![]() ![]() The cryptojacking problem, in fact, is much worse than it was when I wrote my article Top Cyberthreat Of 2018: Illicit Cryptomining in March 2018 – just as I had warned. Cryptojacking means introducing crypto mining software onto a target victim’s computer without their knowledge, thus generating crypto for the hacker while stealing processor cycles and electricity from the victim. Illicit cryptomining, colloquially known as cryptojacking, has surpassed ransomware as the most popular form of cybercrime targeting enterprises. One silver lining: there may be a possibility these stiffed utilities will eventually get some of their money back, as Giga Watt raised about $22 million in its ICO – and it’s possible the scammers were unable to spend or secret away all of the proceeds before the bankruptcy shut them down.Ĭrypto Mining Business Model #4: Cryptojacking ![]() “Creditors include the utilities provider in its Douglas County base, having a claim of over $310,000, and electricity provider Neppel Electric, which is owed almost half a million dollars.” “U.S.-based bitcoin mining firm Giga Watt has declared bankruptcy with millions still owed to creditors,” writes Yogita Khatri for Coindesk. This is the story of one of the Washington State mining companies. Many more instances are sure to be out there, as yet unreported.Īnother popular, if potentially unintentional, way to steal electricity: set up a mining operation, take the profits, and then go out of business. This story is one of many, notable merely for the fact that the perpetrator was caught and the story appeared in the local paper. He also had to reimburse the electric company for the stolen power and forfeit his equipment. ![]() What happened to the thief? “Xu Xinghua was sentenced to three years and six months in prison for committing theft and was fined 100,000 yuan ,” she reports. “Xu Xinghua mined a total of 3.2 bitcoins, earning 120,000 yuan, and the electricity generated by the stolen electricity was 104,000 yuan.” “The coin ‘mining machine’ and three electric fans were operated for 24 hours,” she continues. “A Shanxi Datong man named Xu Xinghua stole power from the poles near the West Second Plant of the Kouquan Railway, which was borrowed from November to December 2017,” reports Liu Yulin, writing in Chinese for The Paper (translation by Google). Today, in contrast, stealing electricity is serious business. In the early days of Bitcoin, college kids would plug their rigs into dorm room sockets, stealing a bit of juice from their alma maters. He wanted to start with ten devices installed at his factory because it can legally use extremely cheap industrial electricity.”Ĭrypto Mining Business Model #3: Steal ElectricityĬutting electricity costs out of the equation entirely is an obvious way to improve the profitability of crypto mining. “I recently set up a rig for a middle-aged customer who was not tech-savvy at all and had simply heard of mining and its potential profits. If not Washington, then, what about Iran? “I come across some very interesting cases,” notes Mohsen Rajabi, an Iranian blockchain entrepreneur. “Margins grew so thin-and, in fact, occasionally went negative-that miners had to spend their coins as soon as they mined them to pay their power bills,” Roberts adds. “Most of the surplus is exported, at high prices, to markets like Seattle or Los Angeles, which allows the utilities to sell power locally at well below its cost of production.”īy 2015, however, the Washington Bitcoin mining craze had run its course. “The region’s five huge hydroelectric dams, all owned by public utility districts, generate nearly six times as much power as the region’s residents and businesses can use,” explains Politico journalist Paul Roberts. In Washington State, hydroelectric power generates far more juice than locals can consume, thus attracting a booming business in crypto mining. What, then, are the remaining mining business models? Let’s take a closer look.Ĭrypto Mining Business Model #2: Subsidized Electricity Mining ![]()
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