Cryptojacking is an unlawful method of obtaining cryptocurrency. The offense does not consist of stealing another person’s virtual money. In fact, the targeted individual does not have to own crypto at all for cryptojacking to occur.
Cryptojacking describes the unauthorized use of a person’s computing or processing power to “mine” for cyber money. It is accomplished by infecting the targeted individual’s computer or other Internet-connected devices with malicious software, or malware.
The malware works in the background on the person’s system, solving complex algorithms to facilitate the completion of cryptocurrency transactions. Once the mathematical problem is deciphered, the cryptojacker is rewarded with a certain amount of virtual money.
If you have been accused of an Internet crime, contact Friedman Nemecek Long & Grant, L.L.C., L.L.C. Attorneys at Law at (888) 694-4645. We are experienced in cyber litigation and can fight your charge.
Mining for Cryptocurrency
Before delving into the specifics of cryptojacking and its implications, let’s first discuss how cryptocurrency transactions work. The explanation is essential, as cryptojacking manifested as a way to overcome the resource difficulties arising from completing these transactions.
Cryptocurrency is virtual money existing solely in the digital world. It operates on a decentralized network, meaning a specific authority does not regulate it.
Instead of being processed through a bank or government agency, cryptocurrency transactions go through a blockchain, a ledger of the various exchanges. The details of a specific transaction are permanently recorded in a block. Blocks for subsequent transactions are linked to the initial block, creating a “chain.”
Before a cryptocurrency transaction is completed, it must be verified. The verification process involves solving a complicated mathematical problem. Generally, individuals using specialized hardware ensure that a transaction is legitimate. These individuals are called “miners,” or cryptocurrency miners.
Numerous people might attempt to solve a single crypto transaction algorithm simultaneously. The miner who solves the problem first is rewarded with a predetermined amount of cryptocurrency.
A significant amount of computing and processing power is required to verify the legitimacy of a transaction. The costs of mining cryptocurrencies are often much more than the amount the winning miner receives for solving the algorithm.
And that’s where cryptojacking comes in.
How Cryptojacking Works
Cryptojacking is a way to solve the extremely complicated transaction puzzles without using one’s own resources. It begins with an individual installing malware on a person’s computer or other devices, including laptops, cell phones, and servers.
The individual may use a few methods for getting the cryptojacking software onto a system, such as:
- Sending an email with a link that downloads the software.
- Embedding a website or ad with the software.
- Creating a mobile app that contains the software.
Like traditional forms of malware, once cryptocurrency software is downloaded onto a person’s computer, it runs a script on the device. Unlike traditional malware, it does not disable the system nor damage files or data.
Instead, the cryptomining software runs in the background, unbeknownst to the user. The script allows the user’s system to be used to solve the complex cryptocurrency transaction algorithms discussed earlier. In short, it uses the other person’s processing power to mine crypto, but it’s the individual who installed the mining software who gets the reward after the math problem is solved.
The Impacts of Cryptojacking
Cryptojacking software might be solving algorithms without the user’s knowledge and might not attack the system or files, but it still has several adverse effects.
These include:
- Decreased performance. Because it takes a significant amount of power to mine cryptocurrency, more of the system’s resources are dedicated to that job, leaving little for the tasks the user is actually trying to execute.
- Overheating. Solving algorithms is resource-intensive. Many legitimate cryptominers have computers and systems specifically for cryptomining. The person whose system was cryptojacked likely doesn’t have the necessary computing power. Their computer fans can go into overdrive and eventually fail, preventing it from cooling down.
- Shortened computer lifespan. If the system is constantly mining for crypto, its components could crash long before they normally would.
- Increased electricity costs. Verifying crypto transactions consumes tons of energy, which means higher power bills.
- Increased business costs. A corporation noticing a lag in device or router performance might incur extra expenses to determine the cause.
Is Cryptojacking Illegal?
People might see cryptojacking as merely an annoyance for the person whose system is being used to verify cryptocurrencies. After all, their files haven’t been corrupted, and they’re not expected to pay a ransom for a decryption key.
So, can cryptojacking really be considered illegal?
It can.
Cryptojacking involves using part of someone’s processing power without their knowledge or consent for monetary gain. Under federal laws, this act constitutes fraud, and individuals alleged to engage in cryptojacking may face prosecution.
At the end of last year, two people were indicted on wire fraud charges. They are alleged to have misrepresented themselves to get additional servers incorporated onto a company’s cloud service. The servers were going to be used to mine cryptocurrency.
Wire fraud is punishable by up to 20 years in prison and/or a fine.
Schedule a Consultation with Our Firm
The sophistication of today’s systems makes Internet crimes extremely complex. For help fighting your charge, reach out to Friedman Nemecek Long & Grant, L.L.C., L.L.C. Attorneys at Law. We are well-versed in cyber litigation and are practiced in protecting the rights of the accused.
To speak with a member of our Cleveland team, please contact us at (888) 694-4645.