Caught Crypto-handed: Four Cases of Illegal Crypto mining

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Crypto mining is a very energy-intensive enterprise, which makes finding a cheap and renewable source of electricity almost essential if a profit is to be made from the enterprise. Unfortunately, some amateur miners have taken an extreme approach to obtaining affordable energy – stealing it. We run through four such cases to highlight the variety of attempts made at mining crypto on someone else’s dollar.

Fed up With Bitcoin

The Federal Reserve is, you would have thought, one place where talk of cryptocurrency is not to be countenanced, let alone owning any. Communications analyst Nicholas Berthaume bucked the trend however when he used the Fed’s servers to mine Bitcoin in March 2012, creating a backdoor for remote control of the operation. Berthaume keep the scheme going until June 2014, by which time he probably thought he was good for the long run. He was undone after the mining software was flagged up as a security breach however, and two years later was sentenced to one year of probation and fined $5,000 for his efforts.

Principles of Crypto Mining

Chinese school principal Lei Hua and vice principal Wang Zhipeng were caught operating numerous GPU mining rigs from one of the school’s dorms in November 2018, stealing over $2,000 worth of electricity from the school in order to fund their mining exercise. Hau had initially set up a rig at home, but had been dismayed at the electricity costs, so he moved the rigs to the school and roped the Zhipeng into helping him. Soon however students and teachers became alarmed at the strange “roaring” noises they were hearing around the school. This was coupled with the fact that the computer’s networks had slowed dramatically and the electricity costs had almost doubled during the four months they were able to get away with the scheme. Hua was fired, while Zhipeng somehow kept his job.

The Nuclear Option

Russia has a way of taking things to the extreme, and such was the case with a group of nuclear scientists who tried to mine Bitcoin with one of their supercomputers. The supercomputer in question boasted a capacity of 1 petaflop, the equivalent of 1,000 trillion calculations per second, which sounds like it could blow a Chinese mining farm out of the water, were it placed there. However, had they managed to start mining Bitcoin with the supercomputer they would have found that they would have been better off running a bog standard ASIC miner thanks to Bitcoin’s SHA256 hashing algorithm. They never got this far though – they were busted when the computer, which was supposed to remain offline, was connected to the internet. The men were arrested and handed over to the FSB, which is never a good end to a story.

Stay in School

It’s not just staff mining crypto on the school’s dime, unsurprisingly students are in on the act too. Students have been known to have used college/university campus electricity to mine crypto from their dorms since early 2018. This is no surprise since campus electricity costs are either non-existent or are bundled together with other living costs so students don’t pay for what they individually use. The electricity usage is often measured by the building, meaning that perpetrators are difficult to isolate, leaving students free to mine crypto with a vastly reduced risk of getting caught. A Cisco study in February 2019 found that colleges were the second biggest source of crypto mining traffic in the U.S., showing that this is far from a niche problem.

You Can Run (a Mining Rig) but You Can’t Hide!

Setting up your farm next to a source of naturally renewable energy is clearly the best way to go if you have your heart set on crypto mining. Stealing electricity clearly only works for a short period of time before someone notices, and you can’t exactly explain away 30 GPUs all making the sound of a giant swarm of angry bees. If you want to generate some coins, best stick to masternodes.