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Malaysian Authorities Bust Crypto Miners For Stealing $600K Worth Electricity

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The cryptocurrency ecosystem has gained tremendous popularity and value over the last decade. The cryptocurrency mining industry, specifically, miner rewards has caught the attention of many. The rewards that miners earn after mining every block seems to have opened doors for many crypto miners as they have been flooding the ecosystem regardless of the resources. In more recent updates, two crypto platforms were raided by Malaysian officials for stealing electricity to facilitate crypto mining operations.

Malaysia’s Big Crypto Mining Arrest

As reported by The Star, a total of 2.5 million Malaysian Ringgit [600,000 USD] worth of electricity was stolen over a period of three years in Iskandar Puteri. The raid was carried out by Malaysia’s Energy Commission along with Tenaga Nasional Berhad [TNB], a multinational electricity company along with Iskandar Puteri City Council.

TNB reportedly incurred a loss of 80,000 Malaysian Ringgit every month which was about 20,000 USD. Nazlin Alim Sadikhi, the Regional Director of the Energy Commission revealed that illegal wiring was installed to make sure that the electricity went through directly and not through the TNB meter. The Director further said,

“The first premises is believed to have been operating for three years while the second premises for two years. We found 100 mining machines in the first premises and another 48 in the second premises.”

Post the raid, the authorities concluded that the electricity bills for both the first and the second premises accounted for 30 Malaysian Ringgit and 60 Malaysian Ringgit a month, respectively, as opposed to the 80,000 Malaysian Ringgit.

It is not news that crypto mining consumes a lot of electricity. Reports even suggest that crypto mining accounts for 0.21% of the world’s electricity supply. If the accused are found guilty, they would be obligated to face a total of ten years in prison or a hefty penalty of $1.2 million, under Section 37 of the Electricity Supply Act of 1990.

After China, Malaysia seems to be a hotbed for electricity thefts, particularly for crypto mining. In 2020 alone, Malaysian authorities reportedly took down about 90 such operations. A total of 288 mining busts have taken place in Johor since 2018. TNB’s Team Engineer, Mohd Satari Mohamad added,

“In most cases, the owners of the premises were in cahoots with the cryptocurrency mining operators. They have similar operation methods where they have illegal wiring installed to the mining machines to illegally draw electricity supply.”

Dogecoin Clinches Top Position Among Most Profitable Altcoins to Mine

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An altcoin that only started as a meme/joke coin in 2013, is gaining traction as one of today’s most speculated coins. Apart from its price rallying upwards by extreme percentages, Dogecoin sets itself apart as a profitable altcoin for miners. The original design of Dogecoin was inflationary, and this is the main factor in the mining benefits of the coin.

Dogecoin Value has Grown , Posting High Percentage Spikes Over the Past Few Weeks

Unlike Bitcoin, whose mineable limit is within a total supply of 21 million Bitcoins and only 6.25 Bitcoins per block reward (currently); Dogecoin’s mineable coins are unlimited and its blockchain pumps at least 10,000 Dogecoins into circulation every 10 seconds.

The value of the digital coin has grown and last week saw a 50% spike. Dogecoin has recorded the highest single day  gain since 2017 and according to google trends keyword search metric, “How to Buy a Dogecoin? “It rose from a score of 25 to 100. Therefore recording the highest possible popularity for a google search over the last one year. As a result, the performance has warmed up the cryptocurrency community including miners and traders. 

Factors to Consider Before Mining a Digital Coin

While the surging price of a coin is not the motivating factor surrounding a spike in the interest of the miner. Dogecoin has emerged as the favorite altcoin for crypto miners, given its high mining rewards that beat some of the leading coins, such as Bitcoin SV and Bitcoin Cash. Some of the factors miners consider before choosing a coin to mine are block reward, cryptocurrency price, equipment efficiency, halving and block generation duration. All these factors seem to be aligned in favor of Dogecoin. For instance, the altcoin has a block generation time of 60 seconds, and a block reward of 10,000 coins.

Conclusion

The coin’s scrypt protocol sets Dogecoin’s mining equipment apart, compared to other coins; because its equipment is affordable and efficient. 

Crypto Mining Scam Creator Imprisoned after Pleading Guilty in U.S. Court

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A Romanian developer pleaded guilty to his role in the Bitclub Network, a crypto mining scam that hoodwinked investors off $722 million. The developer was sentenced to five years in prison and a fine of $250,000.

According to a press release from the U.S. The Department of Justice, Silviu Balaci was arrested at his residence in Germany. In addition, the release notes that the Romanian pleaded guilty to a dual-object conspiracy to commit wired fraud through video conferencing.

Balaci was the mastermind behind crypto mining scam

Indeed, one of the key figures behind the Bitclub Network was the Romanian programmer, who duped investors off $722 million. Notably, the crypto mining scam has attracted U.S. investors to invest in alleged shares in a cryptocurrency block reward mining project. The crypto mining scam ran between April 2014 and December 2019.

Balaci, along with his colleagues Matthew Goettsche and Russ Albert Medlin, was reportedly in charge of the company’s technical areas. According to DoJ’s press release, Balaci referred to potential investors as “dumb” and said they were “building this whole model on the backs of fools.”

Bitclub Network co-founder indicted

In addition, Balaci’s sentence comes three weeks after the arrest of the other founder of Bitclub, Russ Albert Medlin. In addition, Medlin has been apprehended by the Indonesian law enforcement authorities and is facing charges against sexually assaulting minors.

The Indonesian police arrested him after he had been informed by his neighbours in Jakarta, who had seen some minors leaving his residence. In conclusion, if Medlin is sentenced in Indonesia, he may face up to 15 years behind bars for violating the law of land on the protection of minors. However, he is likely to be extradited to the United States for his role in the crypto-mining scam.

Illegal Crypto Mining in Russia Costed Taxpayers $6.6M in Over 3 Years

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Illegal crypto mining operations in the Russian Federation have stolen electricity worth nearly $6.6 million in the last three years. According to state-owned power distributor,  Rossetti, illegal mining farms, compromised power meters and underground mining farms helped illicit cryptocurrency miners to illegally consume 450 million Russian rubles ($6.6 million) worth of electric power from the domestic power providers.

The electricity firm disclosed the figure on its official Telegram channel. The firm has been hunting ‘black mining sites’ that do not have any sort of deal with power companies, but still use the national electricity grid to mine digital currencies without paying. 

According to the firm, black mining sites are usually based in the office of already established businesses including factories where the owners want to earn extra funds. Additional black mining sites include actual food farms, garages, strategic sites in the woods and leased offices.

According to Rossetti, the illegal miners would pull an electric cable to the closest electricity line and develop their own power transformation stations. For instance, in one of the discovered black mining sites; the power transforming station was found underground buried under a public forest; as per the power distributor.

The state-owned power company has discovered 35 illegal mining operations from 20 different regions in Russia since 2017. According to Rossetti, each of those cases have been reported to law enforcement. 

“We closely analyze the consumption patterns looking for anomalies, inspect the power lines and measure the workload of the stations. Sometimes it’s easy to notice a mining farm by visual signs, like when a building has powerful air conditioning devices and fans installed,” said Rossetti. 

Illegal crypto mining has been rampant in Russia

Over the past one year, people have been minting digital currencies illegally in Russia at a nuclear research institute and utilizing the website of a domestic utilities solution provider. On the other hand, Rossetti has been researching on how to utilize the same technology; to discover new ways of using distributed ledgers to effectively amass power consumption data. 

Nasdaq Listed Riot Blockchain Sees Slight Growth in Q1 2020

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 Riot Blockchain, which is a public digital currency mining firm, saw a slight increase in earnings per share (EPS) during the first quarter of 2020. The Bitcoin mining outfit shared its financial results and highlights for the quarter ended on March 31, 2020.

Nasdaq listed Riot Blockchain is making significant progress in the market. In its announcement, the mining company revealed the conclusion of the SEC investigation, and the complete revamp of mining rigs in its Oklahoma mining farm. The firm wrote:

 “As compared to the same period last year, during the quarter ended March 31, 2020, Riot announced increased revenues and decreased SG&A expenses excluding stock-based compensation. As compared to December 31, 2019, the Company has substantially improved its liquidity position and increased total stockholder’s equity.”

Nasdaq listed Riot Blockchain installs next generation Bitmain S19 Antiminers

In its announcement, Riot emphasized the successful stationing of the 4,000 Bitmain S17 Pro Antminers purchased late last year; and the addition of the 2,040 Bitmain S19 Antminer revamped in April 2020.

Following the spread of the COVID-19 pandemic, the BTC mining outfit shifted a substantial amount of its S17 Antiminers; to a mining facility in New York which is run by Coinmint. Riot contemplates the new mining equipment will raise the firm’s current average hash rate by a massive 84%. Riot plans to station the new rigs by Q3 this year. 

Q1 2020 Riot Blockchain financial results 

According to the report, Riot Blockchain launched 281 freshly minted BTC coins during Q1 of 2020. The firm grew its Bitcoin directory by 60%, to 821 BTC between December 31, 2019 and March 31, 2020.

In addition, Riot Blockchain saw boosted business assets on March 31 this year, rising from $9.3 million on December 31, 2019, to $17 million on March 31, 2020. Moreover, the firm reduced its total liabilities by $300,000, to $3.8 million within the same period.

In conclusion, the mining firm reported that total mining income grew by 68% to $2.4 million, in contrast to the $1.4 million made during Q1 of 2019.

Post- Bitcoin Halving Could see 30% of Miners Close Shop as Business Turns Unrewarding

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Almost a third of bitcoin mining farms could shut down their mining machines as business turns unprofitable post-bitcoin halving, as businesses turn unprofitable due to the lowering of BTC mining rewards.

The third bitcoin mining event that was completed yesterday slashed the supply of bitcoin, reducing the incentives paid to miners for their efforts by half to 6.25 BTC per block. According to the vice president of Poolin Mining Pool, Alejandro De La Torre, BTC miners who make up 15 percent to 30 percent of the total bitcoin network hash rate are already in the process of shutting down their equipment as profit margins fall.

Miners with outdated rigs to shut down post-bitcoin halving

Indeed, mining companies that use old obsolete mining rigs such as the Bitmain S9 miner, which consumes more energy, will have to be the most affected, according to Poolin’s vice president. In his recent analysis, he wrote:

“We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.”

Occasional halving events put a lot of pressure on the miners, as the incentive has a 50 per cent effect on the revenues produced by the mining companies. Nevertheless, some experts believe that the dip in income is indemnified through a spike in the price of the flagship digital currency; an accomplishment often associated with the past two halvings. Regardless of the argument, the less effective mining firms will be pushed out of the game easily.

Bitcoin mining is all about durability

According to Poolin VP, this is a long game that relies on durability and survival. He claims that mining companies that are unable to reduce the cost of mining to keep up with the most powerful mining rigs on the market must pay the price.

No matter how miners feel about their revenues, the new bitcoin halving event means their rewards; it will be halved for every block mined. Post-bitcoin halving, bitcoin network complexity, total hashrate, and the price of bitcoin could be big statistics to keep an eye on.

Microsoft Files Patent for New Crypto Mining System Using Human Activity

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Tech giant Microsoft is planning to develop a cryptocurrency mining system that allows people to mine digital currencies using human body activity data. This will banish the use of specialized cryptocurrency mining equipment.

On March 26, the global corporation published a patent with the name “Cryptocurrency system using body activity data.” According to well-detailed documentation, the latest crypto-mining method would use the data obtained from an individual’s body activity, using the latest proof-of-work system.. The patent reads:

“Instead of massive computation work required by some conventional cryptocurrency systems, data generated based on the body activity of the user can be a proof-of-work, and therefore, a user can solve the computationally difficult problem unconsciously.”

To initiate a mission, the server assigns an activity to the user’s gadget that is linked to the server. The gadget has a special sensor that detects the user’s human body activity. In addition, the cryptosystem verifies whether or not the activity of the body meets the requirements of the cryptocurrency system.After that, the system would reward the user with cryptocurrencies once the data has been verified.

The system encourages people to perform certain tasks

According to Microsoft, this system could be used to encourage and motivate people to perform certain tasks. Scanners can detect other human behaviors, such as cognitive alertness when reading ads that can validate the user’s blocks of digital currency.

“For example, a brain wave or body heat emitted from the user when the user performs the task provided by an information or service provider, such as viewing advertisement or using certain internet services, can be used in the mining process,” reads the patent application.

A Dutch firm back in 2017 investigated whether humans would generate enough energy to mine digital currencies. The firm found out that body heat from 37 individuals after running the test; fetched over several hours, provided just enough computing power for just eight days to mine crypt.

However, it is still uncertain if this project will be built on a dedicated blockchain network, or if the behemoth technology would build its own blockchain ecosystem. Similarly, it’s still not clear if Microsoft is going to go on with the project. In addition, in the patent application, Microsoft also emphasized that its latest project would be completely centralized.

Blockchain patents on the rise

Tech firms around the world are always experimenting with blockchain technology and digital currencies to stay ahead of their competitors. In the United States, the United States Patent and Trademark Office has issued 227 blockchain patents on its own since 2014 and last year in October.

Just recently, IBM tech company applied for a blockchain patent to create a token dubbed “self-aware token.” The project is based on a proposal that, as new payment methods emerge, it will raise questions about the ability to authorize, authenticate and coordinate transactions over a myriad of platforms.

In addition, Coinbase’s CEO, Brian Armstrong filed a blockchain patent; that comprises a method for individuals to send bitcoin using email addresses without having to pay for the transaction.

 

Ripple’s Brad Garlinghouse Comments on Massive Amount of Energy Consumed by Crypto Mining

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Cryptocurrency mining has always had a bad reputation among the masses due to the sheer amount of electricity and effort it consumes. Bitcoin mining took most of the hits after several reports were published on resource waste and its astronomical costs.

Recently, a new report released by the Telegraph reported that Bitcoin used more energy per transaction than the British household used in two years.  Ripple’s Brad Garlinghouse, Chief Executive Officer, has commented on the issue and how it impacts global warming.

The report stated that the amount of energy required to mine one Bitcoin rose to a record of 77.78 terawatts per hour. This count was so high that it equaled the entire energy consumption of Chile.

Statistics have shown that the carbon footprint of a single transaction is the same as 780,650 Visa transactions or 52,043 hours of YouTube streaming. The numbers were clocked by Alex de Vries, a blockchain specialist at PriceWaterhouseCoopers [PwC]. Mr de Vries added:

“People react with disbelief, but the figures are true. They [miners] are sort of participating in a massive lottery and every 10 minutes one gets lucky and gets to produce the next block. The shocking thing is the average lifetime of a bitcoin mining machine is one and a half years, because we have a new generation of machines which are better at doing these calculations.”

Every Bitcoin transaction uses around 657.39 kWh of electricity, a measure of the astronomical lengths that miners go to collect the world’s largest cryptocurrency. At least 98 percent of the devices during their lifetime will find it impossible to make a calculation that leads to a Bitcoin being mined.

The environmental effects have usually been shunned by cryptocurrency miners and that was something Ripple’s Brad Garlinghouse agreed with too. He stated that the current climate crisis needs to be taken care of and that crypto-mining could be refined.

Garlinghouse may have been optimistic because Ripple’s native XRP cryptocurrency was a non-minable cryptocurrency. The backlash had an impact on the market with businesses like Mattereum attempting to set up a blockchain to record the provenance of the items. The items roster comprised of items such as fine wines, memorabilia or carbon offset certificates. Officials in the digital asset world have admitted that with the progress of technology, the process of mining must improve it.

 

 

Ethereum Classic [ETC] Cannot be Mined with Antminer E3 anymore!

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On 24th February, 2Miner the popular Altcoin mining pool announced that Ethereum Classic mining had a sudden drop of hashrate with Antminer E3 [ETC mining hardware] for which complaints from multiple people were registered.

Antminer E3 was released in the summer of 2018 and the product is by Bitmain, the mining giant. It’s the world’s first Ethash ASIC miner and the profitability of an Antminer E3 is higher than the profitability of an ordinary GPU mining rig. Some details of the product are as follows:

Announced hashrate: 180 MH/s
Actual hashrate: 200 MH/s
Power consumption: 800 W
Retail price: $1,800 ($800 for the very first batch)

From 21st February, 2Miner has been receiving complaints. Miners reported that hashrate had dropped significantly. The miners said that the Antminer E3 was mining Ethereum Classic [ETC] at 30 MHZ from the past 3 hours while the factory declared hashrate of Antminer E3 is 180 MH/s and the reported hashrate is even more.

In the official statement, they mentioned receiving “a lot of requests last week on Telegram Support Chat and 2Miners Helpdesk” about the inconvenience, everyone was experiencing to mine ETC. “We have investigated this issue and the conclusions are disappointing.” said the team.

The problem.

To mine an Ethash algorithm every GPU needs to download a heavy file called DAG [Directed Acyclic Graph] at the beginning of the mining process. The DAG [Every 30 000 blocks, a new piece of data (a DAG) is used for mining new blocks] grows more in every round of Epoch.[ Each new group of 30 000 blocks is known as an epoch]. Which is the major reason why memory matters a lot in Ethereum mining? Ethereum Classic has 328 mining epoch while Ethereum has 318. With investigation, 2Miner found out that the DAG file increment was the reason Antminer E3s had such a drop in its hashrate for ETC.

2Miner reported this issue and informed Bitmain, to which it responded saying:

“Thanks for your consultation!

Sorry for your inconvenience we got the confirm from technical department
E3 miner is a 4G video card. E3 is related to eth algorithm, and DDR capacity is up to the upper limit, so E3 will not be able to continue mining.

the meaning is E3 only can mine to January 2020, then will not mine again

Please let us know if you have additional questions or concerns.”

As per Etherscan.io the avg. ETC block time is about 13 seconds. Each epoch is 30,000 blocks. Making it approx. 45 days for ETC to reach 328 epoch. Indicating that Antminer E3 would stop mining Ethereum Classic by 8th April 2020.

Iran Issues 1,000 Licenses To Crypto Miners

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As per sources, the government of Iran has allowed licenses to over 1,000 cryptocurrency mining entities. These licenses are issued by the Iranian Ministry of Industry, Mining, and Trade. This decision has given benefits to large firms established in the country. On the contrary, many small investors are away from the project due to higher electricity taxes which have proved to impede them.

 In an interview with IBENA news agency, an official with ICT Guild Organization of Iran said that the industry of cryptocurrency mining is new and has attracted many people in Iran towards itself. Amir Hossein Saeedi Naeini stated that:

 “The Ministry of Industry, Mine and Trade has issued more than 1,000 licenses for cryptocurrency mining in the country.”

 Saeedi Naeini further added that Iran’s researches show that the crypto mining industry can generate $8.5 billion for the economy.

 Electricity Costs – A Leading Impediment

 As the country is grappling with economic problems and the U.S. has sanctioned, Saeed Naeini believes this decision will help improve Iran’s economy. However, he discussed that the electricity cost is a leading impediment for the miners in the country. Moreover, a high number of large mines have been established. To the news agency, he said:

“High electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”

 He said that the industry’s operating conditions should be in a position so that everyone, from large to small firms, can enter in it. Further, he emphasized that modification in electricity costs and terms could help boost the cryptocurrency mining industry and can generate a significant amount of revenue.

 Cryptocurrency Mining Law of Iran

 The cryptocurrency mining industry of Iran is established last year and was officially recognized by the government of Iran. It is necessary that ahead of operations, crypto miners should have a license issued by the Ministry of Industry, Mine, and Trade.

 Furthermore, the decision of recognizing the industry faced severe criticism by several authorities in the government. The authorities accused crypto miners of consuming more electricity. Last year, in June, it was reported by the state’s television that the authorities had seized about 1,000 mining machines. These mining machines were seized in two deserted factories on the charge of consuming subsidized electricity of the government.

 However, the official Saeedi Naeini said to IBENA that debate is under discussion for creating a favorable environment for the cryptocurrency miners.