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Sinkhole Sucks Brains From Wasteful Bitcoin Mining Botnet
judgecorp writes "A sinkhole has taken a quarter of the bots out of the ZeroAcess botnet which was making money for its operators through click fraud and Bitcoin mining. This particular Bitcoin mining operation was only profitable through the use of stolen electricity — according to Symantec, which operated the sinkhole, ZeroAccess was using $561,000 of electricity a day on infected PCs, to generate about $2000 worth of Bitcoin."
I'm probably being naive here, but without the ability to issue new bitcoins isn't the currency doomed?
If all of the bitcoins have been mined then surely either the currency will collapse, or inflation will be rampant. If inflation is rampant then people will just hoard the coins and the currency will collapse. Also I'm guessing bitcoins will be 'lost' in the same way that gold or paper notes are lost, so long term without the ability to mine new coins the total number is gonna go down.
I might be missing something but I have a feeling that a proper currency probably needs new money. A proper useful currency anyway.
A few months ago I mentioned that botnets would be used for bitcoin mining and everybody was all over me saying it could never work because people would be suspicious of their machines running at 100% all day and start running scans. Yet here we are...
No, no-one except for a troll was all over you, to everyone else that was obvious and they didn't care about your post.
This is a good illustration about how wealth transfer works, though. Each economic activity has a cost. Economic activities which are rent-seeking--which draw increased revenue without increasing actual value--are damaging in this way. Economic waste is also damaging in this way.
This is why, for example, overpricing the market by artificially limiting supply (labor i.e. electricians and plumbers, goods i.e. diamonds, etc.) makes some people rich but has a disproportionate cost--the profiteers gain $100,000, but the net economic impact is $150,000 or so, and so the economy is $50,000 less wealthy but these folks don't care because they're $100,000 more wealthy and fuck everyone else.
This is also how churn of goods works. Tearing down a bridge that needs $1M of work to remain viable for 10 years to instead rebuild a $100M bridge in its place doesn't make the economy stronger; it temporarily creates jobs at the expense of whoever's paying for the bridge (usually taxpayers), who end up poorer, thus don't spend as much in their local economy or in the wider (national, global) market, weakening the economy overall by reducing its ability to respond to new opportunities and instead diverting money to bridge builders.
Also like the bridge, buying a new iPhone every 3 months--a more personal decision, but one with the same impact, and one that's not "DEH GUBERMENT SHUDNT BE SO SOZIALIST!" Yes, we can have that same socialist wealth destruction in a completely capitalist free market by people being idiots. On the other hand, handing down that iPhone to someone who has less money and will get it free or at a discount will keep the wealth in society. That's why I encourage people to donate their old goods to i.e. Good Will or such, rather than trashing them. Those things still useful retain value, and passing them on at steep discount to those who cannot afford such goods will enrich society by retaining wealth that would otherwise be lost to landfilling or re-processing (recycling, etc., investing more labor) perfectly useful goods.
In this case, a lot of folks are poorer and a lot of resources are wasted; but power companies are a good deal richer, and the botnet operators have more money. Society is poorer, a few players are richer. The botnet operators are as a small boy who walks through the town periodically breaking random windows so that the glazier can retain his job... and he's coming to break your window, at $50 a pane to replace.
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