Bitcoin miners busted? Police confuse bitcoin power usage for pot farm

Bitcoin, one of the world's newest currencies, is an open source, peer-to-peer currency that does not exist in physical form. It's owned and traded by means of an anonymous P2P network, without any third-party intermediary like a payment processor, without any government issuing or tracking the virtual currency. While there is a limit of only 21 million bitcoins to be generated by the year 2140, bitcoin is "free" to generate and is created by "bitcoin miners."

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I haven't played around with bitcoin, but Launch called bitcoin peer-to-peer currency "the most dangerous project we've ever seen," suggesting it could "topple governments, destabilize economies and create uncontrollable global bazaars for contraband."

According to Big Think, bitcoin will be a bank for Anonymous. "The hacktivists now have a virtual currency that's untraceable, unhackable, and completely Anonymous."

Wired UK tried to explain how bitcoin miners dedicate their CPU/GPU to generate the virtual currency. "It's generated by Bitcoin 'miners' over time by using CPUs and GPUs to solve a cryptographic problem -- hashing some data against a function. If your computer manages to generate a hash that's numerically lower than a defined value, then you shout it out to the rest of the network, and get to pocket the newly-minted Bitcoins, while also signing a series of transactions and making sure they're legitimate."

One of the issues, other than if governments will try to outlaw bitcoin, is the high amount of electricity needed to create a single bitcoin. It might cost more to generate a bitcoin than the actual value a bitcoin is currently traded at. High electricity bills can lead to marijuana busts. And it is this unusual power consumption needed that caught my attention since it appears as a bitcoin miner has been mistaken as a person running a marijuana growing operation.

Blogger Mike Esspe captured an IRC chat that supports the rumor floating around that at least one bitcoin miner has been arrested.

In regards to if being a miner will bring the cops to your doorstep, according to the Bitcoin Miner, the power consumption will be somewhat like the electric usage for "marijuana grow-op." An example was "The Canadian town of Mission, BC has a bylaw that allows the town's Public Safety Inspection Team to search people's homes for grow ops if they are using more than 93 kWh of electricity per day." There have allegedly been reports floating in IRC of two different cases of police showing up at a bitcoin miner's residence with a search warrant.

Will it become more common to confuse bitcoin miners with weed-growing operations? It is somewhat common for police to monitor unusually high power consumption if a person is a "suspect." For example, as NetworkWorld noted, Ohio police and the DEA file at least 60 subpoenas each month for energy-use records of people suspected of running an indoor pot growing operation. If a stakeout does not uncover anything illegal or point to a "grow house," then utility consumption records can be sought. DEA Agent Anthony Marotta said high electricity usage does not always mean the residence is an indoor pot farm and has surprised federal agents. "We thought it was a major grow operation ... but this guy had some kind of business involving computers. I don't know how many computer servers we found in his home."

It is unclear at this point if more bitcoin miners will have police show up with a warrant on their doorstep after more false positives, mistaking the power consumption to create virtual P2P currency as electricity usage needed to grow weed.

The video below helps explain more about what bitcoin really is.

To download or learn more, visit bitcoin.org or weusecoins.

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