As Bitcoin’s price surged this spring to a new all-time high, the spotlight shining on its controversial mining process only got brighter. Bitcoin, Ethereum, and many other cryptocurrencies use an energy-intensive “proof-of-work” process that makes computers on its decentralized network compete to solve complex mathematical equations to verify a batch of transactions; this makes the network less susceptible to certain attacks, and earns miners crypto rewards.
Given the competitive element in the quest for valuable cryptocurrency, powerful mining rigs—essentially, PCs purpose-built to maximize mining rewards—are the preferred tool of serious crypto miners. They are expensive, and persistent demand and manufacturing delays can mean months-long waits for rigs to be delivered. This week, police in Malaysia crushed 1,069 of them with a steamroller.
Authorities in the city of Miri in Sarawak, Malaysia seized 1,069 rigs from miners alleged to have stolen electricity for their operations, per a report from local publication The Star. The devices were seized in a joint operation between Miri police and Sarawak Energy Berhad between February and April, and have an estimated value of RM5.3 million ($1.25 million USD), according to the outlet.
Six individuals were arrested for electricity theft in the operation, and “have been fined up to RM8,000 and jailed for up to eight months," according to a statement from Miri police chief ACP Hakemal Hawari that was quoted by The Star. Local Sarawak news outlet Dayak Daily adds that the rigs were collected over the course of six separate raids. Sarawak Energy Berhad estimates that it lost RM8.4 million ($2 million USD) in energy that was stolen from its lines for the mining operation, the outlet reported. Dayak Daily also uploaded a video to YouTube showing the miners being steamrolled.
Neither outlet stated why the police felt it was necessary to destroy the machines in such dramatic fashion, though it certainly sends a strong message. Electricity theft is a persistent issue in numerous regions where Bitcoin is mined, as some operators use illegal means to secure the cheap electricity necessary to make a big profit mining cryptocurrency.
"The electricity theft for mining Bitcoin activities has caused frequent power outages, and in 2021, three houses were razed due to illegal electricity supply connections," The Star quotes Hawari as saying.
According to the report, the mining rigs were demolished in the parking lot of the Miri district police headquarters this week, as seen in the video above. Bitcoin enthusiasts might watch the video and see dreams of prospective crypto wealth crushed to bits, while anti-mining advocates are likely to see Bitcoin’s ecological impact being slightly curtailed amidst all of that e-waste.
Bitcoin’s distributed ledger design ensures the security and stability of the blockchain network, but the mining model requires exorbitant amounts of energy. Digiconomist estimates that the Bitcoin network now uses as much energy annually as the entire county of Sweden, and the energy use of the network is sure to rise as more mining power is added to the network (and vice versa).
The leading cryptocurrency’s early-year surge was halted in part by Tesla announcing in May that it would no longer accept Bitcoin payments, citing concerns over the use of fossil fuels in mining. It was an about-face for the electric car maker, which announced in February that it had purchased $1.5 billion worth of Bitcoin to hold on its balance sheet, and soon after began accepting Bitcoin payments for a brief span.
Tesla CEO Elon Musk, the terminally-online Dogecoin memer, has since become reviled by many crypto enthusiasts for his perceived meddling in the scene, including the formation of a “Bitcoin Mining Council.” Bitcoin’s price fell swiftly following Tesla’s announcement, and at a current price just above $32,000 per coin, it’s worth about half of its all-time high set in April.
China’s increasing crackdown on cryptocurrency has also recently dampened enthusiasm around the industry. Crypto mining has been banned in multiple provinces, causing the Bitcoin network’s hash rate (or total computational power) to sink as miners shut down or move abroad. The People’s Bank of China also told top banks and payments services to root out cryptocurrency users and implement stricter know-your-customer processes.
Earlier this week, the Ukrainian Security Service (SBU) similarly busted a crypto mining operation for allegedly stealing electricity from a nearby regional energy provider. That bust had its own unique hook: some 3,800 PlayStation 4 consoles made up the majority of the seized devices, as the systems had apparently been modified to mine an unidentified cryptocurrency. Game consoles are significantly less powerful than dedicated PC mining rigs, but there’s still potential for profit when the energy cost is zero.