- Xu Xinghua found guilty for a “miner theft case.”
- Xu was able to mine 3.2 BTC with stolen electricity
- Despite free electricity, his operation was unable to turn a profit
With the ever rising costs of electricity for Bitcoin miners, some less scrupulous miners are exploring less than ethical ways of reducing their electricity bills. One Xu Xinghua has made the headlines in Chinese The Paper yesterday when he was caught stealing electricity from a railway operator to run his Bitcoin mining operation. Xu is now in the police custody.
It is unclear how he was able to access the Kuoquan railway’s electricity for this long without being caught. According to the verdict, the man tapped power from a pole close to the West second plant of the railway network.
3.5 years in prison
As per the Judgment Document Network, he will pay a fine of 100,000 Yuan ($14,500) as well as serve a jail term of up to three and a half years. Additionally, he will have to pay for the electricity he has been stealing. He has stolen power amounting to 104,000 Yuan, which is about 15, 000 US dollars. Xu Xinghua will also lose all his mining equipment as the local authorities confiscated the assets.
With a free and constant supply of electricity, everyone would believe that Xu Xinghua was managing a profitable venture. On the contrary, by April in 2018, he had mined merely 3.2 BTC, valued at about $20,000. During late 2017, Bitcoin rose to almost three times its current price point, and with many miners believing it will inevitably recover to those prices and higher, the competition is steep.
Free Electricity not Enough
It is easy to believe that cheap power is key to remaining profitable in the mining business. However, with the 2018 bear market, profit has been cut very close to the bone for many operations, no matter how cheap their electricity.
The Bitcoin Energy Consumption Index reveals that consumption of electricity by bitcoin miners shot up by 29% in the past one month. Although bitcoin mining only consumes 0.13% of the world energy, it has increased considerably over time.
