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After hacking exchanges, now North Korea might also be mining Bitcoin

After hacking exchanges, now North Korea might also be mining Bitcoin

Bitcoin & Blockchain
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According to Recorded Future, Kim Jong-un regime is utilizing these idle coal supplies for powering bitcoin mines.

In brief:

Recorded Future, an intelligence research firm has recently found that North Korea has begun mining Bitcoin on May 17 and may be using the digital currency in order to generate capital for the regime.

The U.S. pressured the United Nations to put sanctions on North Korea, particularly to prevent Kim Jong-un from obtaining hard currency. However, according to experts, the country seems to turn towards bitcoin to get around increasingly intrusive sanctions barring its access to the world banking system and fund its missile and nuclear programs. Further, last month, the U.S.-led sanctions banned the country from exporting coal to its biggest buyer China.

A research was conducted by Recorded Future, an information security firm that counts the Central Intelligence Agency’s venture capital arm among its investors, and security non-profit Team Cymru. According to it, Kim Jong-un regime is utilizing these idle coal supplies for powering bitcoin mines. The reports indicate that bitcoin mining activity started in North Korea on May 17. The firm told Quartz that the analysts don’t know if the mining is ongoing, but the activity was present in the last data point Recorded Future collected, from July 6.

Bitcoin Mining is a computer process used to secure and verify bitcoin transactions on a decentralized network. Miners are paid transaction fees for newly created coins, called block rewards. As an incentive to the miner for checking bitcoin transactions and adding them to the blockchain, every 10 minutes the bitcoin network releases 12.5 bitcoins (about $50,000 worth, at the current bitcoin price).

A vast amount of electricity is required for mining so as to feed the huge computational power necessary for miners to release new supplies of bitcoin. Bitcoin mines are generally large server farms containing thousands of machines exclusively designed to mine the cryptocurrency. For instance, the electricity bill of one of the world’s largest bitcoin mines in Inner Mongolia is of $39,000 per day.

According to the International Energy Agency, North Korea is among the top 10 net exporters of coal globally. Now, since the sanctions restrict country’s revenue from coal exports, it might use some coal to generate electricity for a bitcoin mine. Also, the elites in North Korean with unrestricted access to the internet, were using virtual private networks (VPNs) to make online purchases with bitcoin, reported Recorded Future, an intelligence research firm. Be it logging into Gmail or Twitter accounts, or even watching porn, these VPN users were doing it all. The firm said it was able to track the activity because the VPNs and other traffic-masking techniques were used incorrectly. It is believed in order to generate revenue for the increasingly isolated regime; this is just one part of a larger strategy. However, how much processing power the country’s suspected bitcoin mines possess couldn’t be found out by the researchers.

Prior to this, North Korea’s army of hackers was reportedly targeting cryptocurrency exchanges in South Korea and related sites. FireEye, another security firm, found evidence that North Korean hackers were stealing crypto funds. Also, allegedly North Korea was behind the global ransomware attack WannaCry, which froze computer systems and demanded a bitcoin payment to unlock them. After the UN Security Council approved some of the harshest sanctions on the country, these aspects indicate that it is more than likely that mining bitcoin may end up becoming a viable source of income for the North Korean Government.

 

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