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Default Bitcoin Mining Operation Is Uncovered During U.K. Drug Bust

Bitcoin Mining Operation Is Uncovered During U.K. Drug Bust
By Davies & Ostroff, 5/28/21, Wall St. Journal

British police got a shock when they raided a suspected
illegal cannabis farm this week: Instead of halogen lamps &
weed, they found about 100 computers mining bitcoin.

Officers from the West Midlands Police forced entry into
the warehouse in an area west of the city of Birmingham
known as the Black Country with a drug warrant, after intel
suggested it was being used to grow the illegal crop.

Unusual amounts of wiring & ventilation were visible on the
outside of the building & a drone had measured high levels
of heat rising from it€”classic signs of a cannabis factory.
But the officers broke in to discover a huge bank of
computers in what they now suspect was a cryptocurrency mine.

They also found that the computers used stolen electricity
by tapping directly into the power supply outside of the
warehouses circuits. Police said the mine consumed
thousands of pounds worth of electricity.

Crypto mining, particularly for bitcoin, has become a
lucrative biz as its value has shot higher, peaking at
about $60,000/bitcoin in April. But mining the coins, where
computers race to solve complex math puzzles, is also hugely
energy-intensive & very costly.

€śMy understanding is that mining for crypto is not itself
illegal, but clearly abstracting electricity from the mains
supply to power it is,€ť Sgt. Jennifer Griffin said in a
statement on Thurs. She added that no arrests were made
at the premises, but that the police would be making
inquiries with the owner of the warehouse.

The British warehouse had €śall the hallmarks of a cannabis
cultivation setup,€ť Sgt. Griffin said. €śIts certainly not
what we were expecting.€ť

Cryptocurrency mining has boomed as the value of bitcoins
rocketed this year. When computers compete to harvest fresh
coins by solving math puzzles€”a process known as mining€”the
new coins produced have fetched high prices.

On top of this, when a computer successfully solves the
puzzle, it is able to process some bitcoin transactions on
the network & can charge a fee for those services. Daily
rev from mining globally reached a record high of $77.8 mil
on April 15, acc. to CoinDesk, a research website that
tracks cryptos. On that same day, bitcoins dollar value
peaked at $63,381.20.

The process to obtain bitcoin is highly energy-intensive.
As more people compete to harvest the crypto, the harder
the math puzzles get & the more energy is required to gain
it. Bitcoins high energy use has drawn criticism in recent
weeks from Elon Musk.

Chinese officials have also recently indicated that they
will be taking measures to curb bitcoin mining in China,
one of the largest markets for it. Some mining services
have already started banning mainland China internet
addresses from accessing their platforms in the wake
of those comments.

Iran this week banned crypto mining for 4 months after a
series of unplanned blackouts in cities. President Rouhani
told a cabinet meeting that crypto mining was draining
2 gigawatts of electricity from Irans power grid each
day, acc. to the BBC.

The fictional DeLorean time machine in €śBack to the Future€ť
needed just 1.21 gigawatts to travel thru time. And a
single gigawatt is enough to power 110 million LED lights,
or is equivalent to the power of 1.3 million horses, acc.
to the U.S. Dept of Energy.

Global crypto mining consumes about 114 terawatt-hrs/year,
which is more than the annual electricity needs of the
Netherlands or the Philippines, acc. to a tool built by
researchers at Univ of Cambridge Judge Business Schools
Centre for Alternative Finance.

Indoor cannabis farms also use heavy amounts of electricity
to power lights, fans, water pumps and heating systems.
U.S. cannabis farms consumed about 1% of national electrical
power in 2012, acc. to a study by the Lawrence Berkeley
National Lab. Today, that would be equivalent to nearly
40 terawatt-hrs/year.