In pursuit of easy and fast profits, some miners try to minimize their costs by all means available, thereby obtaining the greatest profit. One of these methods has long been known as the theft of electricity. Is the game worth it if for a dubious benefit you will have to pay a fine several times higher than the income from mining? How can one end up on the prosecution stand for illegal mining of Bitcoin and other cryptocurrencies? These questions will be discussed in this article.

Chinese Mining Adventurer

In the Shanxi province of China, a miner was taken into custody after he confessed to stealing electricity from a train network for a total of 104,000 yuan ($15,000).

Such large-scale theft required the use of a huge number of trains. Regardless of how many places with sockets you reserved, the potential income from mining should have recouped the investment. Knowing this, the accused Xu Xinghua connected directly to the electrical network of Datong trains to secure his mining. Between November and December 2017, he worked on fifty mining pools 24 hours a day.

Thus, by April 2018, he stole $15,000 worth of electricity from the railways and produced 3.2 Bitcoins. According to court documents, the cost of Bitcoin at that time was 120,000 yuan ($19,200). Although from November to December, directly in the period of the theft of electricity, the total cost of the mined cryptos could have been as high as $63,000.

Interestingly, this case directly illustrates the decline in profitability achieved with the development of Bitcoin in the current market. If we deduct the cost of energy consumption, we will see a profit of only $2,500 for a two-month period. And this is without taking into account the cost of equipment, configuration, and placement.

Electricity theft could have increased Xinhua's profits, but now he will spend the next three and a half years behind bars. The court also fined him 100,000 yuan ($14,500) and ordered him to pay for the electricity he used. In accordance with local laws, the court also confiscated all of his mining equipment.

Low prices for electricity in China led to a sharp increase in mining activities in the country before the government stopped illegal mining operations last year.

Religious Mining

In the Irkutsk region, the court recognized the increase in electricity charges for the "Grace" religious organization of the Church of Evangelical Christians, which was engaged in mining Bitcoins.

The representatives of the community tried to prove in court that employees of the housing and communal services wrongfully billed more than 1.1 million rubles for the electricity consumed in May 2017. “The evidence collected in the case, such as access to the Internet, as well as a significant amount of consumed electrical energy is sufficient to allow the court to come to the conclusion that during the disputed period the claimant carried out “mining Bitcoins,” which, obviously, does not apply to religious activities," as said in a court decision.

According to local utilities, the mining equipment was located on the rented community floor. The religious fund “Grace” used more than 0.5 million kWh in May 2017, and from May to August 2017, more than two million kWh. Energy analysts, having analyzed the consumption of Irkutsk printing houses, presented the results of their research. The data obtained turned out to be several times smaller than those of the plaintiff, who, as he said, allegedly was engaged in printing religious literature.

Malaysian Decisions

The Malaysian company Sarawak Energy Berhad (SEB) raided an illegal cryptocurrency mining center, which had recently occupied two floors of a store in the central commercial center and was stealing electricity.

The authorities' suspicions arose when business operators blocked access to a staircase with a lattice door covered with aluminum sheets to prevent personnel from entering the area where the electricity meters were located.

During the raid, the specialists discovered that there was no any electricity meter in the room, since the power source was connected directly from the electrical grid to the switchboard of the room.

“Electricity consumption, measured from direct cable channels was significant and at an estimated cost of about 10,000 rupees per month,” the report says.

All the fake wiring found in the premises were seized, and a police report was filed. The business owners will be brought to justice, and the landlords were advised to inquire about the activities of their tenants in order to avoid involvement in the crimes they committed.

Those found guilty of stealing electricity will be fined according to the law on electricity, the violation of which could lead to a five-year prison sentence.

All for the Sake of Hype

Not all the stories about dashing miners who stole electricity and earned a huge fortune are true. Thus, a fable from the director general of Qiwi Sergey Solonin appeared on the Russian Internet that in 2011, the security service of the company discovered strange activities from self-serve terminals. According to Solonin, at night, they worked too intensively, although they should not have.

Three months later, the reason for such an unusual phenomenon was discovered as one of the company's employees (at first they called him the chief technical director, then the developer) decided to use the company's terminals to mine Bitcoins. Moreover, in just one quarter, he mined about half a million coins. The employee was asked to pay the electricity bills, but he refused and quit. “Now I think we should have reached an agreement with that person,” said Sergey Solonin.

The users of Internet resources ridiculed this story, saying that everything said by Mr. Solonin is an absolute lie. “It seems to me that Mr. Solonin does not understand what he is talking about. In 2011, 500,000 Bitcoins could not be mined in three months. This would require approximately 77 percent of network capacity. And if it were true, then it would be easier to launch a “51% attack.” A block was worth 50 Bitcoins each, 223,000 each month. In 2011 and 2012, a Bitcoin cost $10. At the same time, the complexity has grown by 200 times in two years, and this is the only thing that is true in this story. But the complexity did not stand still, as even in the first three months of 2011, it grew by five times. That is, the entire Qiwi network would also have to have grown by five times in order to retain the very 77 percent of mining. In other words, the mythical technical director would first of all have to mine 100 percent of the network, gradually decreasing to 50 percent, while the Qiwi network itself would have grown by three to four times,” as one of the Pikabu users under the nickname Saillex commented on Solonin’s words.

The user under the nickname fear0fthedark was of the same opinion: “I was working at Qiwi at that time. I can tell you that it is all *** [a lie in folklore language]. Would have noticed that level of mining instantly."

Despite the fact that the last of these stories seems to be a fake, we should not forget that obtaining illegal access to electricity is punishable by law and one should not start mining if one does not have the necessary amount of material resources for this. It is better to choose a country where the prices of electricity are most attractive, and do the mining there.