Singaporean charged in US mined cryptocurrencies using stolen computing power: Why bitcoin mining saps power

Bitcoin mining is the earning of new bitcoins using computers that solve complex mathematical problems.
Bitcoin mining is the earning of new bitcoins using computers that solve complex mathematical problems.PHOTO: AFP

SINGAPORE - A Singapore citizen has been charged in the United States with crimes related to the mining of cryptocurrencies. Ho Jun Jia, also known as Matthew Ho, is alleged to have used stolen identity and credit card account information of California and Texas residents to obtain computing power and services.

The 29-year-old is reported to have been arrested by the Singapore Police Force last month.

What is bitcoin mining?

Bitcoin mining is the earning of new bitcoins using computers that solve complex mathematical problems.

In this, "miner" computers perform a job similar to a "central bank", recording transactions in a ledger publicly accessible to anyone while checking the validity of these exchanges.

For their work, mining computers are awarded bitcoins, which can make the enterprise profitable.

Why does it use so much computing power?

Bitcoin mining is a very competitive field, with millions of computers competing to be the first to solve extremely difficult mathematical problems.

Some have put the chance of arriving at the right answer at one in six trillion.

Requiring the most up-to-date software programs, bitcoin mining often consumes more energy than the profits generated can cover.

 
 

It also does not help that the field is dominated by "mining pools", or a group of miners pooling their resources to edge out smaller competitors.

Some estimates suggest that the annual energy consumption of the bitcoin system is similar to that of countries like Greece, Colombia or Switzerland.

Sources: Reserve Bank of Australia, New York Times, The Straits Times