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North Korea Commences Large Scale Bitcoin Mining Operation


Jul 28, 2017 Posted /  2649 Views


North Korea Commences Large Scale Bitcoin Mining Operation

North Korea Commences Large Scale Bitcoin Mining Operation

Information recently surfaced that someone in North Korea has started mining bitcoin (BTC). According to Recorded Future, a threat intelligence company, on 17th May North Korea initiated a rather large mining operations. Prior to this date, there was minimal bitcoin (BTC) node activity in the North Korea.

As most of us still don’t know about the bitcoin and its mining, so first of all let’s start from the scratch.

What Is Bitcoin and its Mining?

Bitcoin is a cryptocurrency and a digital payment system invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. It was released as open-source software in 2009

The system is peer-to-peer and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency.

Besides being created as a reward for mining, bitcoin can be exchanged for other currencies, products, and services in legal or black markets

As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

Mining

Mining is a record-keeping service. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Each block contains a cryptographic hash of the previous block, using the SHA-256 hashing algorithm, which links it to the previous block, thus giving the blockchain its name.

Got confused. Here you have.

A cryptographic hash function is a special class of hash function that has certain properties which make it suitable for use in cryptography (the practice and study of techniques for secure communication in the presence of third parties). It is a mathematical algorithm that maps data of arbitrary size to a bit string of a fixed size (a hash function) which is designed to also be a one-way function, that is, a function which is infeasible to invert.

SHA-2 (Secure Hash Algorithm 2) is a set of cryptographic hash functions designed by the United States National Security Agency (NSA). Cryptographic hash functions are mathematical operations run on digital data; by comparing the computed "hash" (the output from execution of the algorithm) to a known and expected hash value, a person can determine the data's integrity. For example, computing the hash of a downloaded file and comparing the result to a previously published hash result can show whether the download has been modified or tampered with. A key aspect of cryptographic hash functions is their collision resistance: nobody should be able to find two different input values that result in the same hash output.

Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins.

This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.

What is Proof of Work?

A proof of work is a piece of data which was difficult (costly, time-consuming) to produce so as to satisfy certain requirements. It must be trivial to check whether data satisfies said requirements.

Producing a proof of work can be a random process with low probability, so that a lot of trial and error is required on average before a valid proof of work is generated. Bitcoin uses the Hashcash proof of work.

Now question arises who is running Bitcoin mining in North Korea.

There is still speculation about who is running the operation, but Recorded Future suggests that it is probably government. The website clarified:

“It is not clear who is running the North Korean Bitcoin mining operations; given the relatively small number of computers in North Korea coupled with the limited IP space, it is not likely this computationally intensive activity is occurring outside of state control”

Furthermore, even accessing an Internet connection for common people in North Korea is nigh impossible. The government does not provide access to the worldwide web to many people, unless those individuals are high ranking military or government officials. Most people can only sometimes access the country’s internal intranet, which only has a handful of basic websites. This is another point if why it is probable that State actors in North Korea are running the operation. At this point, no one knows for certain.


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