When you think of a cryptocurrency mining farm, you might picture thousands of high-powered specialized mining rigs humming along in search of Bitcoin rewards, quite likely in some modern, hyper-cooled facility. Bitcoin mining is big business, after all.
But in Ukraine last week, the government’s Security Service (SBU) discovered something quite different when it busted a mining operation for allegedly stealing electricity: thousands of PlayStation consoles, apparently modified to mine cryptocurrency.
Of the nearly 5,000 devices seized by authorities, some 3,800 of them were video game consoles, seemingly PlayStation 4s in photos shared by authorities, along with more than 500 PC graphics cards and various PC processors, phones, flash drives, and documents. According to an official report from the SBU, the mining operation was discovered in the city of Vinnytsia, which is nearly 170 miles from the capital of Kyiv.
The mining farm was reportedly located in a former warehouse of JSC Vinnytsiaoblenergo, a regional electricity provider. The SBU claims that the offenders stole electricity from the provider, and used doctored meters to hide their tracks. The agency estimates that between 5 and 7 million Ukranian hryvnia ($183,300 to $256,600 USD) worth of electricity was pilfered from the provider, and that such usage could have led to nearby power outages.
Thousands of game consoles are notable for a mining operation, since mining is a global competition between server farms stocked with high-grade hardware. While the PlayStation 4 is still on the market as a gaming device despite the recent launch of the PS5, the nearly eight-year-old hardware is child’s play compared to the types of top-tier rigs that profitable miners use today. Even if they used the more powerful PlayStation 4 Pro consoles, released in 2016, the systems can’t compare to today’s cutting-edge PC gaming GPUs when it comes to crypto mining.
PC graphics cards have been in short supply for years due to the incredible demand for high-powered GPUs for cryptocurrency mining—an energy-intensive process in which computers compete to solve complex equations to earn crypto rewards. Professional operations typically rely on the aforementioned specialized rigs called ASICs, which are purpose-built to maximize the mining hash rate compared to the energy required to operate.
According to an expert Motherboard spoke to, though, these old consoles may have been financially viable after all. While energy costs are a key consideration for most miners, this Ukranian operation allegedly stole its electricity. Given that, even a years-old game console could potentially turn a profit, depending on which coin it was mining.
“In a case like this, where the miners are getting the electricity at no cost, the math changes,” explained Max Galka, co-founder and CEO of blockchain analytics firm Elementus. “Since there is no energy expense, it becomes profitable to mine with any processor, including old GPUs. Buying up some old PS4s and using the GPUs to mine is not the most efficient way, but with zero energy cost, it would still make for a profitable operation that is cheap to set up.”
Galka suggested that the operation may have been mining Ethereum, which “uses a more GPU-friendly mining algorithm” than Bitcoin and some other crypto coins, he said. According to the mining profitability calculator at WhatToMine, Ethereum currently leads the list, with Ethereum Classic and lesser-known cryptocurrencies—which could be easier to mine but would come with a smaller payday—behind it.
The SBU is looking into whether JSC Vinnytsiaoblenergo employees had any involvement in the electricity theft for the mining operation, which the agency described as the “largest underground crypto farm.” The electricity provider has denied that possibility, claiming that “cryptocurrency mining equipment has never operated in the premises owned by our company.”
Cryptocurrency in Ukraine is in a gray area; it's not banned by the state, but it's not recognized by the government, either. The Kyiv Post reports that, according to Blockchain Ukraine CEO Nataliya Drik, the Ukraine Security Service “often abuses its power and seizes valuable equipment worth thousands of dollars without legal justification.” Notably, the SBU has been cited for human rights abuses, and the country’s parliament is currently considering reforms for the agency.
Drik added that crypto miners often work in secrecy or leave the country to avoid potential raids. “It also prevents the flow of foreign investment into the country,” she told the outlet.