NSF suspends researcher mining with supercomputing facilities- was it even worth it?

Bitcoin Magazine has recently reported on an interesting occurrence of unauthorized Bitcoin mining. It was brought to light by the National Science Foundation’s (NSF) Office of Inspector General in its “Semiannual Report to Congress.”

The NSF is a U.S. government agency supporting research in various areas of science and engineering. Its 2014 budget is $7.2 billion and it funds about 25% of federally supported research in U.S. colleges and universities.

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A significant portion of the report offers “tidbits” on various forms of misconduct uncovered through investigations. Examples are plagiarism, fabrication of data, and misappropriation of funds/resources. Names of individuals are not mentioned. The Office managed to recover $1.2 million for the government through its investigations. One NSF employee was found to have used his government purchase card for nearly $95,000 in personal items. He was sentenced to 10 months in prison.

Then there’s a section titled, “Government-wide Suspension Recommended for Researcher Who Used NSF-Funded Supercomputers to Mine Bitcoins”. He “misused over $150,000 in NSF-supported computer usage at two universities to generate bitcoins valued between $8,000 and $10,000.” Bitcoin Magazine assesses that the $150,000 figure likely arises from electricity costs based on known figures for other supercomputers.

Continues the report:

“The researcher asserted that he was conducting tests on the computers, but neither university had authorized him to conduct such tests — both university reports noted that the researcher accessed the computer systems remotely and may have taken steps to conceal his activities, including accessing one supercomputer through a mirror site in Europe.”

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Bitcoin mining activities are described by the report as “computationally intensive.”

The researcher lost all access to supercomputing resources and was suspended “government-wide” by the the NSF.

In February, it was reported by the Harvard Crimson that a Harvard supercomputing research facility was misused to mine dogecoins.

Supercomputers are not efficient miners

Of note is the Magazine’s citing an analysis by Michael B. Taylor, a professor at UCSD. In short, the most efficient miners of Bitcoin are ASIC’s (application specific integrated circuits), which dedicate their entire being to hashing operations. “General-purpose” supercomputers spend vast amounts of energy on other unrelated tasks. The value of whatever coins are mined comes nowhere near the electricity costs. A supercomputer would be worthwhile when dedicated to hashing, but this basically amounts to the Bitcoin network we already have.

The researcher may have been well aware of this fact, but it’s just irrelevant if you’re not paying the electricity bills.

Taylor also noted that the “NSF is generally interested in the advancement of science, which includes cryptocurrencies and many other exciting developments in the scientific world.” One of his papers, “Bitcoin and The Age of Bespoke Silicon”, was partially supported by NSF Awards.