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Illegal Bitcoin Farms in Iran Cause Energy Spike

July 1, 2019

7:36 pm

Iran’s government-subsidized electricity saw a 7% spike in consumption in June, destabilizing the country’s power grid. The culprit, according to Iranian authorities? One thousand illegal bitcoin mining machines.

Bitcoin mining across the globe currently uses more energy than the Czech Republic. Here’s how that impacts Iran and everywhere else — possibly even your own PC.

What Happened?

Bitcoin mining is basically the modern-day version of panning for gold: With the right equipment, miners can create new “blocks” of bitcoins. It’s potentially lucrative, given each block currently contains 12.5 bitcoins, and each bitcoin’s current value is about $10,495. But the blocks are only generated sporadically, and the process of mining them requires the constant use of large amounts of electricity.

Iran’s 1,000 recently seized bitcoin mining machines were found in two abandoned factories.

“Two of these bitcoin farms have been identified, with a consumption of one megawatt,” Arash Navab, a power official in the province of Yazd, said in a statement reported by Reuters.

According to an Energy Ministry spokesman, the machines were “mostly to blame” for the 7% year-over-year increase in power consumption across the country that month, Reuters adds.

The Appeal of Bitcoin in Iran

The low cost of energy in Iran might be what’s driving interest in bitcoin mining, according to Bitcoin.com, which cites rumors that “prices are astronomically lower than even China during the wet season.” With prices that dip as low as $0.0006 per kilowatt-hour, Iran attracts miners like moths to a porch light. The country has seen an influx of miners from other countries including China, Spain, Ukraine, Armenia, and France.

In 2018, Iran officially banned its banks from dealing in any cryptocurrencies. While mining cryptocurrency isn’t itself officially banned, it is currently considered illegal while Iranian officials await bitcoin-mining-specific government subsidy electric prices. Until then, any power-thirsty mining operations will continue to be located and closed.

Cryptocurrency Farming Attempts

Cryptocurrencies from Bitcoin to Monero have a frankly ludicrous history of illegal mining operations. Here are a few highlights:

Steam Game Turns PCs into Cryptocurrency Miners

In July 2018, the game Abstractism was removed from the digital game platform Steam, after players began to suspect it was taking over their computers and using them to mine cryptocurrencies. The practice is called “cryptojacking,” and allows the creator of the malware to earn free bitcoin while spreading the electricity bill for its generation out across their myriad of victims.

Cryptojacking can be tough to identify, and the game’s developer claimed the slowed computer performance caused by Abstractism could be chalked up to players’ graphics settings. Steam didn’t buy it, telling Kotaku in a statement that it removed the game due to “shipping unauthorized code, trolling, and scamming customers with deceptive in-game items.”

Hackers Hijack Government Websites

Ironically, the UK’s Information Commissioner’s Office (ICO) website was infiltrated by a malware plugin that started to generate cryptocurrency via the PC of anyone who visited the website or thousands of other infected websites (at least nothing was held for ransom this time).

The plugin was caught by security researcher Scott Helme, the BBC reported in February 2018, when a friend noticed a malware warning triggered by the ICO website itself. Always pay attention to your web warnings, folks.

Tesla’s Cloud Was Cryptojacked

Nothing’s safe: Even Tesla’s Amazon Web Services cloud infrastructure was found to be running mining malware in a cryptojacking heist that Wired called “far-reaching and well-hidden.” Researchers at security firm RedLock uncovered the scam, and Tesla was able to fix the issue within a day after being notified. The core problem turned out to be a console that wasn’t password-protected.

415,000 Routers Hijacked Around the Globe

As of December 2018, the ongoing plague of cryptojacked routers has grown to over 415,000 cases worldwide, with malware in question including mining software CoinHive, Omine, and CoinImp. And it might be worse than we think.

“It wouldn’t surprise me if the actual number of actual infected routers in total would be somewhere around 350,000 to 400,000,” security researcher VriesHD said in a quote reported by the Next Web.

Don’t expect the problem to go away: Bitcoin miners are using a rapidly increasing amount of energy to earn their livings.

Bitcoin mining used five times more power in 2018 than it did a year prior. As those costs sky-rocket, illegal routes like cryptojacking or moving to Iran will look increasingly attractive.

Read more of the latest crypto news on Tech.co

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Adam is a writer at Tech.co and has worked as a tech writer, blogger and copy editor for the last decade. He's also a Forbes Contributor on the publishing industry (and Digital Book World 2018 award finalist) and has appeared in publications including Popular Mechanics and IDG Connect. When not glued to TechMeme, he loves obsessing over 1970s sci-fi art.