Technology

Employee Secretly Mined 500K Bitcoins Only To Lose Them Later

secretly mine Bitcoins
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Bitcoin mining can be costly, so one crooked miner came up with a turnaround to lower his cost. This person used the resources of the company for which he was working to secretly mine Bitcoins, according to Rubase.

How he was able to secretly mine Bitcoins?

Sergey Solonin, CEO of Russian payment services provider Qiwi, claimed that an ex-employee used the company’s payment terminals to secretly mine Bitcoins in 2011. Solonin didn’t name the employee, but said that he was a programmer and was able to mine 500,000 Bitcoins – worth about $5 million then and about $4 billion now.

“Most of all, I was amazed by the amount: in three months he has managed to mine 500 thousand coins, which then cost $5 million. And now it’s billions of dollars,” the CEO said. Solonin revealed this while speaking at the Moscow Advanced Communications School (MACS).

Later, after noticing increased electricity usage by the terminals during the night, Qiwi found out that their employee was using it to secretly mine Bitcoins. However, after being confronted, the employee refused to give up the Bitcoins and resigned. Interestingly, according to the reports, the programmer was also not able to use those Bitcoin as he somehow lost them.

According to Solonin, this was the first time he was introduced to the concept of Bitcoin mining. I thought ‘what a crazy stuff,’ we’re struggling to earn 3 cents on those terminals and such a gold mine is actually hidden here,” he said.

Thus, realizing the potential of the Qiwi terminals, the company made efforts to develop similar operations for Bitcoin mining. However, soon they realized that the computing power of their terminals was insufficient when compared to other miners in the market.

“I gathered a team and said we had to mine on the terminals; we then released a project we’d been working on for three months in order to resurrect our CTO’s work, but when it came down to it, mining was impossible and our computers couldn’t handle it,” he said.

Now deeply involved in blockchain

Qiwi is currently focusing on artificial intelligence and “blocking,” which the CEO believes will ultimately integrate computer systems. The company is supporting Russian government work on the Blockchain, and in March of last year, launched its own blockchain subsidiary.

Solonin believes that going forward, more data will become available on the block, including medical data, helping to increase life expectancy. AI, on the other hand, will help find a correlation between the food that one eats and the diseases they get.

Talking of the cryptocurrency, Solonin said that they are very effective, but in terms of saving, exchange value and accumulation, they might not appeal to most. According to Solonin, a fast and convenient cryptocurrency is the need of the hour.

Qiwi recently created the first Russian crypto investment bank. It also is the first Russian company to join the R3 blockchain consortium.

Cryptocurrency mining – growing popular among hackers

Qiwi’s employee used the company’s resources to mine Bitcoins about seven years back, but among cyber criminals, cryptocurrency mining is growing popular only now. Though ransomware is still the most popular method among cyber criminals to generate income, reports of cryptocurrency mining malware is also getting quite frequent.

Hackers are infiltrating all the systems – be it smartphones, PCs and servers – to use their processing power to secretly mine cryptocurrency. It is interesting to note that though Bitcoin is the most popular cryptocurrency, criminals are staying away from it.  A recent report from researchers at Imperva says the same thing.

“Bitcoin is the arguably the most popular crypto currency that exists, but still we have not seen a single attack trying to infect servers with Bitcoin mining malware,” the report says. This comes as a surprise that despite Bitcoin’s high value it is not on attackers’ radar.

There could be many reasons for it, but one major one is that Bitcoin mining needs specialized hardware with an application-specific integrated circuit (ASIC). Further, successful mining of Bitcoin requires high amounts of computing power, and most home and office computers don’t have that.

“Bitcoin’s mining difficulty has continued to increase requiring significantly higher amounts of computing power than provided by average computers,” FireEye’s senior threat intelligence analyst, Kimberly Goody, told ZDNet.

Due to such reasons, hackers focus on alternative cryptocurrencies such as Monero, which can be easily mined with any computer, or even with a smartphone.