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Free bitcoin mining apps are possible scams, experts warn – The Straits Times

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SINGAPORE – Riding the wave of interest in cryptocurrency mining are mobile games claiming to allow players to mine for bitcoins.
These games, hosted on chat app Telegram, and publicised through online forums and marketplaces, promise money to players through bitcoin mining done for free using their smartphones.
However, cryptocurrency experts warn that these games might be a scam and caution against getting involved in them.
Bitcoin mining is done by creating new bitcoins through computing or processing work in the system, said Associate Professor Robert Kimmel, head of the Department of Finance at the National University of Singapore Business School.
“Bitcoin miners get a financial incentive, sort of like payment for a transaction at the bank, and this encourages people to keep the blockchain and database up to date,” said Prof Kimmel, casting doubts that a smartphone had adequate processing power to mine bitcoin.
A blockchain is a decentralised and distributed digital ledger that records cryptocurrency transactions across networks.
Mr Billy Chiam, 37, who owns a firm that sells cryptocurrency mining rigs, said that from the looks of such games, it does not look like any bitcoin mining is taking place.
“For one thing, there’s no indication of the hash rate. Also, to mine bitcoin, you would typically need to invest thousands to build a GPU (graphics processing unit) rig because mining takes a great deal of processing power,” said Mr Chiam.
A mining rig is a computer system used for mining cryptocurrencies and is usually made up of multiple GPUs. The hash rate is the speed at which mining takes place.
Advertisements promoting these mobile games that claim to facilitate bitcoin mining have been popping up online.
There have been at least three of such games seen on local forums.Players start out with a number of points to purchase elements in the game and these accumulate over time.
When enough points are accumulated, players can buy more elements or cash out for bitcoins.
While joining the game does not require payment, some players said they were unable to cash out their bitcoins unless they made an investment in the game.
A reason these games are gaining popularity on local and international forums might be that players can earn points in the game through referrals, said experts.
Mr Lee Jia Hao, 22, who recently completed his national service, started playing one of the games a week ago after learning about them on a cryptocurrency forum.
“Some people claim it works and others say it doesn’t. But there’s no harm trying,” said Mr Lee, who has also tried other online games that reward users with free bitcoins and has successfully cashed out.
However, he has his suspicions about “referral” games and has seen comments online speculating that they are scams and that they profit from mining personal data or are a platform for money laundering.
“There’s no proof that I will get anything out of it but I feel that I’ve taken precautions to prevent my personal details from being revealed,” said Mr Lee, who said he will wait a few months before attempting to cash out.
However, engineer Mohamad Noh Ahmad Shah, 28, who has played a similar “referral” game, stopped after he realised that he could cash out his bitcoins only if he invested more bitcoins into it.
“I played the game for one to two months. It’s like multi-level marketing because you have to refer people to get more money, so I stopped and uninstalled it.”
Experts The Straits Times spoke to warned against the lure of “easy money” that these games promise.
Co-founder of cryptocurrency community group Singapore Bitcoin Club, Mr Caleb Yap, 44, said that while he has not played such games, he has heard of some that turn out to be Ponzi schemes.
“It’s very unlikely that you can mine bitcoins for free without a rig. The games just want to entice you, get you to invest time in them, and then ask for a fee when it’s time to cash out.”
He added that there might not even be real bitcoins involved.
“With the craze in cryptocurrency right now, everyone wants to ride the wave, even scammers.”
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MCI (P) 031/10/2021, MCI (P) 032/10/2021. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2021 SPH Media Limited. All rights reserved.
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