NiceHash

NiceHash is a Slovenian cryptocurrency hash power broker with integrated marketplace that connects sellers of hashing power (miners) with buyers of hashing power using the sharing economy approach. The company was founded by Marko Kobal and Matjaž Škorjanc in 2014. USD$64 million were stolen from the company's customers in December 2017.[2][3] In the aftermath the company decided to return the stolen funds through the Repayment program. 82% of the old funds was already reimbursed by January 2020. Their headquarters are based in Ljubljana, Slovenia.[4][5]

NiceHash
Type of businessPrivate
Type of site
Marketplace
Headquarters
Ljubljana, Slovenia
Area servedWorldwide
IndustryInternet
ServicesCryptocurrency
URLwww.nicehash.com
Alexa rank 2,349 (Global, May 2018)[1]
RegistrationOptional
Launched2014 (2014)
Current statusOnline

Buyers rent computing (hashing) power through NiceHash's online platform. Sellers provide hashing power by connecting to the NiceHash marketplace with NiceHash's own mining software.

Business model

Hashing power buyers

Buyers select the crypto-currency that they want to mine, a pool on which they want to mine, set the price that they are willing to pay for it, and place the order. Once the order is fulfilled by miners who are running NiceHash Miner on their machines, buyer gets the crypto-currency from the pool. This means that buyers aren't required to run complex mining operations themselves, and there is no capital investment in mining hardware required.

Hashing power sellers (miners)

Sellers or miners have to run NiceHash Miner software and connect their mining hardware or just regular PCs to NiceHash stratum servers[6] and to the buyer's order. Their hashing power is forwarded to the pool that the buyer has chosen for mining. For each valid share they submit, they get paid in bitcoins[7] for the price that is determined by the current weighted average[8] and refreshed each minute. This is all done automatically and the process does not require complex technical skills.

In return for providing this service, NiceHash takes a percentage or a fee from each group (buyers and sellers).[9]

Service disruptions

On December 6, 2017, approximately 4,700 Bitcoins (US$64 million at the time of the hack) were stolen from NiceHash allegedly by a spear phishing attack.[10] Due to the open and transparent nature of the blockchain, the security breach received an influx of attention as the stolen sum and movement of bitcoins were visible to anyone on the internet.[11]

On December 21, 2017, Marko Kobal resigned as the CEO of NiceHash.[12] On that day, the company also re-opened their marketplace after the December 6th hack. NiceHash has decided to reimburse the affected users through the Repayment program. 82% of the old funds were already reimbursed by January 2020.

Controversies

NiceHash's founder Matjaž Škorjanc is a creator of malware Mariposa botnet, which infected over 1 million computers with Butterfly (mariposa in Spanish) Bot. The goal of Butterfly Bot was to install itself on an uninfected PC, monitoring activity for passwords, bank credentials and credit cards. Slovenian police arrested Matjaž on charges of distributing the malware in 2010. Matjaž was found guilty and had served four years and ten months in a Slovenian prison. On June 5, 2019, US law enforcement opened a case in the operations of the Mariposa (Butterfly Bot, BFBOT) malware gang.[13] FBI has moved forward with new charges and arrest warrants against four suspects including Matjaž Škorjanc.[14]

References
  1. "NiceHash.com Site Overview". Alexa Internet. Retrieved 20 May 2018.
  2. Browne, Ryan (7 December 2017). "More than $60 million worth of bitcoin potentially stolen after hack on cryptocurrency site".
  3. Russell, Jon. "Bitcoin mining marketplace NiceHash loses tens of millions of dollars following hack".
  4. "About NiceHash". NiceHash.
  5. Lee, Dave (8 December 2017). "Millions 'stolen' in bitcoin heist" – via www.bbc.com.
  6. "Which Stratum servers are available? - Mining on NiceHash". NiceHash. Retrieved 2017-12-29.
  7. "What is the PPS reward system? - Earnings & Payments on NiceHash". NiceHash. Retrieved 2017-12-29.
  8. "Available algorithms on NiceHash". NiceHash. Retrieved 2017-12-29.
  9. "Fees - Service on NiceHash". NiceHash. Retrieved 2017-12-29.
  10. "Millions May Have Been Stolen in a Bitcoin Marketplace Hacking Heist". Forbes.
  11. "Bitcoin Address 1EnJHhq8Jq8vDuZA5ahVh6H4t6jh1mB4rq". blockchain.info. Retrieved 2017-12-29.
  12. "Marko Kobal Resigns". LinkedIn. 2017-12-21. Retrieved 2017-12-27.
  13. "Four International Hacking Suspects Charged with Racketeering". US Department of Justice. 2019-06-05. Retrieved 2019-06-11.
  14. "Eight years later, the case against the Mariposa malware gang moves forward in the US". ZDNet. 2019-06-11. Retrieved 2019-06-11.
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