Gaming hardware manufacturer Razer has launched a cryptocurrency mining program named Razer SoftMiner to put spare graphics card capacity to work—for them, not for you.
Some context: Mined cryptocurrencies (be they bitcoin, ether, etc.) operate by using a distributed network of processors to verify transactions and generate new coins by solving complicated maths problems (mining). Those new coins are then handed out to the miners as a reward. This process takes a lot of power—by some estimates, cryptocurrencies now consume electricity on a level equivalent to a country like Denmark.
As cryptocurrencies have rapidly expanded, so too has the complexity of the maths problems that the network is asked to solve. That means it can become unprofitable to keep mining as the network demands more work for the reward; the age when home computers were able to generate most cryptocurrencies at any scale, or at a profit, is on its way out.
Have a gaming rig on idle at home? Here's a new way to score Razer Silver: launch Razer SoftMiner on your PC and start racking up Silver—one step closer to the reward you want, for doing nothing at all.
— R Λ Z Ξ R (@Razer) December 12, 2018
However, there is a way to keep mining cryptocurrencies at a profit even when the cost of electricity and equipment outstrips the gains: not paying for either. For example, criminals have used malware to create botnets that mine cryptocurrency on infected machines.
Here’s where we get back to Razer. SoftMiner is a mining software that generates some sort of cryptocurrency. But according to Razer’s announcement, users running the software don’t actually receive any of it. They instead get “Razer Silver,” a form of company scrip that can be redeemed towards purchases on the Razer store:
Razer Silver is not a cryptocurrency, it is a loyalty rewards program. We work with crypto mining technology to harness your computer’s GPU. In turn, we award you with Silver, giving you access to Razer’s ecosystem and suite of rewards.
This is entirely different; while prices of cryptocurrencies can fluctuate wildly, most of them are open-source and operate on clear mathematical principles. Razer offers few details on how it calculates Razer Silver payouts, only stating that you can earn “500 RAZER SILVER OR MORE IN A DAY.” Instead, it recommends having a suitably powerful graphics card and allowing the software to suck up any unused cycles from it:
We highly recommend running SoftMiner on a computer with a GPU of at least a Nvidia GTX 1050 or AMD RX 460.
Under Settings, switch on Auto Mode.
Select this option if you prefer SoftMiner to launch and run automatically in the background, earning you Razer Silver when your computer is idle.
More worryingly, the agreement users sign upon installing the software suggests that Razer has total control over the utility of Razer Silver and can invalidate or refuse to accept it at any time:
Razer makes no guarantee as to the nature, quality or value of the features of the Service, Software or any third-party content, goods or services that will be accessible through the use of the Virtual Credits, or the availability, supply, or redeemability of such Virtual Credits. Razer reserves the right, without prior notification, to limit the quantity of Virtual Credits and/or to refuse to provide you with any Virtual Credits. Price, exchangability, and availability of Virtual Credits are determined by Razer in its sole discretion and are subject to change at any time without notice.
The announcement page even notes that despite the likelihood Razer SoftMiner will slow down your computer, “high traffic on the application” will result in users earning less Razer Silver!
*Expect a slower earning rate when there is high traffic on the application.
... Razer SoftMiner uses a substantial amount of your GPU power to ensure you get the highest Razer Silver yield possible. Hence, when the application is running, your PC will likely run slower than its usual speed.
So, Razer SoftMiner may slow down your computer, wearing down your parts, and in exchange, you basically get the equivalent of those prize tickets that come out of arcade machines. But that’s something, right? And you don’t need to do anything at all.
Not so. Take a look at some of the things on the Razer Silver Catalogue. There’s a handful of deals that are not bad—such as $US5 ($7), $US10 ($14), and $US20 ($28) vouchers towards purchases that cost comparatively low amounts of Razer Silver. But a $US12 ($17) dollar Amazon gift card takes 17,000 Razer Silver to obtain, or 34 days at the 500-a-day rate. So you’re getting about 35 cents ($0.49) a day towards the purchase, a rate that held up compared with several other items on the store.
Now think about your power bill.
Razer Senior PR Manager Kevin Allen told Gizmodo via email that the recommended GTX 1050/AMD RX 460 setup should generate that figure of 500 Razer Silver a day. The software “aims to use 100% of the GPU,” he added.
The GTX 1050 draws about 75 watts. That doesn’t include other system components (though Allen said that SoftMiner does not utilise spare CPU cycles “at this time”) or any power supply inefficiency. So for the sake of argument, let’s go with a conservative 100 watts.
100 watts is 2.4 kilowatt-hours a day. U.S. Energy Information Administration data shows that the average cost of a residential kilowatt hour is $US0.13 ($0), meaning that running SoftMiner for 24 hours costs 31 cents ($0.43). Many areas with higher power costs would be even more expensive.
Look, these are ballpark estimates. But what I’m getting at is that using current figures available via Razer, running SoftMiner gets you at best a couple cents towards a purchase per day when power bills are factored in, and that’s probably being generous. That’s not even counting wear and tear on your computer.
Also, your Razer Silver is only good for a year before it starts to vanish at the same rate it was generated, according to the website:
... There is a 12-month validity period from the date of Razer Silver earned or claimed. You are encouraged to redeem your rewards before the Razer Silver expiration reaches 1 year.
If you do generate 500 Razer Silver a day, you can theoretically generate 182,500 Razer Silver over the course of a 365-day year. Several items redeemable in the Razer Silver Catalogue cost significantly more than this (like the Huntsman Elite keyboard at 280,000), meaning you can never actually obtain them if you only generate 500 every day.
Asked about this, Allen responded that users can plump up their Razer Silver hoards by purchasing more stuff via Razer or using other Razer products:
Razer Silver is part of a larger services ecosystem whereby the user can earn more Razer Silver by purchasing with Razer Gold, being active in the Razer community (Insider), playing games (Cortex), or engaging with our other partners platforms (ex. Mogul Arena). This program is more about the sum of the parts than just earning with just Razer Softminer.
This is a tidy little arrangement for Razer. SoftMiner users subsidise the electrical bills and equipment costs for the company to generate bitcoins or whatever. Meanwhile, Razer can unilaterally adjust the effective value of Razer Silver at any time by changing the cost of products in the catalogue, as well as pick and choose what things can be purchased there.
Why this exists at all is a mystery—perhaps the idea was settled on before 2018's devastating crash in cryptocurrency markets put a dint in the blockchain fever. But what is much clearer is that no one is forcing you to download SoftMiner.
Update: 12/13/2018, 12:10 a.m. ET: Per Motherboard, Razer has clarified that they don’t get any of the resulting cryptocurrencies—they go to GammaNow, a company that Razer is both a partner and investor in. Razer just picks up a fee on the deal:
Instead, according to the company, gamers running Razer’s mining software on their machines will be contributing to a platform called GammaNow that Razer is partnered with. GammaNow will manage the mined cryptocurrency—which includes ether, the native token of the Ethereum blockchain, as well as a rotating cast of other tokens—and in return give Razer a fee for convincing customers to contribute computing power. Users will receive loyalty points called Silver that can be redeemed for a discount on Razer products.
“The cryptocurrency that’s being mined through this program is not touching Razer’s hands nor the user’s hands,” said Razer spokesperson Kevin Allen in a phone call. “We get a fee from the third party for generating cryptocurrency.”
Correction: This article listed XRP as a mineable cryptocurrency. It is pre-mined. We regret the error.