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Gaming company hijacks gamers’ computers to mine Bitcoin

A gaming company has sneaked in Bitcoin-mining code into a software update, and for a time turned its players’ computers into zombie machines, warranting a $1 million settlement in a class action lawsuit.

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Bitcoin is on the rise as a virtual currency, gaining popularity as a decentralized payment system that does not go through regulations. The cryptocurrency is already being used as the preferred payment scheme from some online trading activities, including both legal and illegal ones. To highlight, Bitcion “ATMs” have launched in Canada, while employees at some software companies are already asking to be paid in Bitcoins.

The cryptocurrency derives its value from market forces, meaning supply and demand, as well as sentiment, dictate the value. For instance, good feedback from government regulators in a Senate hearing resulted in Bitcoin peaking at a record $900 before settling down to a reasonable $700 or so. Similarly, the value dropped earlier when the FBI cracked down on online black market Silk Road.

There is another way to derive value through Bitcoin, however, and this is through mining or minting new coins. This is not a task meant for any computing system, though, and chipmakers have even started building motherboards specifically designed for machines meant for mining more of the currency (emphasis on the GPU is placed here, given Bitcoin mining relies more heavily on GPU capability than CPU).

Recently, software development company E-Sports Entertainment Association (ESEA) has been found guilty of inserting code into a software update for its clients that essentially turn gamers’ machines into Bitcoin mining computers. The New Jersey attorney general called the software a “botnet” and said ESEA “illegally hijacked thousands of people’s personal computers without their knowledge or consent.”

What makes it worse in the case of Bitcoin mining is that mining for the virtual currency “had real dollar value” apart from the potential damage to the clients computers. As of the lawsuit, ESEA had successfully mined 30 bitcoins over two weeks, or about $16,000.

ESEA has blamed a rogue employee, saying that the latter had been “acting on his own and without authorization to access our community through our company’s resources.” That particular employee has since been dismissed. However, the class action lawsuit resulted in a settlement of $325,000 upfront, with an additional $675,000 payable in the event that the company is caught misbehaving in the next decade, for a total of $ 1 million — a big price to pay for earning just a few thousand dollars from Bitcoin mining activity.

Source: Wired

J. Angelo Racoma
http://racoma.net
J. Angelo Racoma has written extensively about mobile, social media, enterprise apps and startups. Angelo develops business case studies for Microsoft enterprise applications and services. He is also co-founder at WorkSmartr, a small outsourcing team.

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