Connect with us

Bitcoin

Inside the Hidden World of Egyptian Bitcoin Miners

Published

on

Egyptian Bitcoin Miners

Egypt’s unfavourable regulatory environment has made bitcoin adoption more difficult in the North African country. Nonetheless, Egyptians are secretly buying and selling the digital currency on peer-to-peer exchanges while a hidden network of cryptocurrency miners has emerged to take advantage of cheap energy to stealthily mine bitcoins.

Egypt’s Underground Bitcoin Mining Scene

Globally, people are using their computers to mine bitcoin. However, in Egypt bitcoin miners operate under a veil of secrecy. Bitcoin miners have established an underground network away from the public eye, with only a few even willing to speak to the media.

The bitcoin underground is fuelled by market regulators whose negative stance towards cryptocurrencies has made it difficult for bitcoin traders and miners to go about their activities. The Central Bank of Egypt refuses to accept digital currencies and recognizes only the Egyptian pound as legal tender. While transacting in cryptocurrencies such as bitcoin is not illegal, the authorities are seemingly willing to take action against any bitcoin-related activities within its jurisdictions.

Speaking to Cairo Scene under a pseudonym, Hussein, a bitcoin miner, argues the law is rather ambiguous when it comes to bitcoin and thus most people are concerned about being discovered.

“I believe what I’m doing is legal. When people get arrested for mining it’s usually because they’re caught with black market foreign currency exchange, or they’re forging money and they just happen to have mining rigs or bitcoin on them. The authorities see this and therefore associate cryptocurrency with illegal activity,” he stated.

Therefore, it makes sense that the mining community would adopt a defensive attitude. What is puzzling is bitcoin is not technically off-limits so why go to such great lengths to remain concealed? Hussein explains,

“The recent statements they’ve given say mining is not illegal, but it can get you into trouble for sure. I think the administration is trying to understand cryptocurrency, but they’re still in the process of learning more. I’m 99 percent sure that if they knew more about it, it’d be fully legalized in Egypt…. Legal like in Japan, the US, England, Europe, legal like in most countries.”

How is Bitcoin Mined in Egypt?

Bitcoin mining is the process where miners contribute their computing power to solve complex algorithms to confirm and process transactions on the bitcoin blockchain. For that, they are rewarded with fresh bitcoins. The higher the computing power the larger the reward. This is why mining farms have been created, hosting scores of computers with extra processing power to earn more bitcoins.

Currently, Ethereum is the most frequently mined cryptocurrency in Egypt on account of it being the most profitable mining option and its mining hardware being easily accessible locally. Bitcoin is usually mined through special hardware called ASICs whereas Ethereum is mined through graphics cards (GPUs), which is a standard for gamers and video editors who require heavy processing capabilities.

However, the reality of mining in Egypt is quite different from the usual set up found in other countries. Spread across the busy metropolis of Cairo are multitudes of hidden farms where digital currencies are mined every day. You will discover the people who participate in the mining are not your typical hackers or tech aficionados typing away late into the night.

A perfect example would be Hussein, who is a  former economics student, but decided to try his luck in the male-dominated bitcoin mining scene. A spot check across Egyptian digital currency interest groups on Facebook and Whatsapp also reveal very few women in the bitcoin space.

Having said that, despite the community being composed of different professions such as economists, doctors, entrepreneurs, and coders, they are united by the prospect of cashing in on bitcoin’s volatility, and the process of earning the worlds most valuable cryptocurrency through mining. The question then arises, why Egypt of all places?

Lower Mining costs in the Form of Cheap Electricity

The typical mining setup includes a PC working at all hours converting maths into money. The process requires a lot of energy in order to prevent the hardware from overheating and getting damaged; since the inbuilt PC fans are not enough to handle the heat produced by the constant heavy workload. Therefore, external fans and air conditioning are required to lower the temperatures in mining farms.

Surprisingly, as demanding as it can be to keep things cool in Egypt’s arid environment, the cost of electricity is cheaper compared to other developing economies. This has encouraged the local cryptocurrency mining boom due to the low overheads involved. Hussein points out,

“Until recently, energy was subsidized, and a lot of people don’t even pay for electricity, which is sad. But that’s part of why it’s more profitable to mine in Egypt… Yes, of course, I pay my electricity bill.”

For Mohammed, a Cairo-based Ethereum miner, the mining craze is fueled by more than just cheap electricity. He believes how you pay for the energy plays a significant role in making the endeavour more lucrative. “I think it’s better to mine in Egypt because you pay your energy bills in local currency, but you get your investment back in cryptocurrency.”

He explains that bitcoin, which acts as a digital asset, has retained value more reliably than the inflation-prone Egyptian pound. That combined with the cheap energy has led to some expats to consider moving back to Egypt.

Bassem is an Egyptian who presently resides in Qatar and runs a bitcoin mining farm. He owns a fleet of ASIC machines that are optimised to mine non-stop and churn out bitcoins. He started mining in Doha on account of the free electricity being provided but has now set his sights on returning to Egypt this year. He is not that worried about leaving behind the free energy as he calculates his farm will still make a good profit once he deducts electricity costs.

What are the Benefits of Cryptocurrency Mining in Egypt

For Egyptians, cryptocurrency mining has changed their financial fortunes. A case in point would be Hussein who developed an interest in digital currencies due to his economics background. He learnt about bitcoin through YouTube videos and started mining in 2012. He then quit his job and moved back to Egypt, something that would not have been possible without the income he receives from mining digital currencies.

“[Cryptocurrency mining] has enabled me to take the time to think about my future plans, rather than worry about monthly expenses. Especially in Egypt, by mining, you can make enough money to just live. Depending on market fluctuation, a one-time 50,000 LE investment in equipment can earn the equivalent of about $400 a month.”

Hussein who is also a cryptocurrency trader insists he has made more money on cryptocurrency than investing in real estate. The new coins he earns are converted to fiat currencies by trading them at the exchanges for a profit. But not only are individuals making money out of crypto mining, local hardware dealers are cashing in on the demand for mining hardware. According to Mohammed, hardware importers are not only making good money but a number of them have joined the bandwagon and taken up mining themselves. Hussein had this to add,

“Mining in Egypt is booming, but one issue is the equipment; when the price of Ethereum spiked, demand for GPUs was high and stores couldn’t stock enough of them… Getting GPUs in Egypt is kind of like getting drugs. It’s actually easier to get drugs than to get GPUs sometimes.”

On the debate by some critics from some Muslim countries who claim that cryptocurrencies might be haram if it is viewed as making money out of nothing, Hussein had this to say, “If the monetary system is haram, then sure, bitcoin is haram,” he began. “But in my opinion, it’s not. The trading aspect is definitely not; it’s a mutual agreement, and bitcoin is equal to money, which we already use. And you can actually see a lot of religious people mining bitcoin.”

While bitcoin mining may be unappealing for most due to the high energy requirements and the technological complexity, for Egyptian cryptocurrency miners the process is quite very rewarding.

Mohammed states,

“I believe in the future of cryptocurrency – nobody can refute it. It’s already happening now, some countries are already making bitcoin official. I hope that Egypt uses it eventually. They have to know that people here are using it now, that people believe in it and put their trust in it.”

Source: CairoScene.com

Bitcoin

How Often Is Crypto Really Used In Illegal Activity?

Published

on

Illegal Activity

Statistics, examples, and ways to legally use cryptocurrency

October 1, 2013, was a turbulent day for San Francisco Public Library. A dozen FBI agents pretending to be usual visitors surrounded a man sitting at one of the tables, took his laptop and put a pair of handcuffs on his hands. That man was Ross Ulbricht, founder of Silk Road – the largest darknet marketplace for drug dealers, killers, and other criminals. The seizure of Ulbricht was supposed to tackle the illegal online trade, but, as the news site DeepDotWeb wrote, the bust was “the best advertising the darknet markets could have hoped for”. The reputation of cryptocurrency also suffers from associations with terrorists, who sometimes use it for their needs. How big is the real scale of the problem? And how many legal ways to use crypto exist? ChangeNOW has dived into the topic – and suggests you an overview of the current state of the problem.

Highlights:

  • The drugs trade volume using cryptocurrency is relatively large
  • Crypto was a significant reason why a part of drug sales migrated to the web, though stays yet not viable and anonymous enough for dealers (same as for terrorists)
  • As efficient use of blockchain technology requires good infrastructure, crypto remains not suitable enough for many terrorist groups
  • However, some terrorists are trying to adjust to anonymity threats and hold fundraising in crypto
  • Legal ways to use cryptocurrency include dozens and vary from IT services to car rentals   

Crypto & Drugs & Rock’n’Roll

crypto crime

The total volume of the online drug market using cryptocurrency is around $1 billion. It is located in the darknet, which provides an attractive, profitable, and mostly secure environment for drug dealers. Cryptocurrency, in turn, allows making payments that are hard to be tracked by authorities. This is how blockchain technology has helped to bring a big part of drug sales online from the streets. And it’s not only about drugs themselves – many legal opioid drugs are illegally sold here, too.

However, cryptocurrency is not always as secure and anonymous as it is thought to be. The information about any transaction ever made stays forever in the blockchain, which makes the system way more transparent than cash payments. This is a significant limitation for using crypto in illegal purposes.

According to the University of Technology Sydney, about 46% of criminal activity of each year is connected to Bitcoin. As for the drug sale itself, trade volumes in crypto keep rising, but the percent of Bitcoin drug transactions out of all transactions goes down. This means Bitcoin is more frequently used for legitimate purposes.

What cryptocurrency is used for drug sales most often? Surprisingly, privacy coins such as Monero are used only for 4% of transactions. Due to its pioneer position, Bitcoin is used in 76% of all deals despite all its anonymity risks.

The main problem for drug dealers using crypto is to turn their income into cash. This move remains complicated and insecure. Most cryptocurrency exchanges have instruments to define whether a transaction is coming from a suspicious source like the darknet. The rise of Monero use in the online drug market will hinder such tracking. However, for the reasons listed above, crypto is unlikely to completely replace regular cash in drug sales in the foreseeable future. 

Cryptoterrorism

Cryptoterrorism

The views on how much cryptocurrency is used and will be used by terrorists vary widely. While some claim that terrorists have no infrastructure to use it and the methods are not secure enough, others argue that they are learning fast and adjust to crypto rapidly. Let’s see what both sides say.

Not actively using, unclear future 

Lack of appropriate infrastructure, inability to use crypto. Most terrorist groups settle in the Middle East region, especially on its remote and war-torn territories. The vast majority of roads and technological infrastructure have been destroyed. In such circumstances, cash remains the most common and convenient way to pay and fundraise. Imagine a gun seller in a Syrian village – does it look like he has a tool to accept Monero?

Anonymity threats. Given the relative transparency of blockchain mentioned above, crypto might remain too unsafe for terrorists. Miners can see any potential terrorist money exchange while checking transactions, and it’s not too hard to see who sends them money. It can change with the rising use rate of privacy coins, but the ability to spend such money remains questionable.

Increased attention to crypto by the authorities. As the number of transactions keeps rising, more regulatory bodies’ attention gets focused on cryptocurrency, which apparently makes terrorists nervous and cautious.

Problems of specific currencies. While top cryptocurrencies like Bitcoin receive much regulatory attention, others remain marginal and unreliable because of a lack of support. Conflicts and uncertainty lower the trust to such cryptocurrencies – yes, even terrorists’ trust.

Using actively now, increasingly in the future

Terrorists seem to be rapidly learning to escape from tracking in blockchain. Several years ago it was easy to find any address or transaction made for a terrorists’ fundraiser.  Today they use well organized and finely designed websites, where detailed video tutorials show how to donate money anonymously. Unique Bitcoin addresses and other crypto tricks are used to preserve security. Analysts from intelligence services claim there’s only going to be more such cases. And, of course, privacy coins are a “great opportunity” for terrorists too.

Shift to cryptocurrency is a reaction to economic sanctions. ISIS has lost most of its territory and resources, Hamas has been sanctioned by the West. Having been cut off from all main financial institutes, terrorist groups had to find other pathways for their financial activities – and cryptocurrency appeared to be the best substitute.

There might be difficulties and inconveniences, and the number of terrorists using crypto is yet unknown – but as we can see, digital money in terrorism is reality. Same as in drugs. And this is what cryptocurrency is notorious for, lacking trust among millions of people. The reputation of some of the exchange services only adds to this mistrust – ChangeNOW has carried out a special investigation on how such platforms may cheat their clients. But can you buy anything besides heroin and firearms with your crypto? What about pizza or a concert ticket?

Only Antarctica left

Cryptwerk, a platform monitoring actual use cases of different cryptocurrencies, says there are about 3500 ways to spend Bitcoin and more than 800 for Monero today. They range from music services to car rentals, from buying clothes to hotel booking services, and from sports bets to virtual tours.

Organizations accepting cryptocurrency are located on all continents besides Antarctica (what could be a better place for crypto than a continent without governments and countries though?). Mostly, in the USA and Central Europe. Bitcoin as the largest cryptocurrency is relatively widespread in India and Southeast Asia.

As this is a whole another topic, ChangeNOW will issue a post dedicated to use cases of cryptocurrencies. As it will be more detailed, who knows – maybe you’ll find a pizza right by that you could pay for from your crypto wallet!

This article was contributed by Jeremy from ChangeNow.

Continue Reading

Bitcoin

Buroka Review: How to Buy Bitcoin on Nigeria’s Newest Bitcoin Exchange

Published

on

Buroka Review

Buroka is a new breed of cryptocurrency exchange for Africa! Currently operating in Nigeria, Buroka was designed to fulfill the needs of modern Africans. Buroka allows customers to buy and sell Bitcoin with Naira via Local Transfers and cash deposits at the bank.

In this Buroka review, you will learn more about the exchange and how you can use it to buy bitcoin in Nigeria.

How to Buy Bitcoin on Buroka

Step 1: Account Creation

To create an account, visit Buroka.com and hit the “Register” button. This will lead you to a page where you will be asked to fill in your personal information, including your name, email address, and password. Like any other serious exchange, Boruka will ask you for your ID, Proof of Address and to take a selfie with your ID to eliminate fraud.

Step 2: Fund Your Account

Funding your account on the platform is straightforward. You can deposit either via bank transfer or at any bank branch. Make sure to use a unique reference code given to you by Buroka deposit system.

Step 3: Buying and Selling BTC

Once your deposit has been credited to your account you can immediately buy your Bitcoin. The buying and selling tab is located on the top right corner of the dashboard. There you can input the amount of bitcoin you want to buy. Once you do that, you then click on the “BUY BTC” button.

Step 4: Storing Your BTC

After buying BTC, Buroka provides users with the option of either storing bitcoin on the platform in a BitGo wallet or any other wallet of their choice.

Currently, Buroka only supports bitcoin (BTC). However, the exchange plans to include other cryptocurrencies going forward.

Security

Buroka ReviewBuroka exchange makes use of Two-Factor Authentication (2FA). 2FA provides an extra layer of protection for users. With the 2FA in place, an extra piece of information is needed before login into the platform or making any withdrawals.

In addition, Buroka’s platform is also protected using the latest security technology, including web-socket and API protocols that allow for a fast and secure order processing. Buroka also makes use of a well-updated SSL certificate, which makes it easy to detect a phishing attempt.

To further ensure that clients’ funds are secure, Buroka operates segregated accounts. These accounts are held with trusted banks so that clients can enjoy an extra layer of security provided by the banking system.

Conclusion

Buroka is a relatively new Bitcoin exchange with a well-designed, user-friendly interface. The Bitcoin trading platform provides several deposit options, which is attractive for Nigerian Bitcoin traders, as well as competitive market rates for both buyers and sellers.

If you are looking to buy or sell bitcoin in Nigeria, you can give Buroka a try especially while they are offering a $100 CASHBACK BONUS to anyone who will have bought one full bitcoin with them. 

Continue Reading

Bitcoin

3 Reasons to Use a Bitcoin Mixer in 2020

Published

on

Bitcoin Mixer

Bitcoin is not as anonymous as people think. Bitcoin transactions are viewable on the network’s public blockchain, which also means that transactions can be linked to real-world identities. As a result, bitcoin is not (yet) fungible and does not protect individuals’ financial sovereignty as much as it should. Fortunately, there is something called a bitcoin mixer that enables bitcoin users to increase their financial privacy.

In this guide, you will learn what bitcoin mixers are and why you should consider using them.

How Anonymous Are Regular Bitcoin Transactions?

Regular bitcoin transactions are not anonymous. Bitcoin addresses are pseudonymous. They do not reveal your identity as a user but can be linked to your identity.

For instance, most exchanges require you to verify your identity with legal identification (ID) documents. In a situation where you withdraw funds from an exchange into your wallet, your identity can be linked to that wallet, and all your linked transactions could be tracked.

Blockchain analysis companies can use information from your linkable transactions to track how many bitcoins you own, what you spend your coins on, and who you transact with. If you are conscious about your privacy, you might need a bitcoin mixer.

What is a Bitcoin Mixer?

Bitcoin mixing service

A bitcoin mixer allows you to mix your coins with other users. This obscures the ties between your personal identity and bitcoin transactions.

The end goal of a bitcoin mixing service is to create a misleading trail of transactions that makes it difficult to track your transactions. This is achieved by breaking down your bitcoin into smaller parts and then mixing them with coins from other transactions.

Most bitcoin mixers are non-custodial, run on the Tor network, and do not keep records of users after a couple of hours.

Why Do People Use Bitcoin Mixers?

The primary reason for using a bitcoin mixer is to increase transactional privacy. You may not want “the whole world” to be able to see what you are doing with your bitcoin. Through the use of a mixing service, you can achieve that despite Bitcoin’s public blockchain.

Moreover, there are a number of other reasons why you should consider using a bitcoin mixer. They include:

Your Transactions Reveal Personal Finance Information

Every time you send bitcoin to or receive bitcoin from an individual, the other party gains some information about your bitcoin holdings.

For example, if you have ten bitcoin in your wallet and you send two to another person. The individual who received the bitcoin now has access to your bitcoin address, which allows them to check your balance on the blockchain.

In some cases, by analyzing your inputs and outputs, they can predict other addresses you own, giving them more information about your finances and transactions you have done in the past. Mixers can prevent this. The mixer breaks the connection between addresses in your wallet by creating transactions that make it difficult for blockchain analysts to track.

Based on the example above, if you use a coin mixing service to send out the coins, the receiver can still check the blockchain to verify the transaction but will be unable to track your old transactions and find your bitcoin address.

Blockchain Analysis Companies Are Watching

Over the years, blockchain analysis companies have been established to track transactions and monitor the Bitcoin blockchain. These groups have resources to probe deeper into transactions, with some going as far as connecting IP addresses to bitcoin transactions.

Further, cryptocurrency exchange verification is required by regulators to keep an eye on how individuals use their bitcoin. This means that exchanges can still trace your transactions after you have purchased bitcoin.

Bitcoin mixers allow you to detach connections between your initial receiving address and other transactions you make. This can prevent companies from gathering data about you, which it would otherwise share with (or sell to) third parties.

To Prevent Censorship

Money has become a tool used to fund political groups and operations. In authoritarian regimes, where the financial system is highly monitored by the ruling government, critics or opposition groups may opt for bitcoin.

To ensure complete privacy while using bitcoin, such groups will require bitcoin mixing platforms. Without increased transaction privacy, these groups risk losing support in situations where the state begins to target individuals funding them by tracking their transactions on the blockchain.

This allows bitcoin to be used as a tool for freedom of speech and expression.

If you want to mix your coins to protect your financial sovereignty as a bitcoin user, check out Bitcoin Mixer.

Continue Reading

Popular Posts