Bitcoin price DROPS despite launch of key crypto business.

Bitcoin was born ten years ago while the world teetered toward financial collapse as a result of the 2007 and 2008 financial crisis. A mysterious character called Satoshi Nakamoto in 2008 created a peer-to-peer system of electronic cash called bitcoin with a purported threefold aim. These were to wrest control away from those who created the financial crash; to create the first-ever money with a built-in monetary policy; and that it would be completely transparent.

A decade later, cryptocurrencies like bitcoin have experienced all manner of unforeseen turmoil, from booms and busts to bubbles.

The calculation is designed to be energy-intensive or complicated so that it secure

Dr Max Krause

One of the most shocking aspects to the nascent industry has however only recently been reported – the enormous amounts of energy cryptocurrencies like bitcoin require to be mined.

Researchers at the Oak Ridge Institute have calculated one dollar’s worth of bitcoin requires about 17 megajoules (MJ) to mine, as compared with 4, 5 and 7 MJ for copper, gold and platinum.

Dr Max Krause, a co-author of the report – the first to quantify the energy cost per dollar benefit – said: “I added the comparison with mining because I want to give people unfamiliar with crypto mining process a metaphorical comparison or conceptual frame of reference.”

The bitcoin expert stressed BTC mining is on an ”unsustainable path” when considering the amount of energy used.

Bitcoin mining is a process of performing computer calculations that effectively validate transactions between different people across the world.

For the work these third parties are doing for validating these transactions, they are rewarded with newly created bitcoins.

Companies are also financially rewarded for taking the time and energy for processing these transactions.

Dr Krause explained exactly why such incredible amounts of energy are needed to mine cryptocurrencies like bitcoin, by contrasting them with more traditional forms of cash.

He said: “The calculation is designed to be energy-intensive or complicated so that it secure.

“It is supposed to be something considered to be ‘trust-less’ – meaning we trust the banking system to be there tomorrow.

“This is designed to be un-hackable – you don’t know the people who are processing these transactions, so it is called a trust-less system because the system is so secure.

“These secure calculations have to be fairly complex and therefore it requires a lot of computing power to repeatedly perform these calculations.

“The reason it consumes so much energy is really because there is a profit incentive to process these transactions, so companies are rewarded with coins for doing this work and the coins are quite valuable.

“And when you have both quite complex calculations and then a large profit, or incentive, an arms race of different mining groups creates these large energy requirements.”

Bitcoin may be virtual but the profit is very real and Dr Krause said the numbers “can be substantial”.

For every completed block, miners are rewarded with 12.5 BTC tokens, which equates to about £XX ($100,000).

This happens roughly as often as every 10 minutes.

Dr Krause said: “So the money that changes hands at a macro level is quite large.

“The potential is huge – companies could be making millions of dollars a year.”

But the environmental impact of all of this energy consumption is beginning to be felt.

The carbon dioxide (CO2) emissions alone produce a significant amount of greenhouse gas for a fairly nascent industry.

According to Dr Krause, cryptocurrency mining now contributes to about 15 million tonnes of CO2.

And it appears unlikely that improved efficiencies in mining technology will make a difference any time soon.

The BTC expert said: “When we calculated our estimates, we assumed more efficient miners in 2017 to 2018 than 2016.

“But mining activity is far outpacing the improved efficiency of the mining equipment.

“Yes, the mining equipment is becoming more efficient, but the phase-out of technology is a little slower.

“The amount of interest in mining is increasing so much faster than they can create new, more efficient products.

The postdoctoral researcher at the US Environmental Protection Agency refused to condemn cryptocurrency mining but he does believe the amount of energy we consume is something we should all be mindful of.

He said: “We need to realise that digital products or processes are no different from physical one and can also consume a significant amount of energy.

“As we move to this new digital age where everything is connected and online we should keep in mind that we are not using less energy, but much more energy.”

*This post is credited to Express UK

Two enterprising principals of a school in China were found to have been using school resources to mine Ethereum (ETH), according to reports emerging in local media.

The principals were taken to task over the theft of electricity and processing power, which resulted in significant disruption to systems within the school over a period of several months from July to November.

According to reports from the HK01 network, the alarm was first raised at Puman Middle School in Hunan province when it was noted that school computers were making more noise than usual—even during school holidays and close days.

It was also noted that IT networks in the school had been running much slower than their usual pace, while the school’s energy consumption had almost doubled in just a few months.

The general manager at the school initially thought the problems were being caused by overuse of air conditions systems. However, it was subsequently discovered that senior management had installed no fewer than seven computers, set up specifically to mine ETH on school resources.

An investigation found that school principal, Lei Hua, and vice principal, Wang Zhipeng had installed the computer system worth $7,000 to mine the cryptocurrency, costing the school somewhere in the region of $2,165 in electricity over the period.

According to media reports, the principal had initially installed the system at home before becoming frustrated by the extent of the energy bills he was incurring as a result. The principal has since been removed from his post, with the vice principal reprimanded and given an official warning for their part in the swindle.

This is far from the first time an employee has attempted to use the resources of their employer for mining cryptocurrency. Back in March, employees of the Florida’s Department of Citrus were found to have used work resources for mining cryptocurrency, while employees at the Louisiana Attorney General’s office were also implicated in a similar scam.

While it might not seem as significant as other forms of workplace theft, mining cryptocurrencies in this way can incur significant energy and computing costs, which are ultimately illegitimately billed to their employer. These are just some of the high profile few that have been caught so far; however, it seems likely that this is a problem that will continue at workplaces worldwide, as crypto mining becomes more lucrative and accessible.

*This post is credited to Coin Geek

Chinese energy company Risen Energy has partnered with a Spanish cryptocurrency mining farm will to develop capacity of up to 300 megawatts (MW) of photovoltaic power. The news was reported by a Chinese media outlet PV Tech Thursday, October 4.

Several months after CryptoSolarTech confirmed it was building two farms near the city of Malaga using energy-efficient technology, Risen “will develop and take on engineering, procurement and construction (EPC) responsibilities for the projects,” according to the new report.

For comparison, Bitcoin network consumes an average of about 200 MW of energy for mining every day, according to the Bitcoin Energy Consumption Index.

In June, CryptoSolarTech released its own token via an ICO to assist in financing its operations, the token raising a reported $68.2 million.

“Funding for the project is secured against the launch and sale of the cryptocurrency tokens from the farms and based on a 15-year power purchase agreement (PPA),” PV Tech added.

A month previously, CryptoSolarTech reported it had raised 60 million euros ($69 million) from its first two months of existence, along with concluding a power supply contract with Barcelona-based Respira Energia.

Since the culmination of the ICO, the company’s token has lost the vast majority of its value, making it into the top ten ICO ‘losers’ in research released late September.

*This post is credited to CoinTelegraph

If your computer and/or smart fridge has been running slow in the last few months, you might be in the cryptocurrency mining business and not even realize it. A new paper by the cybersecurity industry group Cyber Threat Alliance finds that rates of cryptojacking — the term for secretly installed malware stealing your computing power to mine cryptocurrency for someone else — have risen by 459 percent since 2017.

While an individual person might need multiple powerful computers dedicated to mining in order to recoup a single Bitcoin, organizations involved in cryptojacking can get around this assumed pre-requisite by distributing the power of a single miner between several devices. Instead of Bitcoin, cryptojackers often dedicate their stolen power on cryptocurrencies such as Monero, whose code is meant to resist powerful industrial-strength mining rigs and, whose relative anonymity is great if you’ve just mined some of it using malware and would like to convert it to cash. Additionally, as more people install Internet-of-Things-enabled devices in their house, that gives illicit crypto miners more opportunities to jack your shit.

Besides the fact that if your smart TV is going to be mining Monero while you binge-watch The Sopranos or whatever the money might as well be going to you, such malware often puts your device in perpetual overdrive, which both slows down your machine and potentially shorten its lifespan. The CTA notes, however, that sophisticated mining software will disable itself when it detects user activity, or only run when you think your computer is in sleep mode.

Right about now, you might find yourself asking, “What asshole would make such sophisticated software?” Well, in case you didn’t read the headline of this blog post, the answer is “The National Security Agency.” Many mining networks gain access to their victims’ devices using EternalBlue, an NSA-built software that was leaked by hackers in 2017. While the Eternal suite of products focused on Windows devices, the future of cryptojacking, per CTA, is probably in the Internet of Things, especially if the price of cryptocurrencies ever rise again. Though your smart TV doesn’t have the same processing power as even a laptop, higher crypto prices mean higher incentives for malicious actors to figure out how to exploit whatever internet-connected devices they can.

So, uh, yeah, have fun with your unnecessary smart home — you might end up helping some scammer get Monero rich.

*This post is credited to the Outline.

The former CEO of a cryptocurrency company has been sentenced to prison time and ordered to pay $9 million in restitution due to his company’s role in a major Ponzi scheme that cost hundreds of investors millions of dollars. The hearing comes as the U.S. government and regulatory agencies step up their crackdown on cryptocurrency-related fraud.

A District Court Judge in Connecticut sentenced 33-year-old Josh Garza to a 21-month prison sentence followed by six months of house arrest for his role in a Ponzi scheme based around the issuance of a cryptocurrency – called PayCoin – which entitled investors to a portion of another company’s mining profits.

The scheme was conducted between May of 2014 and January of 2015 through four companies owned by Garza. These companies sold the rights and access to cryptocurrency mining operations and allowed investors to buy a portion of these operations through “PayCoin “and “Hashlets,” which claimed to give investors the rights to a portion of the profits from the mining operations.

John Durham, the U.S. District Attorney for Connecticut, spoke about the scheme, saying that “hashlet customers, or investors, were buying the rights to profit from a slice of the computing power owned by the companies.”

Although the operation seems legitimate on the surface, Garza made multiple claims that should have raised red flags for investors, including the guarantee that the price of the virtual currency wouldn’t drop below $20 per unit, because the company would prop the price using their $100 million digital currency reserve.

After pleading guilty for defrauding investors and committing wire fraud, Garza was ordered to pay full restitution to all the investors that had lost their entire investments after the operations were found to be illegitimate. The judge required that Garza pay all the investors a total of $9,182,000 in restitution and was sentenced to 21 months in prison.

Garza’s Sentencing Comes as the US Government Increases Its Crackdown on Cryptocurrency Scams

This past week, a New York federal judge ruled that Initial Coin Offerings (ICOs) fall under the umbrella of securities offerings, opening up the gates for the Securities and Exchange Commission (SEC) to move to shut down fraudulent, or potentially fraudulent, ICO operations.

The ruling came about in a case regarding a man who has defrauded ICO investors by claiming, and providing falsified evidence, that the virtual currency was physically backed by diamonds and real estate.

Judge Raymond Dearie, the judge handling the case, commented on his ruling, saying that:

“Congress’ purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called… Stripped of the 21st-century jargon, including the defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds.”

Following this ruling, the SEC immediately moved to shut down and charge two cryptocurrency scams that were defrauding investors. The first company charged was TokenLot, a self-described ICO superstore, that was charged with operating as an unregistered broker-dealer. The TokenLot team cooperated fully with the SEC, which led to light charges.

The second company that was shut down by the SEC was a cryptocurrency hedge fund, called Crypto Asset Management LP, that had falsely claimed to investors that it was the first fully regulatory compliant crypto hedge fund. The operator of this fund, Timothy Enneking, had taken over $3 million from investors, and more than 40% of his fund’s investments were considered as securities by the SEC.

It is likely that the SEC and other regulatory authorities in the U.S. will continue to crackdown on cryptocurrency-related scams in the near future.

*This post is credited to News BTC

Today’s topics include Trend Micro reporting that cryptojacking attacks are growing rapidly, and Pivot3 unveiling hyperconverged infrastructure for the rugged edge.

Trend Micro released its 2018 midyear security roundup on Aug. 28, revealing slowing growth of ransomware attacks, while cryptojacking attacks are surging.

According to the 40-page report, there was a 956 percent increase in cryptojacking attacks in the first half of 2018 compared to the first half of 2017. Cryptojacking refers to unauthorized cryptocurrency mining, which can end up consuming a victim’s system resources.

According to John Clay, director of global threat communications for Trend Micro, “It does appear that this trend will continue for the foreseeable future, but with crypto-currency values changing quite wildly, we could see a decrease in this threat.

We do think we’ll see an increase in targeting of owners of crypto-currencies or the exchanges themselves, as the opportunity to steal more coins is higher there than the prospect of mining coins.”

Pivot3, a smaller vendor in the crowded hyperconverged infrastructure market, unveiled on Aug. 28 its Intelligent Edge Command and Control solution, which enables organizations that operate in extreme environments to collect, store, process and analyze data immediately in the field, rather than having to send the data back to a central data center or a public cloud.

While the ruggedized hyperconverged infrastructure solution can be used for a broad range of situations, from oil and gas exploration to mining operations, it is designed with the military in mind.

According to Bruce Milne, chief marketing officer at Pivot3, its purpose is “to take mission packages and drop them in as a node … that includes the entire mission package for not just a particular vehicle, but an entire … convoy.

The idea is that four Marines can batten that thing up and run it to whatever environment they need to and they have an instant data center.”

*This post is credited to eweek.com

Chinese startup firm Canaan Creative is unveiling a new TV capable of mining Bitcoin while watching shows.

The Beijing, China-based company Canaan Creative announced a plan to unveil a new television set that allows you to mine cryptocurrency while watching TV. Canaan Creative is the second largest manufacturer of Bitcoin mining rigs in the world,

According to the South China Morning Post, the new TV set would be called AvalonMiner Inside and will be equipped with a processing capability of 2.8 trillion hashes per second. In comparison, the world’s most powerful mining machine has 11 trillion hashes per second capacity.

The report said the firm launched the product after completing its application for an initial public offering in Hong Kong in May. Canaan is targeting to raise at least $1.2 billion from the IPO.

It added the Avalon TV would be powered by artificial intelligence (AI) with voice control capabilities. The new device also features a real-time calculation of Bitcoin mining profitability. Users of the TV set could use their earned cryptocurrency to purchase entertainment content as well as physical gifts using Canaan’s platform, the report added.

With the launch of the AvalonMiner Inside TV, more home appliances are expected to be developed with digital currency capability and expand the new era of AI and blockchain technology, the report quoted the company as saying.

Canaan plans to distribute its mining TV through retailers, which will sell them to their customers. There is also a plan to introduce more home-appliances that are blockchain-enabled, the company reportedly said.

The company was founded in 2013 and focuses mainly on mass produced chips used for Bitcoin mining. Its biggest rival in providing hardware for Bitcoin mining rigs is fellow Beijing-based Bitmain Technologies.

This is not the first time blockchain and cryptocurrencies have generated interest in the world of TV entertainment.

In May, an episode of Silicon Valley featured the coolness of cryptocurrencies. The show went so far as describing the new asset class of providing “extreme personal freedom,” the main feature of digital currencies its believers have long reiterated.

An episode of Billions reminded its loyal viewers that digital currency trading is indeed about the transfer and a store of value.

*This post is credited to Cryptovest.

Canaan Creative has launched what it hopes will be the future of the blockchain and the first of a series of releases that will improve its position as it battles for increased market share in the bitcoin mining device market.

Dubbed the AvalonMiner Inside, the smart TV also doubles as a bitcoin mining device, and while some dismiss it as a marketing stunt, Canaan believes that this could be the future of bitcoin mining.

The ASIC Killer?

Canaan Creative is the world’s second-largest maker of bitcoin mining equipment behind Bitmain. While Bitmain controls an estimated 70 percent of the mining rig market in addition to its substantial bitcoin mining operations, Canaan controls about 17 percent.

Canaan’s ‘AvalonMiner Inside’, has the capacity to process 2.8 trillion hashes per second which might sound like a lot, until the capacity of existing ASIC rigs is taken into consideration. The most powerful mining rig in Canaan’s current inventory can process 11 trillion hashes per second, which means that the AvalonMiner Inside only has about a quarter of the power available to a regular mining rig.

Even including the added features like voice control, real-time bitcoin mining profitability display and a link to Canaan’s entertainment platform where users can pay for content and gifts using mined bitcoin, this still does not seem on the surface to be a device that is practical.

The catch however, is that Canaan has not built a device that is intended to directly compete with Bitmain’s Antminer or other comparable ASIC miners. What Canaan is trying to do is to build a new generation of blockchain-enabled IoT devices that blend into the background.

These devices will expand the blockchain and increase its hashrate while simultaneously reducing the centralization risk inherent to the dominant model of large bitcoin mining farms. Instead of taking on Bitmain in a potentially painful price war on a turf that has only one clear leader, Canaan hopes to democratize bitcoin mining by making people buy mining devices for reasons other than bitcoin mining.

A network of five million networked devices operating at 25 percent of an ASIC miner’s capacity will, in theory, produce better results than a network of 500,000 ASIC miners working at full capacity.

Cryptocurrencies have been in and out of the news for a while now. Because “mining” is the only source of new cryptocurrency units, complex ASIC devices such as the BM1387 have been created to aid in the mining process. Here’s a look at one of the ASICs that aims to make mining faster and more effective, the BM1387.

Mining a cryptocurrency like Bitcoin is, at its core, a guessing game. It is a process of solving hash problems, which is complex and must be done at scale. Therefore, it’s imperative for Bitcoin miners to be able to simultaneously try different guesses when solving hash problems so that the time to solve can be reduced.

While multi-core CPUs can be good at this, they are limited to the number of cores that they contain (for example, a four core CPU can check a maximum of four hashes simultaneously). However, solving hash problems is very specific and can easily be done using a GPU. Since GPUs contain many individual processing cores, the hash rate from a GPU is often several orders of magnitude greater than that from CPUs.

But as the number of available Bitcoins to be mined reduces, the hash problem becomes harder to solve and even GPUs became too slow. This is where some manufacturers have found a gap in the market and now produce devices specifically for mining cryptocurrencies.

Enter the ASIC

ASICs (application specific integrated circuits) devices are silicon ICs tailored by engineers to perform a specific function, unlike generic ICs meant to be useful in multiple applications. Designers of mining equipment would normally have to rely on devices such as FPGAs to create hardware that can mine efficiently, but ASICs offer a cheaper path. While cost and development of ASIC devices are considerably higher than that of FPGAs (by tens of millions of dollars), the individual ICs can be relatively inexpensive.

One company in particular, Bitmain, produce Bitcoin mining equipment containing ASIC miner ICs. Their latest product, the Antminer S9, is one of the world’s smallest Bitcoin miner machines, as well as being the world’s lowest-powered device of its kind. The S9 control board uses a Xilinx Zynq 7000 series FPGA, which also integrates a Dual ARM Cortex-A9 microprocessor. But the impressive hardware in the S9 is not the controller board or the use of an FPGA, but the 189 BM1387 ASIC miner ICs!

 

The BM1387 is an ASIC designed to solve hash rates as fast as possible while keeping the energy consumption to a minimum. Power consumption is a pain point for cryptocurrency miners because the process of supporting the necessary servers is extremely power hungry.

The designers of the BM1387 claim that the device consumes only 0.098J per giga hash and with an estimated has rate of 13TH/s for a power consumption of 1300W then the hash rate for each ASIC is approximately 68GH/s which would translate to an approximate energy consumption of 6.12W. But what does the datasheet say? The BM1387 datasheet has a table showing the typical hash rate and power for the BM1387.

 

 

Further reading of the datasheet shows a rather interesting pinout of the ASIC, which contains mostly power pins and a few I/O pins. But what is more interesting is that this device uses UART to communicate with a host at 115200 baud! The datasheet also shows commands for the IC, as well as UART message formats, which talk about hash counting numbers, work counts, and ticket mask.

 

Security Issues in a Narrow Field

Bitmain, the producers of the BM1387, is one of two main companies producing ASIC-based miners for the Bitcoin community. With so many miners looking for stats on low energy consumption and high hash rates, Bitmain is arguably the most popular hardware producer in this space. For a currency that relies on decentralization, this is a real issue for security reasons.

When a hash problem has been solved, the ASIC devices detect this and report back to a program or other software package of the solution. Since these devices are incredibly complex and contain many hundreds of ICs, it would be very easy to integrate a processor that could very quickly relay the solution to a remote server that could claim the solved block instead. Miners are also used to verify blocks in the ledger from other users and a company controlling more than half of the verification machines on the network could potentially have full control over Bitcoin.

Given the enduring popularity of cryptocurrencies, there will almost certainly be more mining ASICs hitting the market in coming years and months.

 

This post is credited to AllAboutCircuits