Hackers cannot make money from stealing computers to mine, so the black market code merchant Coinhive is forced to close down

|Author: BlockBeats 0x29

You may think that EOS hackers can make a lot of money by attacking DAPP contracts every day, but in fact, not all blockchain underground hackers have a good life. Data shows that hackers can no longer make money by stealing other people's computers to mine.

At the end of last month, Coinhive, the world's largest browser mining code provider, published an official blog, announcing the closure of its business, with March 8 being the last day. How did the web mining black market business, which once generated hundreds of millions of dollars in value a year, fall to such a tragic state today?

Coinhive's business is actually very easy to understand. It is to implant a string of code on the web page. When the user clicks on the web page to browse, the browser will execute this code and start to consume the computer's computing power to mine Monero XMR. This is an anonymous cryptocurrency, mainly used for anonymous payments, and is deeply loved by hackers. The Wall Street Journal once conducted an investigation and found that most cryptocurrency theft activities will eventually be transferred to Monero, making it impossible for investigators to find the flow of coins.

In Coinhive's blog post, two points were pointed out as the hardest hit to their business. One was the decline in mining efficiency caused by the last Monero fork; the other was the overall sluggish cryptocurrency industry, with the price of Monero falling by 85%.

The news that Monero announced its fork on March 9 was the last straw that broke the camel's back. This would cause Coinhive's business to be completely cut off, so they decided to quit.

Good news for web developers

The algorithm of Monero is cryptonight-v7, which is a very CPU-friendly algorithm. Compared with Bitcoin, which is almost impossible to mine using the CPU, the mining threshold of Monero is much lower.

In addition, the cryptocurrency industry reached its peak in 2017, and Bitcoin continued to rise, driving up other altcoins. Monero rose to a high of $533 per coin, which made some teams see business opportunities, such as Coinhive.

Taking advantage of the low threshold for mining Monero, Coinhive wrote a code in JavaScript. As long as this code is placed in the web page code, when the user clicks on the web page to browse, the web developer can use the user's electronic device to mine Monero.

Soon, web developers found this to be a great alternative to advertising revenue. Advertising is the main source of income for websites. If advertising revenue is poor, website operation will be difficult. With the rise of cryptocurrency, mining traffic has become a revenue model to replace advertising. BlockBeats has counted that more than 30,000 websites on the Internet have used this embedded code mining method.

This method of embedding mining code in web page code is legal, provided that web page developers inform users that their devices are being used for mining. However, most web pages do not tell users, because the cost of CPU mining is the performance of the device, which reduces the speed of the user's computer and increases the sound. Using this method without the user's knowledge is illegal.

But in order to make money, Coinhive's mining code is still favored by many websites. Even the world's largest BT download website "The Pirate Bay" was found to use Coinhive's code to force users to passively mine, and the Pirate Bay only wrote in the most inconspicuous place at the bottom of the webpage, "As long as you enter the Pirate Bay website, you agree that we use your CPU to mine Monero. If you disagree, you can leave immediately or install an adblocker." BlockBeats has counted that 30,000 websites on the entire network have used code mining as a means of revenue.

According to the revenue forecasts of some code providers, some websites with low traffic have 20 to 30 visitors a day and can mine 0.3 Monero coins a day. Based on the highest market value of Monero, they can earn $160 a day, which is about RMB 1,070. For websites like The Pirate Bay with huge traffic, countless people around the world go there every day to watch the latest movie resources, and they can earn at least several thousand dollars a day.

Although Coinhive will take a 30% commission, for the website, the other 70% can be considered free money, so why not do it?

Hackers' favorite

Coinhive's code is not only provided to web developers, but also hackers. In the past, hackers attacked computers and collected Bitcoin as ransom, but this method was too high-profile and would cost a lot to avoid transaction tracking. Using users' various electronic devices to mine for them has become a perfect alternative.

In the fourth quarter of 2017, an organization called the Cyber ​​Threat Association brought together a number of cybersecurity experts to monitor these illegal activities, including experts from the well-known cybersecurity software company McAfee. Their research found that in 2017, this type of network hijacking and mining attacks increased, and in 2018, they began to explode.

Using browsers to mine is one of the representative forms of network hijacking, and 75% of browser mining uses Coinhive code, which has established Coinhive's position as the industry leader.

For example, a few days after the college entrance examination last year, the websites of many universities were reported to have been hacked. When the candidates were checking their test scores, the hackers used the students' computers to mine.

Because score checking websites have a time when scores are released, a large number of candidates will open their web pages to wait for the results to be released, so these websites are more popular than other websites such as blogs. The official websites of many key universities in Shandong, Hubei, Henan, Heilongjiang and other places have been detected to have been implanted with mining codes.

With the support of both website developers and hackers, Coinhive's revenue is also amazing. According to PC Magazine's prediction, CoinHive's commission income can reach 5 million US dollars a year, and the websites and hackers they serve can generate up to 100 million RMB a year.

The decline of Coinhive

Just like Bitcoin mining machines, once the price of Bitcoin plummets, it is difficult to sell the mining machines. Along with the price of Bitcoin, almost all altcoins, including Monero, have fallen by almost 80%-90%. The lowest price of Monero is only $43, which is 90% lower than the highest point of $533.

Figure 1: The relationship between the proportion of cryptojacking (grey) and the price of Bitcoin (yellow) since January 2018

The Cyber ​​Threat Association compared the changes in Bitcoin prices with the frequency of cryptojacking and mining, and found that the two were positively correlated, that is, the lower the Bitcoin price, the fewer cryptojacking and mining incidents occurred. This environment has led to a decrease in Coinhive's customers.

Monero announced that it would conduct a hard fork and algorithm upgrade on March 9. All previous codes of Coinhive can no longer be used. If it wants to continue its business, it must rewrite new codes. With fewer and fewer customers and revenue, Coinhive may no longer be able to bear the cost of the new code.

The project owner has run away, mining machine companies have laid off employees, the media has transformed, and now hackers even find it unprofitable to use other people’s computers to mine. Will there be new vitality in the cryptocurrency industry?