Malaysian Police Crush Over 1000 Bitcoin Mining Machines

Malaysian police have disposed of more than one thousand Bitcoin miners in one swift move. Using a steamroller to crush the seized equipment, the resulting images can be hard to stomach for Bitcoin lovers around the world. The mining equipment is estimated to be worth around $1.25 million.

The Bitcoin mining equipment, known as Application-Specific Integrated Circuit (ASICs), were seized in several raids performed by Borneo Island authorities on illegal mining farms between February and April this year. The raids also resulted in eight arrests and the perpetrators may be faced with fines of up to 100,000 Malaysian ringgit ($23,700) and five years in prison.

While mining itself is not illegal in Malaysia, the operators of these mining farms were siphoning electricity to power their operations, having stolen the equivalent of $2 million worth of electricity throughout several months. Further aggravating the situation, CNBC reports that the electricity theft led to three houses burning down in the city.

Clandestine Cryptocurrency Mining

Asia is one of the main players when it comes to Bitcoin mining due to the low electricity prices in the country, which can be as low as $0.03 per kWh. While most large-scale operations will choose to pay for electricity, often opting to strike deals with power plants to further reduce costs, reports of illegal mining operations are quite common.

Cheap electricity is great, nothing beats free, especially when considering the cost of acquiring the latest mining equipment in order to stay ahead of the curve as mining difficulty rises. With free electricity, miners can take advantage of cheaper equipment without having to worry about profitability vs. electricity costs.

Malaysian police chose to dispose of the Bitcoin mining equipment in what can be described as a dramatic move, perhaps in a bid to dissuade those looking to create their own clandestine operations.

After a raid on an illegal mining farm, Chinese authorities have taken a more lucrative route and have auctioned 2100 miners online. Farm operators involved detained during this raid were sentenced to up to 13 years in jail.

Bizarre Apprehensions

While the latest news and images from Malaysia have turned heads, there has been no shortage of bizarre apprehensions to cryptocurrency mining operations that were siphoning electricity.

In the United Kingdom, authorities raided a suspected cannabis farm only to discover a large-scale Bitcoin mining operation. Authorities use different methods to stop cannabis growers in urban settings, in this case, police stated that the location exhibited all the “classical signs” of a cannabis growing operation.

The operation was siphoning thousands of pounds worth of electricity from the power grid, which led police to raid the location in an industrial unit on the outskirts of Birmingham, leading them to a completely different type of “farm”.

Perhaps the most bizarre case comes from the Ukraine where police discovered what they initially thought to be a cryptocurrency mining farm using roughly 3,800 PlayStations to generate Ether (ETH). The operation was also uncovered due to the stolen electricity.

While some speculated that the consoles were being used for their high-end Graphics Processing Units (GPUs), the myth was quickly dispelled as reports surfaced stating that the farm was instead extracting FIFA Ultimate Team cards which can be sold. While there is no confirmation of actual cryptocurrency mining, 500 GPUs were also discovered in the facility which may mean the operators were looking to expand into the crypto business.

Is Proof of Stake a Viable Solution?

Bitcoin has often been criticized as an unnecessary burden on the environment due to its high energy consumption. These critics have even led Tesla to backtrack its decision to accept Bitcoin as a payment method for its electric vehicles. However, one could also argue that the implementation of more renewable energy sources would neutralize this problem.

On the other hand, Proof of Stake (PoS) ecosystems may hold the key to energy-neutral cryptocurrency networks. Ethereum, for example, is taking steps to shift from the current model to a PoS system in which miners stake their Ether holdings to generate new coins and earn transaction fees, rather than spending electricity and computational power to do so.

Set to go live in December, the Ethereum difficulty bomb will be a pivotal step in Ethereum’s move to Eth 2.0. – a fully PoS cryptocurrency network.

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