This recently happened to Kirk, but he says he was lucky because the power plant owner likes him. When the government contacted the power plant about suspicious activity, the owner covered for Kirk. After the call, Kirk shut off the mine for a few days, took some extra steps to mask his network traffic, then powered back on.
This kind of IT hygiene is critical to keeping miners off the radar.
Miners conceal their IP address by using a virtual private network, or VPN, to mask their geographic digital footprint. But Beijing is wise to the use of VPNs as a tool to evade government censorship and has cracked down on their use.
Most underground miners are now turning to mining pools as another way to hide their tracks, joining cryptocurrency miners from around the planet to combine their computing power. Even though many mining pools have announced a suspension of services inside China, multiple sources tell CNBC that some foreign pools are still signing up Chinese miners.
“They hide their hashrate,” explained Kirk. Hashrate is an industry term used to describe the collective computing power of all miners in the bitcoin network.
Typically, when a block of transactions is “mined” and added to the digital ledger of transactions known as the blockchain, the pool that won it signs its name to the block. Multiple sources tell CNBC that now, when Chinese miners contribute their computing power to solving a block, pools opt to not sign their name, which is a departure from past protocol.
“A pool doesn’t have to reveal any data,” continued Kirk. “You’re basically telling the world that my revenue is only half of what I actually have. You don’t brag about it.”
This could help to explain why China’s share of the global bitcoin market went to zero practically overnight, since the bitcoin mining index is based upon data voluntarily shared by mining pools.
Though pools are quiet about working with Chinese miners, they have been very helpful to many of these underground operations behind the scenes, according to multiple sources.
“There are some larger pools who still care. They actually provide a lot of technical support to help you, in case your own people don’t have the technical ability to set it up,” Kirk said.
Long tells CNBC that many of these foreign pools provide them with technology that disguises what they’re doing.
“They are encrypting their packets as it leaves the data center, so it just looks like ordinary web traffic,” Long said.
As Kirk describes it, one pool that he works with helped him to set up a server that made his mine look as though it had fewer “connection points.” When one IP address has thousands of connection points, each of which is submitting massive amounts of data, that looks suspicious to authorities, especially in a rural area like Sichuan. But Kirk says that pools help miners get around that.
“After they do their magic, you’re only going to see five machines, which then does not look suspicious, because any household can have that,” Kirk said.
This content was originally published here.
