Can The Cloud Print Money?

Posted on March 30, 2011

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No, I don’t mean providing infrastructure, platform, or software as a service as Amazon, Google, Salesforce, and numerous others do today, but in terms of generating digital currency – BitCoins.

If you haven’t heard, BitCoin is an experimental peer to peer digital currency currently in virtual circulation. There are about 5.7 million BitCoins in existence according to BitCoinCharts, a website that provides financial and technical data related to the Bitcoin network.

According to BitCoin’s own site, “The competition for coin creation will drive the price of electricity needed for generating a coin close to the value of the coin, so the profit margin won’t be that huge.” They also state that it would take “a year on average to generate 50 coins with a typical PC”.

I wondered whether one could find compute power at a cost low enough to generate BitCoins profitably.

Enter SpotCloud, a Cloud Capacity Clearinghouse and marketplace that enables organizations to buy and sell compute capacity.

Could one or more SpotCloud compute instances (currently starting at $0.001 cent an hour) compute enough hashes per second of BitCoin’s algorithm to produce a net positive financial gain, in effect printing money?

A year of compute is 62,320 hours (to generate 50 BTC) x $0.001 (on SpotCloud) = $61.32. Given BitCoin’s current exchange rate of around $0.80 cents on the BitCoin market x 50 coins = $40. Not a money making proposition. Though it’s unclear what the BitCoin team means by a “typical PC”.

If you’re curious about the arbitrage possibilities, here is a BitCoin generation calculator.

What’s more interesting to me is how quickly people are looking at the Cloud not just to hack passwords or arbitrage possibilities, but for all kinds of possibilities, limited only by our creativity.

If you’re in the mood to donate some BitCoins feel free to send them here:

1ExR3LMmuEptF7THEK823djU6uDftY6az

Tune The Future

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