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Bitcoin Crime Government Supercomputing

NSF Researcher Suspended For Mining Bitcoin 220

Posted by Unknown Lamer
from the probably-shouldn't-do-that dept.
PvtVoid (1252388) writes "In the semiannual report to Congress by the NSF Office of Inspector General, the organization said it received reports of a researcher who was using NSF-funded supercomputers at two universities to mine Bitcoin. The computationally intensive mining took up about $150,000 worth of NSF-supported computer use at the two universities to generate bitcoins worth about $8,000 to $10,000, according to the report. It did not name the researcher or the universities."
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NSF Researcher Suspended For Mining Bitcoin

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  • by Shadowmist (57488) on Monday June 09, 2014 @09:12PM (#47199811)
    This is pretty much at the lowest of the low category, Someone who takes up taxpayer funded computer time to mine Bitcoin, should essentially be barred for life form the facility... and that's for starters.
    • by meerling (1487879)
      Now if he was doing research into bitcoin and the mining of bitcoins, there might be a reason for him to have done that.
      Of course the remote access and use of a mirror site in Europe rather points to it being illicit.
      • The bitcoins would then be the property of the university and he'd be charged with theft, not getting in trouble for misusing university resources.

        • Embezzlement sounds a reasonable charge to me but we don't have all the details of what was considered. Maybe he bargained the charge down to the equivalent of a "dishonorable discharge". $150K is about 2-3 man years of research wages, which sounds like a lot but is little more that a rounding error in the bigger picture, ~0.01 cents per American. He may also have personal problems, gambling/drug addiction, neither side would have much to gain from criminal proceedings unless the practice was rampant and t
      • Now if he was doing research into bitcoin and the mining of bitcoins, there might be a reason for him to have done that.

        "Research into bitcoin"? Seriously? They were mining bitcoins and doing so at taxpayer expense. What legitimate "research" could they possibly have been doing?

        • by dbIII (701233)

          "Research into bitcoin"? Seriously? They were mining bitcoins and doing so at taxpayer expense. What legitimate "research" could they possibly have been doing?

          To see what each one tastes like? My bad, that only works with whales.

    • Re: (Score:2, Troll)

      by asmkm22 (1902712)
      Seems no worse than what politicians do with our money.
    • I suspect you're joking but either way i hope they don't tag them w/ felonies just for this...the DA will surely pull some ridiculous damages figure but there's no reason to cripple good engineers forever w/ a felony for this

      • Re: (Score:3, Insightful)

        by iroll (717924)

        This is a felony. It's fraud and theft. Good engineers don't get fired for stealing 10% or less of what good engineers in the prime of their careers are making.

        He didn't download a movie. He didn't copy that floppy. He appropriated a taxpayer resource to line his pockets.

        • Given the low takings in relation to salery for someone in such a position, I suspect it may have been motivated as much by bragging rights or enthusiasm for bitcoin as direct profits. Sometimes you just want to impress people with your mining rig.

        • by ultranova (717540) on Tuesday June 10, 2014 @09:47AM (#47202879)

          He appropriated a taxpayer resource to line his pockets.

          So basically, he's the very model of a good capitalist, sharing the costs and keeping the profits. Why should he be punished for his entrepreneurship? Why do you hate freedom so much?

          Bald eagles cry tears of blood, red like the flag of Soviet Union, over your post.

      • Re: (Score:2, Insightful)

        by DerekLyons (302214)

        there's no reason to cripple good engineers forever w/ a felony for this

        Yeah, there is a reason to cripple a "good"* engineer forever with a felony for this - he committed a bloody felony.

        *Presuming he's "good", something neither you nor I know... but misuse of someone else's property indicates that he has significant ethics problems, which argues against him being "good".

      • by Khashishi (775369)

        Minor thing, but it's more likely a scientist than an engineer.

      • the DA will surely pull some ridiculous damages figure but there's no reason to cripple good engineers forever w/ a felony for this

        If it was indeed a crime then after due process takes its course then they absolutely do deserve to be tagged with a felony. There are plenty of engineers who are corrupt just like any other profession. If they committed a crime then they deserve the punishment. While innocent until proven guilty and all that, if they did what it appears then the absolutely deserve to go to jail and pay restitution.

      • by dbIII (701233)
        Of course there is a reason. You fuck other people around in the workplace for your own profit and you should get penalised as if you were stealing their equipment and selling it.
    • 1. you don't know if he actually wasted anything (the computers could have been idle otherwise)
      2. perhaps he intended to donate the money, or he needed it to help a relative, etc.; you just don't know anything about the situation.

      • by cdrudge (68377)

        1. you don't know if he actually wasted anything (the computers could have been idle otherwise)

        An idle computer consumes less resources to operate then one processing some task. Not only electricity to run the computer, but the considerable amount of heat that is generated that has to be conditioned. The article and the report don't go into details so we're just left presuming the cost to operate the supercomputers during the mining was $150,000.

        I would imagine that there isn't too much idle time on a super

      • 1. you don't know if he actually wasted anything (the computers could have been idle otherwise)

        Not relevant. Even if the computer was idle that doesn't give him the right to utilize it for his own enrichment. Furthermore even an idle computer costs money to operate and maintain, so if he did what he is accused of then it was certainly theft on some level.

        2. perhaps he intended to donate the money, or he needed it to help a relative, etc.; you just don't know anything about the situation.

        You're going to use a Robin Hood defense? You don't get permission to steal things just because you "intend" to donate the money to someone needy. I could point out that you don't know anything about the situation either. You have no evidence th

        • by ultranova (717540)

          I cannot walk into Walmart and steal something just because I intend to give it away to someone needy.

          Of course you can. It breaks the law and makes you a criminal, but you can make that choice. It may or may not be a good choice, but pretending it isn't a possible course of action is self-delusion.

    • Well if you look at it a different way... If the Computer is Idle then it is just wasting everyone money. So use the spare CPU Cycles to mine Bitcoins, and make a few bucks.

      I don't agree with that way of thinking, however way things get budgeted it is often hard to share your resources with other groups so the system seems to encourage computational inefficiency. He could run Seti-at-home, but he chose to mine bitcoins.

      This really should be a slap on the hand type of punishment. Just like if you got a sup

      • by dbIII (701233)
        That's a pretty big assumption which is unlikely to occur on many systems that go under the name of "Supercomputer". From what I've seen it's like telescope time for astronomers - if there isn't a long queue to use the thing then it mustn't be working properly at the time.

        Just like if you got a supercomputer and used it to play games

        I think this is probably where we get to see the divide between the "never give a sucker and even break" people and those that see such an attitude as amoral. Yes, perfectly f

  • $150,000? (Score:4, Interesting)

    by Anonymous Coward on Monday June 09, 2014 @09:16PM (#47199839)

    Is that figure just based on some arbitrary appraisal of the the machine's time or what?

    • by Anonymous Coward

      It's based on the rate that the owning entity (typically a university or the DoE) charges for time on it, which is (at least in theory) correlated with the machine's electric, AC (i.e. more electric) and ISP bills, the hardware manufacturer service and support contracts, and the price of the highly paid technicians and sysadmins who keep it working. All of these are nontrivial.

    • by pla (258480)
      Is that figure just based on some arbitrary appraisal of the the machine's time or what?

      This counts as a good question, why did it get modded out of existence?

      $150k counts as a lot of electricity. Even at the current difficulty, I find it hard to believe someone could have used that much power to mine only $8k worth of BTC.

      So how did they get that number? Prorated over the expected useful lifetime, so quite possibly one or two days of CPU time at 500 million dollars total depreciated over 18 months
      • by batkiwi (137781)

        He was likely doing CPU based mining. That would be expensive and inefficient compared to ASIC or even GPU mining.

      • by swb (14022)

        I got in trouble in high school for "stealing" timesharing time at the local University (early 80s) and back then at least the time was valued based on some "retail" cost of the computing time based on operational costs.

        Back then it was really bullshit, because unless you kept other jobs from running the damn system was up anyway and really didn't use any less resources if nothing was running. The same overpaid fulltimers and grad students still worked at the computer center, etc.

        It's probably mostly still

      • by rvw (755107)

        Is that figure just based on some arbitrary appraisal of the the machine's time or what?
        $150k counts as a lot of electricity. Even at the current difficulty, I find it hard to believe someone could have used that much power to mine only $8k worth of BTC.

        So how did they get that number? Prorated over the expected useful lifetime, so quite possibly one or two days of CPU time at 500 million dollars total depreciated over 18 months?

        I guess they hired a RIAA lawyer, and he tries to copyright those bitcoins!

      • $150k counts as a lot of electricity. Even at the current difficulty, I find it hard to believe someone could have used that much power to mine only $8k worth of BTC.

        Electricity is just one of the costs involved and probably not even close to the biggest one. You have to consider the cost of the computers and other gear amortized across usage, rent/facility cost, support infrastructure, staff, insurance, maintenance, and more. Furthermore you have to consider the opportunity cost [wikipedia.org] if this guy used the system when it could have been put to other more productive use. Opportunity cost is probably where much of the $150K comes from. It was the price they could have sold

    • by Khashishi (775369)

      No. This figure is probably based on the actual rates that the supercomputing facility charges to research projects. For example, look at:
      http://www.nersc.gov/users/acc... [nersc.gov]

    • by Xyrus (755017)

      It's not just machine time. It's also personnel time, electricity, possibly wasted time for others since resources were being used, etc. It seems that the machines he was using didn't have GPUs so it was CPU only mining. This would have consumed a fair chunk of time and resources to generate that $8K-$10K.

      This guy is incredibly stupid. I can't imagine what was going through his head when he tried to do this.

    • by Enry (630)

      It's probably not arbitrary.

      As background, I used to run a cluster at a Major New England University and got involved in some of the chargeback models that were set up. Some of the money for the cluster came from federal funds so I learned some of the high level rules associated with this.

      You take all the charges associated with putting a cluster together - the hardware, software licenses, maintenance, system administrators, storage, storage administrators, network hardware and network administrators, data

  • I would've liked to take first the high ground,

    but since that ship has sailed,

    wasn't this bound to happen once the electricity costs of bitmining begun to damage profitability? Perhaps even before the Peak Coin event, using electricity and the resources of others was attractive to a certain type of miner...

  • whoops (Score:2, Insightful)

    by globaljustin (574257)

    I used to do funded networking work and this is one of the *first* things I thought when I heard about BTC...a friend who is a router R&D now and I talked all about it of course...never actually **did it**

    I would have definitely put a miner bot in a broom closet next to a computer lab in a freshmen dorm or something...nowhere near our program's stuff, for alot of reasons

    we just talked though...if my friend had took the time he'd be litterally rich right now...at least 6 figures b/c we were in school fro

    • by mysidia (191772)

      now, i sure hope they don't "throw the book at them"...I hope they don't get felonies unless unavoidable and either way no prison time...get them on a hardcore probation for 5 years....

      I think it should be a civil matter..... bill the researcher for the computer time intentionally misappropriated for non-work-related activities

      This is really no different from an office worker abusing employer equipment for personal gain; e.g. long duration international calls to family placed on the employer's dime.

      • by Khashishi (775369)

        And why shouldn't an office worker embezzling from an employer be subject to criminal penalties? What is your distinction between a civil and criminal matter?

        • And why shouldn't an office worker embezzling from an employer be subject to criminal penalties? What is your distinction between a civil and criminal matter?

          Proportionality and criminal intent. In the case of the bitcoin miner, he stole the use of $150,000 worth of computer resources to make $8,000-$10,000 for himself. Most people will agree that these are not small sums and should be treated seriously, hence criminal penalties are due. In the example of the parent post of an office worker making long duration international calls to family paid by his employer, the sums are likely in the small hundreds at most and there was no intention to make money for himse

      • I think it should be a civil matter..... bill the researcher for the computer time intentionally misappropriated for non-work-related activities

        Restitution is certainly warranted but whether it is a civil or criminal matter depends on the laws and whether he broke any. The fact that he took pains to hide his identity seems to indicate awareness that what he was doing was wrong. If the dollar amount of what he took is high enough then it becomes a criminal matter. If one of my employees stole company resources I would certainly fire them and seek restitution and if it was more than a pad of post-it-notes I'd probably call the police as well.

      • long duration international calls to family placed on the employer's dime.

        Personal profit so more like charging people to use the employers phone system and pocketing the cash while the employer pays the bill.

    • by Guppy06 (410832)

      now, i sure hope they don't "throw the book at them"

      Would you feel the same way if he'd walked off with six figures worth of hardware rather than "computer time?"

    • The difference between talking about something and doing it is the difference between amusing talk and a crime. We've also talked about putting bitcoin miners in all the high power FPGAs we use for real time feedback. The thing is that we DIDN'T.

      As far as the penalty - this is like any other theft of materials. There must be applicable laws.

  • Villain? (Score:2, Funny)

    by Anonymous Coward
    NO. This man is a hero for disrupting those rigged climate simulations confirming AGW. He wasn't in it for the money per se, it's just that mining bitcoin was simply the best way to do it. Plus, mining bitcoin had the added social benefit of further cracking the Rothschild edifice. Power to the people!
  • by high_rolla (1068540) on Monday June 09, 2014 @10:57PM (#47200259) Homepage

    And then imagine if he used that $8000 to buy a computer and an internet connection and downloaded a few pirated songs doing literally $trillions in damage.

    My estimates are that he could easily have downloaded enough pirated content with that much internet to cause enough damage to bankrupt the entire world.

  • by Anonymous Coward

    Supercomputers are so last year. Do you even ASIC, bro?

  • by Orp (6583)

    I do most of my research on supercomputers. "Servcie Units" (SU's) are the currency on these machines. They are usually either node hours or core hours. Typical allocations are in the hundreds of thousands to millions of SUs.

    I don't know what formula they used to come up with a dollar value. It would be nice to know, however, as I am in academia where real dollar grants get all the attention since they come with that sweet overhead. I'm sure my dean would appreciate the symbolism of getting the college over

  • There must have been a ton of the that going on, but I suppose it was only management doing it so that is OK
  • The abuse of the supercomputer is an extreme case. But there are other less clear-cut areas. For instance:

    - What if I bring my own computer to the university and use their electricity to generate bitcoins?
    - What if I bring university-owned equipment (that I have control over) home and use it to mine bitcoins on my electricity?

    In either case, something that doesn’t really belong to me (even if I’m in charge of it and have the right to relocate) is being used for profit in a way that is (a) most

    • by dbIII (701233)
      In both cases you are not hogging a scarce resource of others for your own profit so I don't see how it can be compared at all.
      • by Theovon (109752)

        They can be compared in that there are ethical considerations in both cases. As I said, abusing the supercomputer is a much more extreme case. In many ways, my examples are victimless crimes, while the supercomputer case had a far more tangible impact. In a relative moral scale, the supercomuting case was much more severe and would therefore have a more severe penalty. My whole point, I guess, is that even victimless crimes are cases where an ethical person should think twice before taking action.

        I do f

  • It's at the bottom of page 29 of the report (page 30 of the PDF).

    Just FYI

  • by suso (153703) * on Tuesday June 10, 2014 @08:46AM (#47202355) Homepage Journal

    I was actually at one of these supercomputer facilities a day or two after it happened and found out then. Too bad they didn't release more information so I could talk about it. :-( Someone in our group amusingly noted though that it was probably the first time that supercomputers had been used to directly make money. *snicker*

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