North Korea Mining Bitcoin

North Korea has been mining bitcoin since at least May 2017 according to a tech intelligence company called Recorded Future. They say:

“We see an expanded interest in cryptocurrencies by North Korean elites and a continuation of the Bitcoin mining.

While our data does not give us insight into the full scope of North Korea’s Bitcoin activity, we saw a continuation of the mining activity we observed in May from January 24 through the end of this dataset on March 15.

The traffic volume and rate of communication with peers was the same as last summer, but we were still unable to determine hash rate or build.

This mining effort appears small-scale and limited to just a few machines, similar to the activity from last summer.”

According to a recent report by a research unit of South Korea’s state-run Korea Development Bank, North Korea seems interested in the defining “characteristics of cryptocurrencies, including anonymity, difficulties of tracing money and cashability.”

They have apparently mined Monero too, with Recorded Future saying North Korea’s elite is well connected to the internet, reads international papers, is aware of how it is perceived in the west and so on.

“Before [May 17 2017], there had been virtually no activity to Bitcoin-related sites or nodes, or utilizing Bitcoin-specific ports or protocols. Beginning on May 17, that activity increased exponentially, from nothing to hundreds per day,” they say.

The government there might have imported mining gear from China, but mining bitcoin at a scale useful for a government would probably take some significant upfront investment in asics with returns in investment probably not to be seen in a year or two in addition to the ongoing energy costs of mining.

So the South Korean bank says they only mined until July 2017, while Recorded said in April 2018 that “the North’s interest in and exploitation of cryptocurrencies has exploded” since May 2017 and they say it goes up until at least March 2018.

They claim North Korea is behind the hacking of a number of crypto-exchanges, but they do not appear to provide any concrete evidence.

Yet that they are or have tried to mine bitcoin is very probable in our view and since May 2017 sounds about right. Their reason for it might have been to gain some income, but it is more probably they aimed to utilize btc to engage in some international trade amidst very tight sanctions.

They apparently plan to hold a crypto blockchain conference this October, where there will be meetings with some officials there. Almost nothing more is known about this conference, but it does look like crypto has made its way to even one of the most isolated country on earth.

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