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Bitcoin mining: China's loss is Malaysia's gain (and TNB's loss) – Digital News Asia

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Bitcoin mining machines meet their end in Miri, Sarawak. The owners of the machines were illegally tapping into the power grid to enjoy free power supply.
A steamroller may be an unusual weapon of choice in the fight against high-tech criminals, but it’s what the police in Miri used recently to destroy 1,069 bitcoin servers valued at US$1.3 million (RM5.4 million). The same fate probably awaits another 44 cryptocurrency mining machines worth US$53,200 (RM225,000) discovered last month in an abandoned shack in an oil plantation on the edge of the town.
Bitcoin mining itself is not illegal, but stealing electricity is. The flattened PCs were assets seized by authorities between February and April this year in raids conducted by the Miri police together with Sarawak Energy Bhd.
Sometimes these operations are discovered in a dramatic fashion, as when an unoccupied shophouse in Miri caught fire last February, and authorities recovered charred remains of cryptocurrency mining servers in the debris.
These enforcement operations hint at the scale of the problem in Malaysia, and it is anticipated to only worsen in the near future, as profits in Bitcoin mining begin to rise again, in part due to crackdowns on Bitcoin miners in mainland China.
According to Tenaga Nasional Berhad (TNB), Malaysia’s largest electricity utility, since 2018 when there were 610 cases, theft of electricity involving Bitcoin mining surged by 300%, to 2,465 cases in 2020. For 2021, TNB has already detected 1,359 cases up to June of this year.
In response to this, TNB with the cooperation of the Energy Commission (EC), the Royal Malaysian Police and local councils have conducted 92 joint raids from January to June 2021.
Bitcoin mining itself is not illegal, but stealing electricity is a criminal offence under the Electricity Supply Act 1990, carrying a penalty of up to RM100,000 and up to ten years in jail if found guilty. In addition, perpetrators can also be charged for theft or mischief under Section 379 and Section 427 of the Penal Code.
[RM1 = US$0.237]
However, the losses are significant. Johor TNB estimates that they have suffered RM90 million worth of losses in 2020 due to bitcoin mining activities. Meanwhile, in March, Melaka policy uncovered a bitcoin currency mining syndicate responsible for RM9 million worth of losses since February 2019.As of July 2021, TNB has filed civil suits against 268 premises involved in power theft, and 142 individuals have been apprehended in the process.
 
China’s loss is Malaysia’s gain
Over the last year, there has been a dramatic rise in the price of Bitcoin, from about US$6,000 in April 2020, to a high of US$63,000 twelve months later. Since then, the price has dropped to US$35,000, credited to a crackdown by authorities on cryptocurrency miners in China.
As China was the biggest crypto miner in the world (accounting for 65% of the Bitcoin hash rate production by some estimates), this crackdown has seen the hash rate drop significantly over the last few weeks, resulting in a slowdown of transactions (the hash rate is a measure of how much work is being done to generate Bitcoin).
But Bitcoin’s algorithm automatically recalibrates the computation power needed to validate its tokens to balance miner productivity. The resulting recalculation has made it 30% less difficult for blocks to be mined, which in turn raised profits for the miners on the network. Effectively, with Chinese miners out of commission, it has made it easier for everybody else to make a slice of the pie.
Not surprising that global demand for specialised computers able to mine the process has surged as people look to cash in. According to Bitmain Technology Holding Company, a China based fabless semiconductor company, the machines take months to reach buyers due to a backlog and cost thousands of US dollars. An order placed today will only be shipped out in Nov.
A high end mining machine with price and waiting period.
Bitcoin mining: China's loss is Malaysia's gain (and TNB's loss)Meanwhile, Malaysians have displayed a very healthy appetite for mining. “We are top 5 according to a Cambridge study for the Bitcoin charts and this does not include the many miners mining other Alt coins as well,” says Harpreet Singh (pic), Blocklime founder and chief executive officer.
He is referring to the study done by the Cambridge Centre for Alternative Finance in the University of Cambridge which in April 2021 estimated Malaysia as the sixth highest country in terms of average of monthly share of total Bitcoin hash rate.
“It’s a little hard to tell how many of them are actually legal, since we don’t have a way of identifying them,” says Harpreet, “(However) illegal mining is very profitable.”
By DNA’s rough calculations, if Malaysia’s share of 3.4% in April still holds true today, Malaysian miners would be generating about US$1 million worth of Bitcoin per day.
He says that criminals will often buy second hand or older mining machines, and mine what they can using those inefficient machines. “Since they are stealing the electricity, after they have covered the cost of the hardware, it’s pure profit.”
“Most perpetrators of these illegal connections usually operate in newly opened commercial or industrial areas or areas that see very few footfall to avoid detection as bitcoin mining equipment can be noisy,” said a TNB source.
Harpreet adds, “They often hire illegal immigrants to take care of these facilities to make it difficult to trace back who the actual mastermind behind it is.”
 
Opportunity for regulation
Although stealing electricity is most definitely a crime, trading in cryptocurrency is regulated by Malaysia’s Securities Commission, and mining cryptocurrency is not illegal. However, Harpreet believes the authorities should take the step up and also regulate mining. “I think we should work towards a win-win situation, by regulating the space and offering incentives to do it legally and safely.”
He suggests that perhaps special economic zones can be set aside for mining, where excess electricity can be offered more cheaply, in combination with renewable energy. Regulation will make it easier to identify the players, and promote knowledge sharing between the parties.
“A healthy crypto mining industry will have spillover effects to the chip and board manufacturing industry, electrical power industry, property industry, cryptocurrency and Blockchain industry,” he adds.
A spokesman from TNB however was less enthusiastic, focusing on the bad players. “The illegal use of such a large amount of electricity to mine cryptocurrency – whether by tempering meter installation or bypassing the meter – could jeopardise the security and reliability of power supply for the public at large.”
Nevertheless, other countries have taken steps to work with miners. For example, Iran issues licenses for cryptocurrency miners and offers cheap electricity, on condition that the cryptocurrency generated is only sold to the central bank. The country originally aimed to raise US$500 million in cryptocurrency this way for the next year, but have recently banned it for four months as the country has been facing major power blackouts.
Malaysia thankfully has no shortage of power but TNB investors will be expecting the utility to do a much better job of clamping down fast on the illegal tapping of its network by the rising crypto miners in Malaysia.
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Aggregate Bitcoin Price Has Increased By $87 Billion In Last Five Months – Bitcoin Magazine

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The realized market capitalization of bitcoin, or aggregate price paid for every coin on the network, increased by $87 billion since last August.
The below is from a recent edition of the Deep Dive, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
In recent weeks, much of our analysis has been focused on the consolidation period currently occurring in the bitcoin market, with a particular focus on realized price as an indicator of lackluster capital flow. As shown by the chart below, the realized market capitalization of bitcoin, which can otherwise be thought of as an aggregate price paid for every coin on the network, has increased by $87 billion since the beginning of August. 
While significant in absolute terms, given that the realized market capitalization of bitcoin was a mere $90 billion at its peak following the 2017 bull market, in relative terms realized cap has not meaningfully increased since early fall of 2021.
A look at the 30-day rate of change of realized price gives additional context to this dynamic. 
To dig deeper into the dynamic of price and realized price, we can examine the Delta Gradient indicator. The metric gauges market momentum relative to capital inflows.
As per Glassnode,
“The momentum of a market can be considered by assessing the rate of change of price, or the verticality over some period. The simplest example is a parabolic advance, whereby the rate of price appreciation increases in magnitude as a result of market momentum.
“The Realized Price reflects the aggregate price at which each coin in the supply last moved. Steeper increases in the Realized Price indicates a true and organic capital inflow is occurring, as every coin that is spent on-chain and sold, has a buyer with fresh capital. The steepness of this curve therefore represents a rational baseline for sustainable value growth.
“The Delta Gradient is calculated as the difference between the gradient of the spot Price, and the gradient of the Realized Price. This metric therefore measures the relative change in momentum between speculative value, and true organic capital inflows.
“Statistical normalization is then applied to bring historical values, and log-scale price changes into a consistent scale.”

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Crypto Podcast: Markets Dip and a Closer Look at the Metaverse – Coindesk

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With crypto markets slightly dipping and a look at why we need rules if we want our virtual worlds to be free and open, CoinDesk’s Markets Daily is back with the latest news roundup.
Adam B. Levine
Adrian Blust
This episode is sponsored by Kava.
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This episode was edited and produced by Adrian Blust.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
@2021 CoinDesk

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Tim Cook said Apple is looking at cryptocurrency – Here’s what the company is likely to do – 9to5Mac

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December 28, 2021
Bradley Chambers
– Dec. 28th 2021 6:00 am PT


A few weeks ago, Apple CEO Tim Cook made headlines when he said he personally owns cryptocurrency while mentioning that Apple is looking at it from a technology perspective, but not from a treasury decision. What will Apple do with Bitcoin and cryptocurrency?

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It’s something we are looking at, it’s not something we have immediate plans to do. I would characterize it as there are things that I would not do like our cash balance. I would not go and invest that in crypto not because I would not invest my own money in crypto, but because I don’t think people buy Apple stock to get exposure to crypto. So if they want to do that, they can, you know, invest directly in crypto through other means. And so I would not do that. I’m not planning to in the immediate future to take crypto for our products. As a mane of tender, but there are other things that we are definitely looking at.
During the interview, Cook revealed that he owns cryptocurrency, saying “it’s reasonable to own it as a part of a diversified portfolio,” while also noting that he’s “not giving anybody investment advice.” However, Cook didn’t mention if he owns Bitcoin or another particular type of cryptocurrency.
Apple has plans for its retail financial arm. Its Apple Pay service allows people to send money in particular jurisdictions over iMessage. It also has its Apple Wallet app and associated Apple Pay services for mobile payments. Apple wants to grow its services business, and siphoning off banking services is an ideal way to do it. What does this have to do with cryptocurrency?
I believe that Apple will build a Bitcoin wallet directly into Apple Wallet shortly while also allowing for a low-cost way to purchase Bitcoin on iPhone.
With Bitcoin wallets – where you maintain full control of your bitcoin and move it off an exchange like Coinbase –you are responsible for securing your wallet with a seed phrase. I personally reccomend using a couple of Trezor, Ledger, or Coldcard hardware wallets with a multisig vault with a company like Unchained Capital to eliminate single points of failure with your Bitcoin wallets. I also recommend using a steel wallet like billfodl or SEEDPLATE for securing your seed phrase in case of hardware failure.
For newcomers to Bitcoin, this whole process might seem overwhelming, which is why I think Apple might approach it in a couple of ways:
If Apple operates as a Bitcoin exchange, they’ll let you buy bitcoin directly in the Apple Wallet app using whatever payment methods you have on file. They’ll allow you to store your holdings in Apple Wallet while Apple itself will retain the keys. It’ll look a lot like what Cash App or Coinbase does, where you can send, receive, and store Bitcoin without needing to store your seed phrase.
If Apple sets up a software wallet directly on iPhone, it’ll likely look similar to BlueWallet, where you take self custody of your Bitcoin with a seed phrase backup. You’ll own the keys to your Bitcoin directly on your iPhone and be responsible for backing up the seed phrase. If Apple goes this route, I suspect they’ll build in an encrypted iCloud backup of your seed phrase that’s tied to multi factor authentication in such a way where only you can decrypt it. It’s not ideal, but it’s better than nothing.
Finally, Strike is a company I could see Apple partnering with for global Apple Pay Cash transactions. Twitter is already working with the company for its tipping service. Strike does a couple of things that could be of interest to Apple:
It accomplishes the global payment system using Bitcoin as the transaction medium. If I want to send someone in another country money, I input dollars, it converts it to Bitcoin and converts it back to local currency when received. It sounds simple, but it’s a pretty revolutionary way to process payments globally for free.
I just published Announcing the Strike API
Today, @Twitter enables free, instant, global payments for their users with their integration of the Strike API.
What the internet did for communication, #Bitcoin + the Lightning Network is doing for money.https://t.co/jHkY6knXkP pic.twitter.com/FXujknG7sM
— Jack Mallers (@jackmallers) September 23, 2021

Ultimately, Bitcoin is becoming a significant force to be reckoned with in our world. With a finite supply, decentralization, and digitization of our financial system, it’s likely to continue to play a significant role as digital gold and global settlement network. Apple doesn’t want to miss a massive shift in technology as it seeks to drive services revenue and become a significant player in the financial services industry.
It’s also possible Apple will use Bitcoin as a transaction layer with its online store when the company is concerned about the stability of the local currency as we saw recently in Turkey.
Bitcoin’s energy usage is a common discussion among its critics. While there is a lot to unpack here, I’ve found the video I’ve embedded below to be a great resource to explain how there’s more to the discussion about Bitcoin and energy usage than most people would lead you to believe.
TL;DW: The Bitcoin network uses less energy than the use of Christmas lights in the US.
What do you think Apple will do with Bitcoin and cryptocurrency? Leave a comment below! Interested in learning how to buy Bitcoin? We’ve put together a detailed guide on the best apps for buying Bitcoin on your iPhone
FTC: We use income earning auto affiliate links. More.
Check out 9to5Mac on YouTube for more Apple news:
Breaking news from Cupertino. We’ll give you the latest from Apple headquarters and decipher fact from fiction from the rumor mill.


Bradley lives in Chattanooga, TN.
Tips, feedback, corrections and questions can be sent to Bradley@9to5mac.com.
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