It is important to know that “mining” is the process of putting Bitcoin into circulation. Mining is done by mathematical calculations that are made from computers that are connected to a network.
It is a way for developers to confirm transactions and to increase the security of their wallets. Miners earn the newly created currencies and transaction fees as rewards for their services.
In other words, developers or miners benefit from an income proportional to the number of calculations they have made. However, this becomes a rather hard job since the difficulty of the calculations will continually increase for the same number of Bitcoin created. And thus, the overall power needed for a network will continually increase.
Bitcoin’s mining operations have increased sharply in recent months and all of this computing power draws a lot of energy. This is due to the explosion of the value of Bitcoin. On December 10, 2017, the massive rise in consumption led to power outages in Venezuela.
A lot of Venezuela’s population have recently started mining Bitcoin to improve their incomes. According to an analysis by Digiconomist, the miners of this cryptocurrency alone use a quantity of energy that could supply a whole country like Denmark, Morocco or Serbia.
Bitcoin ecology and Hacking.
Except the ecological issue, the bitcoin’s image has been harm by the Nicehash story.
On Thursday, December 7, 2017, one of Slovenia’s most famous exchange platforms for bitcoin mining was hacked. Apparently, hackers got away with an estimated $62 million from their investor’s wallets. This is the equivalent of roughly 4,700 bitcoins.
The company immediately ceased operations after the hacking had happened. An incident that calls into question the reliability and security of these virtual currencies. Especially since the development of cryptographic money continues and is affecting more and more countries around the world.
Sadly, hacking has become an easy and effective way to make a lot of money in a short time. A situation that does not sit well with users even though most exchange platforms are promising absolute security.
A Security Level That Is Worrying Users
The hacking of NiceHash on Thursday is reminiscent of what happened to MtGox in March of 2014. Indeed, one year after the disappearance of around 650,000 bitcoins in their portfolio, the French platform owned byMark Karpèles, went bankrupt.
And that’s not where these highly motivated attacks stopped. They also attacked Bitfinex last year in a raid that saw nearly $65 million in losses. Now, history is repeating itself again.
In addition, the value of Bitcoins has been soaring for some weeks now. Last Thursday afternoon, the value of one unit was close to $17,000. This is 16 times its price from what it was at the beginning of the year. Dangerous conditions that continue to whet the appetite of criminals.