Tidbit, New Jersey and a Subpoena: When Bitcoin Mining Gets Invasive

Thus far in Bitcoin’s relatively young life, mining techniques have evolved significantly and an industry of accelerating competitiveness has flourished.

Thus far in Bitcoin’s relatively young life, mining techniques have evolved significantly and an industry of accelerating competitiveness has flourished.

The employment of mining equipment first spread from gurus to common folk.

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Mining pools have gained prominence, allowing miners to divide profits as a group rather than luck out as an individual.

Then, as mining became more popular and the management of hardware more challenging, cloud mining came into play allowing practically anyone to mine without their own hardware.

Others set up shop at work, plugging in their graphics cards and granting their employer the honor of paying for electricity costs.

So if computing power is what’s so desperately needed, why not hack into the computers of visitors of your website and borrow some?

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Venturebeat discusses some of the recent happenings. Last year, E-Sports Entertainment (ESEA), a competitive gaming company, planted malicious code in its anti-cheating software. They were then able to monitor 14,000 client computers and hijack computing power to mine bitcoins worth $3750. Following complaints and an investigation, ESEA agreed to a $1 million settlement. Christopher S. Porrino, director of the Division of Law at the New Jersey Attorney General’s office, put it best: “Consumers who subscribed to E-Sports’ video game anti-cheat services paid for protection from cheaters — not to be cheated by the very services they’d purchased.”

More recently, a group of MIT students developed Tidbit as part of the Node Knockout 2013 competition (they got the highest innovation score). The program lets you replace display advertising revenue on your website with bitcoin mining revenue by tapping into your visitors CPU resources.

Before the site was even operational, the New Jersey division of consumer affairs sent a subpoena to one of its developers, Jeremy Rubin. They demanded the immediate submission of all its source code, wallets associated with Tidbit, names and IP addresses of everyone mining bitcoins with Tidbit, etc. Tidbit enlisted the help of of the Electronic Frontier Foundation (EFF), a nonprofit technology law organization. They negotiated a few extensions before turning the tables by filing an official complaint and taking New Jersey to court for the “unconstitutional” subpoena.

The dynamics of the skirmish are interesting: The NJ consumer affairs division has no jurisdiction in Massachusetts; even if they did, they have no legal authority to demand such assets directly; and Tidbit technically still has yet to do anything wrong.

For its part, Tidbit hasn’t exactly attempted to legitimize or otherwise defend its software, focusing more on the fact that they’re college students in a competition and the inconvenience of having to deal with the issue before finals.

One would also expect the next iteration of this saga, either from Tidbit or the next player, would be to garner website user support through consent or even rewards/division of profits.

The hacking operation reportedly yields rewards on the scale of mere cents, which renders the above as irrelevant at least for now. Looking ahead, such a concept can reshape the landscape of internet advertising as it collides with the next iteration of crypto mining.

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