Mining bitcoins is a notoriously electricity-intensive process better suited for areas where resources are subsidized by the government (like the mountainous Northern China, where a cluster of some of the world’s largest mining pools are located), or are at least exceedingly cheap. Cities like New York, are, of course, not ideally suited for the task of mining. But then again, if you’re not paying for the electricity, then it may as well be free, right?
NYC Department of Education headquarters
That, essentially, was New York City teacher Vladimir Ilyayev’s plan when he started mining bitcoin on his work computer, running the software during the evening while monitoring it from home, according to CoinDesk, which discovered paperwork relating to Ilyayev's hearing before the BOE's Conflicts of Interest Board.
“According to a recently published disposition from the City of New York Conflicts of Interest Board, department employee Vladimir Ilyayev admitted to mining bitcoin between for a period of several weeks between March and April 2014. Bitcoin mining is an energy intensive process by which new transactions are added to the blockchain, generating new coins with every block that is created.”
In the disposition, Ilyayev admits that “beginning on March 9, 2014, at times when I was required to perform work for DOE, I made several attempts to install bitcoin mining software on my DOE computer without DOE authorization. After being thwarted five or six times by DOE’s security software, I circumvented the DOE security software and successfully installed bitcoin software on my DOE computer.”
Ilyayev succeeded in concealing his scheme for barely a month; the software was quickly discovered by BOE employees and disabled.
“I ran bitcoin mining software from my DOE computer from 6 p.m. until 6 a.m. every night from March 19, 2014 until April 17, 2014, when my bitcoin mining software was shut down by DOE’s Division of Instructional and Information Technology. During that time, I monitored the progress of my bitcoin mining software from my home computer using remote access software.”
The conflicts board sanctioned Ilyayev for violating city statutes relating to using city time and resources for financial gain. Still, once his $611 restitution was paid, Ilyayev likely pocketed at least a few hundred dollars, maybe more.
Unsurprisingly, public records show that Ilyayev isn’t the first BOE employee to try and mine bitcoin using city resources, as Coin Desk pointed out.
“Public records indicate that Ilyayev's case isn't the first time that a New York Department of Education employee was investigated for using their work equipment to mine bitcoins.
According to a Conflicts of Interest Board letter from April 2015, a network engineer reportedly tried to run mining software on his Department of Education computer. However, the engineer was ultimately cleared as "there is no evidence that [he] successfully obtained bitcoin."
In January, an employee of the Federal Reserve Board of Directors was fined $5,000 and placed on probation after he was caught mining bitcoins on a server owned by the US central bank.”
You can read Ilyayev’s disposition below: