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Police in Klingenthal – a town in the Vogtland region, Germany – has arrested five men and woman for allegedly stealing a significant amount of electric power to mine cryptocurrencies. It’s not the first time that people have been arrested over claims of mining millions of dollars-worth of cryptos using stolen power; similar cases have been reported ever since the boom of cryptocurrency mining.
Crypto mining is basically profitable in countries where electricity is cheap. Sadly, it is not cheap enough to make crypto mining profitable In Klingenthal. A sum of 121 people in total that include police officers, mobile force tasks, prosecutors, and tax inspectors had been searching for various properties in the Zwickau area and Vogtland. They found exactly what they were looking for in a small town of Klingenthal.
The operation specialists discovered a large-sized computer farm especially designed for mining. There was a total of 49 computers in operation and 30 of them were equipped with mining specific hardware. 80 graphics cards were installed in the system. This illicit crypto mining operation was hidden under industrial shelters, which illegally received electricity, bypassing the meter.
According to the operation specialists, this crypto mining farm was in operation since early 2017 and believed that it had consumed as much electricity as 30 households which is equivalent 220,000 euros. For over two years the mining farm operators had stolen an enormous amount of utility to mine the popular cryptocurrencies such as Bitcoin and Ethereum.
Other popular Bitcoin-like cryptocurrencies exist on distributed networks called blockchain and their price is determined solely by demand – they are not feasible and have no intrinsic value. The longer the chain, the greater the computational effort and ultimately electric power requirements. These computers or so-called miners contribute their computational power to solve the blocks that are added to the blockchain, and the network remunerates them with the rewards in the form of cryptocurrency.
This type of crypto mining is extremely profitable if operated in countries with low energy costs such as China. Andreas Ittner, Professor of Informatics and Distributed Information Systems at Mittweida University of Applied Sciences, said on Wednesday that power-related mining is occasionally reported from China: “There, employees of power plants are stealing their computers secretly.”
Mining cryptocurrencies in a country like Germany where the electricity prices are relatively higher will get the miners nothing unless they have the intention to start illicit mining operation as the one mentioned above.