'Free' Money: How Students Mine Cryptocurrency in Their Dorm Rooms

Last month, reports surfaced on crypto mining research conducted by tech conglomerate Cisco with the following headline: "College kids are using campus electricity to mine crypto."

"Mining difficulty for a lot of coins is very high right now - which means it costs more for electricity and internet than the profit you can produce from mining those coins. If you don't have to pay for those costs, then you are in a really good spot for making money on the university's dime."

A similar report was conducted earlier in March 2018, when cyber attack monitoring firm Vectra found out that both intentional cryptocurrency mining and cryptojacking was becoming more prevalent on college campuses than in any other industry.

"I suspect the vast majority of mining from college campuses isn't from what you would think of as mining 'rigs' - those giant machines with multiple GPUs , purpose built for mining. ASICs are also certainly going to be extremely rare simply because they're so loud and hot that no one is going to tolerate them in their dorm room for very long. The student is going to need to explain that, and he's not going to get away with it for long."

Once Ken had managed to mine "a couple of hundred dollars," NiceHash was hacked, and the student lost a large percentage of his funds, as he hadn't yet moved them to a private wallet.

Chris Partridge is a computing security graduate from the Rochester Institute of Technology, who also mined cryptocurrency during his time in college, starting in 2015 and continuing until mid-2016.

"Given that electricity is usually included in a student's tuition or rent, Universities would need to set policy as to whether they will allow cryptocurrency mining on campus premises or not or whether students should be charged extra for electrical expenses relating to cryptocurrency mining. If Universities do not set proper policy in this regard, they could subject themselves to tax problems. Because section 4, Q&A-8 of Notice 2014-21 states that cryptocurrency mining which is treated as a service activity should be treated as ordinary income in the year it is mined, and the expenses of mining - including electrical charges - deducted as incurred based on the matching of income and expenses."

Streng, the Genesis Mining CEO, believes that, while students can contribute to the decentralized network via mining, they shouldn't exploit the resources of their universities and inform the local administration, if possible.

If universities continue to largely overlook mining on their premises, the phenomenon is likely to stay, allowing students to at least earn some beer money.

"Even though they're dealing with small amounts on an individual basis, dorm room mining is introducing cryptocurrencies to a whole generation of young adults. It doesn't take them long to figure out how easy and useful it is to use something like Ethereum to split the cost of a 12 pack of natty ice - particularly when there's no credit card statement their parents can keep an eye on."