What is the biggest cost of bitcoin mining? Electricity costs.
To make money, cryptocurrency mining companies across China often take risks and choose to steal electricity to reduce the costs of increasing profits. Among them, Kaiping County, Tangshan City, Hebei Province is the most heavily affected by the theft and exploitation of electricity.
The employee of the electricity company works as a janitor, the deputy director of the Environmental Protection Department also steals electricity for his wife
In December 2019, the verdict of a case of stealing electricity to exploit virtual currencies caused a stir among public opinion and the online community in China.
The court verdict stated that on June 6, 2018, police in Kaiping District, Tangshan City, received a report that someone was stealing electricity in the yard of a ceramic factory. . Upon arrival, they noticed that the complex was empty, but 855 bitcoin mining machines roared. Electricity in the area was stolen as reported.
According to the investigation, the owners of these mining machines are Bui and Vuong. Since June 2017, the two have started buying virtual currency mining machines as well as preparing for plans to steal electricity.
To find out where to put the mining machine, Ms. Wang asked her husband, Luu Quang Quan, the deputy director of the Environmental Protection Office of Khai Binh District to lead the environmental law enforcement team. The official made a deal with a business to use an abandoned complex.
In order to evade the inspection, the group also connected with a surname Li, the electric worker of Tangshan City. They provided him with 20,000 – 30,000 yuan (about 65-100 million) a month in security fees, to work in the news.
For a long time, this entire gang stole the phone worth 850 million. The court’s ruling on the three surname Li, Wang and Bui is imprisonment, from 8 months to 4 and a half years. Luu Quang Quan alone was 22 months in prison for other crimes.
“Special” cultural tradition
In fact, Khai Binh has long had a reputation for stealing and illegally exploiting electricity. As the wave of virtual money swept through the countryside, it aroused its “potential”. According to statistics, there are 7 cases of electric theft to dig virtual money, there are 7 cases in Khai Binh, accounting for 21%.
“The answer is very simple. Khai Binh has a tradition of stealing electricity.”, Vuong Boi, people living in a village in Khai Binh district share.
It all started with Tangshan being a heavy industry city and a core industrial park in Hebei Province. China’s first coal mine and the first railway line was built in Kaiping. But the downside of the early industrialization was that plants consumed a large amount of electricity. And to reduce costs, some of the factories here began to initiate tricks on electricity, starting with small steel plants in Khai Binh. Eventually, the “movement” spread throughout the district.
The rise of electric theft even spawned an “auxiliary army”. They make a living by editing electric meters and helping people steal electricity. Just spend 300-500 yuan (about 1-1.5 million) and anyone can hire people to come home to repair electric meters, reducing the cost to pay each month.
In Khai Binh, the theft of electricity is so common that even people with connections to electricity supply companies have taken the initiative to come to their homes to introduce meter repair services to residents.
An information provided by Khai Binh police showed that in October 2018, a temporary renter from Khai Binh energy supply company, mainly in charge of collecting electricity charges at home, while working take advantage of the opportunity to sell electric meter repair services to customers.
“Since 2018, many villages in Khai Binh often suffered power outages for three days because of faulty transformers”, Wang Boi said. “It’s all due to people stealing electricity”.
As a result, at night, the voltage in this area is often unstable. In households, the voltage can be reduced to 110V, light bulbs become weaker, computers or washing machines are not even able to operate.
And at that time, there were only two solutions. One is to buy an extra voltage regulator. The other is to adjust the clock to steal electricity.
“After a long time, people who buy an regulator feel like they’re being joked like a fool,” Wang Bo said many people in Kaiping were then forced to adjust their watches to steal electricity, because it was too disappointing. “When they all steal electricity, it doesn’t matter if you want to use normal electricity.”
During transmission and distribution of electricity, there is a certain percentage of loss on the line. If no one steals electricity, the loss rate is usually around 5%. But in Khai Binh, the highest rate ever reached 70%. This means that at peak time, more than 60% of the electricity in the area was stolen.
The whole village stole electricity
In 2017, the wave of bitcoin mining came to Kaiping. A business that can convert electricity directly into money immediately makes those who have the habit of stealing electricity go crazy.
In 2018, the power theft in Khai Binh district reached its peak.
“The craziest moment is that all villages steal electricity,” Zhao Jianhua, a resident of Tangshan, shared.
Kien Hoa is not from Khai Binh, but he joined the team to check the situation of electric theft and virtual currency mining in this area. He said that the area where Tangshan’s power was lost was mainly located in Khai Binh and surrounding areas.
The man said in 2018, in the villages here, young and middle-aged people do not work in agriculture, but spend all their time learning how to make money from bitcoin mining. The miners are ordered from Guangdong, and their usage can be found on the Internet.
“Everyone puts the virtual currency mining machine directly in the yard, as long as it is on the shelves and has a roof to shield the rain, so they can start mining,” Mr. Zhao said.
Villagers will directly hire an electrician in the village to fix the meter, use their own power cord or even hire elderly and disabled people in the village to take turns guarding 24/7 at the entrance to the head. village.
“Once people from outside and cars enter the village, the guards will stop for questioning,” Mr. Zhao recalled. “Of course, these people will not prevent outsiders from entering the village, but they do so to extend the time and warn the people inside.”
When strangers arrive, the village electricians will receive an order to restore the meter to normal, so that if the inspectors of the electricity department will not find evidence. Every home will close the breaker of the mining system. At this point, the sound of the active device will disappear and it is difficult to find them.
Some villages even provide electricity stealing services and keep money mining machines. As long as there is a mining machine, you can consign it in the village and let it work here. The villagers are “responsible” for stealing electricity and maintaining the mining system.
“The monthly storage fee for a mining machine can be up to hundreds of currencies,” he shared.
And apparently, this rampant stealing power cannot hide the village officials. But most of these people collude and profit from them.
The government took action and immediately dug a mine hidden in a pigpen
At the end of September 2018, the Tang Son city government held a meeting to implement measures to prevent electrical theft in key areas. The campaign was decided to take place exactly the National Day holiday in China from October 1.
A quick general attack was conducted, Khai Binh alone sent more than 2,650 police. 60 households were robbed of electricity, dozens of criminal cases were set up, 57 were arrested, and 2,635 bitcoin mining machines were confiscated. Only in the first week of October 2018, the wife of an incumbent secretary was detained, the wife of a party secretary was subject to criminal coercive measures. Liu Guangjun, former deputy director of the Kaiping County Environmental Protection Office, was also arrested during this time.
Immediately, 2,625 households voluntarily went to the electricity supply station and the village committee to pay for electricity and compensation. A total of 5.5 million yuan, equivalent to 18 billion dong, was stolen.
“All the villages in Khai Binh then posted a series of propaganda banners against electricity theft. The speakers in the village began to speak out, talking about the shame of stealing electricity.”, Vuong Boi recalled.
A village in Khai Binh mounts an anti-theft propaganda banner.
A document published in April 2019 shows that the average daily electricity consumption in Khai Binh district has decreased to 3 million, instead of 7 million in the same period last year. The rate of power loss decreased from the highest level of 70% to 25%. Other reports also said that over the course of 2018, more than 6,800 bitcoin mining machines were seized.
However, there are still people who take risks, seek to escape under strong repression.
In January 2019, police received a “strange phenomenon” at a pig farm in Khai Binh district. When they investigated, they found that the owner had built a large bitcoin mining mine hidden under the pigpen. There are 659 virtual currency mining machines piled up.
Bitcoin mining pool hidden in pigsty.
To this day, the purge of power theft in Kaiping district of Tangshan city is still underway.
In different regions of China, cases of theft of electricity to extract virtual currencies are still frequently discovered. For example, at the end of December last year, a major case occurred in Zhenjiang. In less than two years, 10 people have used nearly 4,000 mining machines to mine bitcoin, with the stolen electricity amounting to more than 13 million yuan (about 42 billion dong).
In April 2020, a man was arrested by police on suspicion of stealing electricity to mine bitcoins in Changfeng County, Hefei, Anhui Province. The combined amount is 200,000 yuan (about 650 million dong).
And this game “cat and mouse” is expected to continue in the near future, when the bitcoin fever is still not willing to cool down.
Refer to coin1b