Thieves Steal 600 Bitcoin Mining Rigs in Iceland

Illustration for article titled Thieves Steal 600 Bitcoin Mining Rigs in Iceland
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Every day seems to bring fresh news of a cryptocurrency exchange robbed by hackers. But thieves in Iceland have reportedly taken it up a notch, stealing around 600 computers that are used to mine bitcoin and its crypto-cousins.


Eleven people have been taken into custody in connection with what authorities claim to be “the biggest series of thefts” in Icelandic history, according to the Associated Press. Most cryptocurrencies rely on some sort of mining system in which more supply is created through a network of computers trying to solve a complex algorithmic equation. The computer that guesses the right number wins ownership over the newly created unit of currency. This takes a lot of processing power, and it’s not very practical for small-time hobbyists these days. You need a lot of gear and resources to outdo world-class mining operations. From the Associated Press:

The powerful computers, which have not yet been found, are worth almost $2 million. But if the stolen equipment is used for its original purpose — to create new bitcoins — the thieves could turn a massive profit in an untraceable currency without ever selling the items.

“This is a grand theft on a scale unseen before,” said Olafur Helgi Kjartansson, the police commissioner on the southwestern Reykjanes peninsula, where two of the burglaries took place. “Everything points to this being a highly organized crime.”

On Friday, a judge ordered two of the eleven suspects to remain in custody as the mystery of where all that equipment went goes on. In February, the CEO of Advania Data Centers told the Icelandic outlet Visir that thieves were captured on surveillance cameras at one of his company’s data centers in Reykjanesbær in January. He declined to say exactly what was stolen due to the ongoing investigation.

Police are finally talking about the case to raise awareness, and they’ve asked the owners of local internet providers, electricians, and storage space units to immediately report any unusual spikes in power usage. Iceland has become a popular destination for large-scale cryptocurrency mining operations. According to the Washington Post, the country produces 80 percent of its power through hydroelectric plants and low energy costs have attracted so many miners that locals fear the grid won’t be able to keep up with the added strain.

The practicality of setting up a mining a system in Iceland with 600 stolen computers seems all but impossible. With a population of just under 340,000 people, it’s a tiny place and it’s unlikely that an impromptu data center would be able to fly under the radar unnoticed. Of course, the equipment could already have been smuggled into another country.

Willie Sutton famously said he robs banks because “that’s where the money is.” Stealing cryto-mining equipment raises the bar on that theory. It’s more akin to hijacking the US Mint.


[Associated Press]


Al Roderick

I was just reading an article this morning about the price of electricity in relation to these new aluminum tariffs. Apparently cheap electricity in Iceland means that it’s cheaper for US companies to ship raw minerals to Iceland for production into aluminum ingots at facilities they own and operate than it is to build production closer to the mines or the consumers. China’s boom in both aluminum production and cryptocurrency is a side effect of their monster oversupply of electricity capacity. They have both a building boom in renewables, a monster dam project that just finally got to full capacity in 2012, and contracts with coal plants that guarantee a certain level of profitability so they don’t just turn them off.