over 12 hours we mined 0.04 0xBTC. With a steady 50% load, the GPU consumed about 35 Wh and burned 420 Wh of electricity.

At the price at the time of writing, daily mining profit for 0xBitcoin was $0.27. We accounted for electricity costs and neglected GPU wear and tear.

When transferring tokens to a wallet, the miner pays Ethereum transaction fees. The pool recommends monitoring gas prices so they do not erase profits.

Conclusion

0xBitcoin is a decentralized ‘Bitcoin’ on Ethereum, which can be compared to the original cryptocurrency in its early days.

The project community is small, and 0xBTC mining is pursued mainly by enthusiasts. Nevertheless, the token is traded on Uniswap at around $3.4.

Limited supply and compatibility with DeFi protocols could positively influence 0xBitcoin’s image and attract new users.

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