Chinese school involved in cryptocurrency mining
by Ong Teng Wee
15 Nov 2018
A school in Hunan was discovered housing 8 mining machines for cryptocurrency. The operation of these mining machines costed the school over 2000$ in electricity bills, and resulted in the firing of the headmaster, who installed these machines . Teachers at the school became suspicious of a whirring noise that continued day and night, local media report.
This led to the discovery of the machines, which were mining the crypto-currency Ethereum.The excessive electricity consumption had previously been reported to the headmaster, Lei Hua, but he reportedly dismissed it as being caused by air conditioners and heating devices.The headmaster had originally spent 10,000 yuan on a single machine for use at home, but allegedly decided to move it to the school after he saw how much electricity it consumed.The deputy headmaster also became involved in the scheme and allegedly acquired a ninth machine for himself in January, which was also installed at the school.The computer network in the building became overloaded as a result of the mining activity, according to reports, and this “interfered” with teaching.The headmaster was fired in October and his deputy received an official warning.A local authority responsible for “discipline inspection” has claimed the money that was made through the mining activities.
To back up, what is cryptocurrency? For the unaffiliated, cryptocurrency is a form of decentralised digital currency, with a higher level of security compared to conventional currency, and is not owned or controlled by a single entity. It relies on distributed ledger technology, typically a blockchain, that serves as a public financial transaction database. Bitcoins are not created through conventional means. They are created using algorithms fed into computer processors. Graphic processing units, the ones used in the specialised cryptocurrency mining machines, are more effective than normal processors in creating cryptocurrency.
By providing computing power for validating transactions on that network, mining-machines are rewarded with newly generated coins, making it a potentially lucrative exercise - especially when done at scale.
Cryptocurrency mining results in a high level of electricity wasted, and therefore sky-high electric bills, therefore stealing electricity is one way that people have tried to maximize their revenue - by avoiding those costs it can drastically improve returns on a mining operation.