Statement Over-Electricity Due to Cryptocurrency Mining Operations

We would like to address an article, The Star dated 7th March 2019 where shop owners were slapped with high electricity due to cryptocurrency mining operations, recently.

Concerning about cryptocurrency mining, we think there is a misunderstanding among the public on cryptocurrency mining that we at ACCESS should make it more clear. In a nutshell, cryptocurrency mining or crypto mining is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain ledger. The mining process involves competing with other crypto miners to solve complicated mathematical problems that are associated with a block containing transaction data and the first crypto miner to crack the code is rewarded accordingly. In order to be competitive with other crypto miners, a miner needs an enormous amount of specialized hardware such as ASICs (Application-Specific Integrated Circuit) and GPUs (Graphical Processing Unit) depending on the type of cryptocurrency they are mining.

Cryptocurrency mining is not just a way of making money. Crypto miners have an important role in blockchain networks. Besides solving the mathematical problem as mentioned above, they protect blockchains from block fraud, hacker attacks and ensure the network’s decentralization.

While cryptocurrency mining is real, it takes substantial resources to run mining operations such as computer equipment, electricity, rent, internet and labour. With ongoing crypto winter, miners throughout global experiencing difficult times which affects the profitability of their operations.  For instance, the cost of mining a bitcoin (BTC) can range as low as low US$2,500 and as high as  US$13,000 with current BTC price averaging about US$3,800. The main cost of mining cryptocurrency is the cost of electricity and the price vary wildly across the world. As far as Malaysia is concerned, the cost of mining a BTC is approximately US$4,000 using latest BITMAIN Antminer S15 as opposed to US$7,500 using BITMAIN Antminer S9.

To cope with high operation cost, few irresponsible miners tamper with electricity meter so that they are charged less. For some, they even steal electricity. Though cryptocurrency mining is not an illegal activity, tampering and stealing electricity is a crime. We at ACCESS do not condone such activities.

As for the property owners, please do your due diligence before renting out your property. Do request for more detailed information on their business operations especially when it is computer related such as computer storage purposes and server/hosting services.  And for the tenant, please have them apply electricity in their own name instead.

Sincerely,

Mining & Node Operations

Sub-Committee of Access Blockchain Association (Malaysia)