More profitable than cannabis

[Gob]

Police have discovered a cryptocurrency operation that used stolen electricity to mine bitcoin in the West Midlands.



Officers from West Midlands police raided a building in an industrial estate on 18 May expecting to find a cannabis farm, but instead stumbled upon the cryptocurrency scheme. No arrests have been made.

Users gain bitcoin and some other cryptocurrencies through “mining”, a process in which computers solve complex mathematical puzzles. Those puzzles have by design become more difficult as more bitcoin has been awarded to users, meaning more powerful computers and significantly more energy are needed to make mining worthwhile.

However, it can be lucrative. A single bitcoin was worth $36,392 (£25,732) on Friday afternoon. That was below its all-time high above $64,800 but about five times its value at the start of 2020.

West Midlands police said they had been tipped off to the possible existence of a cannabis farm because of reports of people visiting the industrial unit at all times of day. A police drone flown overhead “picked up a considerable heat source”, usually associated with heaters used to help cannabis plants grow, the force said.

Pictures of the mine released by police showed rows of computers wired together with fans attached to large ventilation ducts. There were about 100 computer units in total.

Mining bitcoin and other cryptocurrencies is not illegal in the UK. However, the police said the mining operation was found to be stealing thousands of pounds worth of electricity from the mains supply after inquiries to Western Power, the network operator.

Jennifer Griffin, a Sandwell police sergeant, said the find was “certainly not what we were expecting”.

“It had all the hallmarks of a cannabis cultivation setup and I believe it’s only the second such crypto mine we’ve encountered in the West Midlands,” she said.

“We’ve seized the equipment and will be looking into permanently seizing it under the Proceeds of Crime Act. No one was at the unit at the time of the warrant and no arrests have been made – but we’ll be making enquiries with the unit’s owner.”

Bitcoin and other cryptocurrencies have many legitimate uses and are rapidly moving towards more mainstream adoption, in part because of an investment mania fuelled by prices that have soared in recent years. However, it is difficult to trace bitcoin owners if the identity of digital wallet holders is not known, making it attractive to organised crime.

Its rising popularity has also meant increasing energy usage, causing authorities in some countries – although not the UK – to clamp down on mining.

The price of bitcoin plunged last week after China announced a series of restrictions on its use, and Reuters on Thursday reported that energy regulators in China’s Sichuan province planned to ask local power companies for information on cryptocurrency mining. Regulators in China’s Inner Mongolia, another centre of mining because of relatively cheap energy costs, has also promised action to reduce mining. In Iran some electricity blackouts were blamed on the energy demand from cryptocurrency mining.

The soaring energy usage is regularly criticised. Most credible estimates suggest the bitcoin network uses as much energy as countries the size of Norway or Argentina. That energy usage is associated with significant carbon dioxide emissions released by power stations burning fossil fuels.

[Long Run]

A maxim of Warren Buffett is to invest in what you know. I would guess that no more than one in ten thousand have any idea what "a" bitcoin or crypto-currency is.

[Econoline]

When you're stealing thousands of pounds worth of electricity from the mains supply, anything can become more profitable than cannabis. (I wonder just how "profitable" an operation like this would be if you were paying for the electricity you used?)

[Gob]

Three English 'nerds' were behind a cryptocurrency 'mine' found inside an abandoned warehouse which was being powered by £16,000 worth of stolen electricity a month, it was revealed today.

But the illegal Bitcoin mine only generated around £8,000 a month at peak prices, and used huge amounts of electricity siphoned from the national grid by drilling through the floor of the building near Birmingham.

While there are dozens of Bitcoin mines around the UK that purchase electricity legally, often at reduced prices in an attempt to turn a profit, the mine is the second and biggest one to be found illegally hooked up to the National Grid in the West Midlands.

They stole £16,000 of electricity a month, to make £8,000. Do you want to tell them, or shall I?

[Scooter]

Given that they stole it, it didn't really matter how much it would have cost, except that they got caught.

[Gob]

But they'd have been better off flogging the electricity.

[Scooter]

How would they have done that? Are they going to create their own transmission network to distribute it to people looking to buy black market electricity?

[Gob]

OFFS, it was a joke, try not to take everything so literally!

[Long Run]

It is a typical crime: criminal gets $X, and the damage they cost getting it is $10X. The latest is the theft of catalytic converters.

[ex-khobar Andy]

We had air conditioning cores stolen from my workplace a few years ago. It cost us $11,000 to replace two AC units (with a deductible of $10,000 we decided not to bother the insurance company) and the police told me that the thieves would probably net about $250 for the scrap copper.

[Gob]

Catalytic converters are the big thing in stealing at the mo here...