The media and the murky world of Chinese Bitcoin mining

0
7

The Customs Ensign of the People's Republic of China. Photo: wikipedia commons

Over the last few days the crypto world has been abuzz with the news that the 600 computer rigs, stolen in what became known as Iceland’s ‘Great Bitcoin Heist,’ might have turned up in China.

Last week Xinhua reported that police in Tianjin confiscated the same amount of Bitcoin mining computers after a local power company reported abnormal electricity consumption.

The Tianjin electricity supplier, after monitoring a spike in usage, found a power grid junction box had been short-circuited which, allegedly, was a trick to divert the large supply needed to power hundreds of mining machines. Five people were under investigation for power theft, said Xinhua, while another had been detained.

Then earlier this week Icelandic media reported that Reykjavik police and Interpol had sent an inquiry to Chinese authorities regarding the 600 confiscated Tianjin computers.

The computers from the Icelandic heist were worth approximately $2 million, which makes it the biggest theft ever in Iceland and more spice was added to the story when robbery suspect Sindri Þór Stefánsson escaped from prison and fled abroad – supposedly on the same plane as Iceland’s Prime Minister Katrín Jakobsdóttir – and after saying he could stay on the run forever was promptly captured is now in a jail in Amsterdam awaiting extradition back to Reykjavik

The Iceland-to-China link makes it a great story. And it was duly covered by the hundreds of different crypto news sites dotted across the globe. But it is really that plausible?

The reason the computers were needed in Iceland in the first place was precisely because of the crackdown in China on Bitcoin mining. Iceland, with its cheap thermal and hydro-power supply and without the harsh regulations against cryptos that China has in the last few years, attracted mining operations from all over the world, including China.

Not forgetting of course that the 600 machines stolen in Iceland were taken not in one singular theft but in four separate burglaries over a three month period at the end of 2017 and the start of 2018. And then there is the shipping. Six hundred computer systems seems like a lot of 40-foot containers to slip past the ever-stony faced officials from China Customs.

With all of this taken into consideration, would it really be worth it to move these machines to China?

But no matter. The plethora of crypto-currency news sites are often sponsored by various exchanges or digital tokens, which means it is their prime interest to quickly report on the upward moves in the market, however small they be, in an all-together positive light. And these sites, to justify their existence, need crypto news that isn’t only market-related. So the Iceland-China story duly made it as unquestioning news across the world.

But another seemingly important China-related Bitcoin mining story from the last few weeks was far less reported by the crypto media. This was the story that alleged that the Bitcoin price rise seen in April was due to Chinese mining outfit Antpool artificially boosting the market.

Antpool, run by Bitmain Technologies from Beijing, is a mining whale. Some estimates say something like 15% of all Bitcoins ever mined have had connections with Antpool, while that number jumps closer to 40% in 2018. If true, Bitmain is the biggest Bitcoin mining business on the planet. According to CNBC, because of the Chinese crackdown, Bitmain now has mining operations in Israel, Canada and Switzerland and has moved its regional headquarters in Singapore.

Data from Bernstein Research says Bitmain made something close to $4 billion in operating profits in 2017 and holds a “massive cash position.” Impressive indeed.

But the allegation that its might be manipulating the Bitcoin price isn’t really seen as news by a lot of the crypto media.

Funny that.

Please contact us with feedback, news or stories: thechain@atimes.com

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here