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Illegal Bitcoin mining farm cracked down by Chinese police

According to a report by Xin’an Evening , a Bitcoin mining farm was cracked down by local police force in Bengbu, Anhui Province. The local electric power company lost around 1,000 RMB a day for the past 6 months.

bitcoin-farm

50 Bitcoin ASIC miners detained by local police in Anhui Province Photo credit:Xin’an Evening

Starting from 19th May, Power Company discovered that the line loss rate of a local community surged to 97% while normal number should be 5%. An inspection team was dispatched to check the household power meters one by one but nothing unusual detected. At the end of last month, inspectors found an extra white cable attached to the starter box in a building, which leads to a room on ground floor. Then they discovered that the front door of the apartment was blocked by brick and mortar and window by dark curtain but the sound of machine in operation cannot be fully suppressed. They broke into the house next day along with policeman and found 50 sets of Bitcoin ASIC miners busy digging.
Actually it’s nothing new to the Chinese community since stealing power might be the only way for an individual miner to make his business profitable. Similar news popped up from time to time. Just to name a few:
2015-12-29 Bitcoin miners theft case, 1.6 million involved
2016-03-27 Illegal Bitcoin mining farm with 200 Bitcoin miners cracked down
2016-06-02 3 Bitcoin mining site busted, 74 miners detained
As per blockmeta  , the Bitcoin network difficulty will be 312,267,622,672, a 8.9% gain over the last 14 days . We are seeing new players in the arena like the new 14nm chips manufacturers or government-funded projects like and Weiyuanyungu’s Data center with hosting capability up to 150,000 units in Inner Mongolia, , aside from the well-known Xinjiang data center of Bitmain.

neimenggu-mining-project

Cornerstone laying ceremony of Blockchain cloud computing data center in Inner Mongolia. Photo credit: northnews

The race for hashing rate is so fierce that even professional miners are under pressure. Jiang Zhuo’er, owner of lbtc1btc mining pool, claimed that he had sold all of his LTC miners in October.

“to make room for next generation chips”

Back to the illegal mining farm case, as per the calculation of power company, at 1000kw/h per unit, the 50 miners is burning 51 KW an hour, 1224 KW a day, which means the power company lost 960 RMB daily. If the mining farm had been online since 19th May, then the thief managed to make gross profit of 182,000 RMB, or 230,000 KW from the free power.

The mysterious disappearance of Friedcat, founder of ASICMINER, was said to be associated with a similar case.

Usually at the end of such news released by the authority, police would say:

We are still chasing the people behind this.

In fact, we never heard of anyone get caught for stealing power, which is considered state-owned property.

COMMENTS(22)

  • BitcoinAllBot
    3 months ago BitcoinAllBot

    Here is the link to the original comment thread. Or you can comment here to start a discussion. Author: 8btccom

  • robbonz
    3 months ago robbonz

    How do you make it legal? Bribe the govt?

    • BTC_Forever
      3 months ago BTC_Forever

      No, maybe just the local police and the mayor/local authority will be enough 🙂

  • BTC_Forever
    3 months ago BTC_Forever

    Those miners didn’t listen to this interview and do it in the right way: https://www.youtube.com/watch?v=MAd2f4n6wx8&feature=youtu.be

  • cryptorific
    3 months ago cryptorific

    What would happen to bitcoin if it became a real threat to the yuan and the government just forcibly shut down all their mines? Would bitcoin die because you can’t really have a network with 70% of miners suddenly disappear?

    • CryptAxe
      3 months ago CryptAxe

      Before the next difficulty adjustment things might move very slowly. After that, there might be fierce competition to start spinning up miners in other locations around the world to collect some of the now much easier to mine BTC.

      So hopefully if mining in China was shut down completely, enough people would try to get in on the new lower difficulty mining action and the network would balance out over time.

  • lifeboatz
    3 months ago lifeboatz

    I first heard about bitcoin from a guy who oversaw the local university’s student PC work area (at a university in the US), back in 2010 (if I recall correctly).

    He said “What is Bitcoin? These Chinese exchange students keep coming in here and running this software day and night, and leaving it running in the background on each PC. I think it’s some kind of game or looking for E.T. or something.”

    I was like, “um, no, if they are that dedicated, it has to be for money.”

    • BitCapsule
      3 months ago BitCapsule

      and zthen….?

      • lifeboatz
        3 months ago lifeboatz

        And then I used Google, read up on Bitcoin, and started my buy-and-hold spree the very next day. It wasn’t easy back then. I think my first bitcoins arrived in about ten days. I eventually got hooked up with Mt. Gox for my buying, and never lost any there.

        I really got a break, thanks to Chinese students trying to get free electricity for mining. I can’t imagine they netted very many bitcoins.

  • 1BitcoinOrBust
    3 months ago 1BitcoinOrBust

    Does anyone have more information about this new “player” in the mining game:

    We are seeing new players in the arena like the new 14nm chips manufacturers or government-funded projects like and Weiyuanyungu’s Data center with hosting capability up to 150,000 units in Inner Mongolia,

  • cryptorific
    3 months ago cryptorific

    Right it’ll re-adjust but i can forsee a situation where it doesn’t get to the next readjustment. Lets say the taken down occurs right after an adjustment so theres 2000 blocks to go before the next. Now 75% of the miners are offline and blocks are being found on average 40 minutes apart and. Well 80000 minutes is a long time, around 55 days. Markets would be in chaos, price would probably tank and most of all, 55 days of transactions taking so long would certainly hurt bitcoin even more.

    • Richy_T
      3 months ago Richy_T

      However, with a bigger block size limit, confirmations would take longer but transactions would still be able to proceed at the same rate without getting horribly backed up.

      • cryptorific
        3 months ago cryptorific

        Exactly, excess transaction capacity would ensure bitcoin’s survival even if something catastrophic happened.

    • CryptAxe
      3 months ago CryptAxe

      Hopefully this never happens

  • MeTheImaginaryWizard
    3 months ago MeTheImaginaryWizard

    It can be defended against with a pow change and adjusting the time to retarded.

  • nikize
    3 months ago nikize

    So have the police started mining now instead when they got a lot of miners for free? 😀

  • danielravennest
    3 months ago danielravennest

    They wouldn’t shut down all the mines. They would keep some so Party/Government people could still launder their bribes and send it overseas.

  • Rawlsdeep
    3 months ago Rawlsdeep

    I don’t think that would be possible. If a PoW change was implemented the non-Chinese miners would also be screwed over creating an even bigger mess.

    • MeTheImaginaryWizard
      3 months ago MeTheImaginaryWizard

      Necessary collateral damage.

  • Political_douche
    3 months ago Political_douche

    Name one time that law enforcement did something unethical regarding bitcoin. /s

  • 8btccom
    3 months ago 8btccom

    http://www.lsrc114.com/Company/Info/Com_View.asp?Param=VRus7teh61ib2378

    Location: Home> About Us> Company Profile
    company information:
    Founding date: August 11, 2015
    State – owned enterprises
    Industry: Internet, e – commerce
    Registered capital: 100 million yuan / yuan
    Number of employees: 10 to 50 people
    Region: Yaan, Sichuan

    Company Profile:
    Sichuan bit cloud Valley Technology Co., Ltd. was established in August 2014 with a registered capital of 10 million, the company is located in Shimian County Bamboo Industrial Park, is a computer hardware and software development, cloud computing hosting, computer systems integration services, network engineering implementation and maintenance , Computer equipment installation and maintenance, software sales and technical services, Internet information services integrated service companies.

  • 8btccom
    3 months ago 8btccom

    Do it properly like bitmain or haobtc. They are totoally legitimate miners.

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