by Tao Jun, Tai Bao
HANOI, May 14 (Xinhua) -- Pham Cuong works as a professional interpreter who often travels around Vietnam and abroad. The 60 computers in his room in Vietnam's northern Thai Nguyen province run around the clock all year.
His 30-square meter room has nothing but 10 racks of application-specific integrated circuit (ASIC) devices, each of which has six VGA cards. In other words, the 10 racks, or the 10 rigs, are equivalent to 60 computers which are designed for only one purpose, mining cryptocurrency.
"I bought the first 'plowing buffalo' (Vietnamese slang for ASIC device or rig) at a cost of 50 million Vietnamese dong (2,200 U.S. dollars) early last year, and I added nine plowing buffalos' later," Cuong, the 36-year-old chubby interpreter, told Xinhua.
His first "plowing buffalo" was installed with a Bitcoin mining tool, but it and nine others were later installed with Ethereum mining program.
"Mining Bitcoin used to be very lucrative, but more and more people are becoming Bitcoin miners, while there will only ever be 21 million Bitcoins in the world, so I have opted for another cryptocurrency, Ethereum," Cuong explained, noting that the price of Bitcoin in December 2017 surged to nearly 20,000 U.S. dollars, but now stands at around 9,000 U.S. dollars.
According to the Vietnamese man, there are fewer Ethereum miners than Bitcoin ones, so it is easier to mine Ethereum and trade this cryptocurrency.
"One Ethereum is now worth 700-750 U.S. dollars, and my 10 plowing buffalos' generate 5 Ethereum every month. However, I have to pay a monthly electricity bill of 17 million Vietnamese dong (nearly 750 U.S. dollars), excluding electricity bills for industrial fans (to keep the computers from not overheating), and costs for device maintenance and repair," Cuong said.
It seems to be very easy for Cuong to make money, because his computers operate all day and night with little attention and net him a relatively regular amount of cryptocurrency every month.
But in fact, he faces a lot of risks. "More people jumping in on mining the fixed amount of cryptocurrencies means the amount of cryptocurrencies I can mine become smaller and smaller. And when the cryptocurrencies flow to my electronic wallets, it does not necessarily mean that I have the real money. I have to sell them on virtual trading floors like stock markets, and like stock markets, prices of cryptocurrencies often rise or fall unexpectedly," Cuong noted.
He said he often trades cryptocurrencies on Remitano, a peer-to-peer cryptocurrency exchange developed by a firm registered in the Seychelles. "Remitano website has a Vietnamese version, and I see that it also has Chinese, Japanese, Russian versions and some other languages," he noted.
In Vietnam, mining and trading cryptocurrencies are now not as effervescent as it used to be late last year, but it has still caused some headaches for both miners, traders and authorities and even for ordinary computer users.
In March, 139,000 computers in Vietnam were infected by a cryptocurrency-mining virus, according to a Vietnamese leading online security firm BKAV Technology Group. Spread through online platforms, the virus took control of victims' computers to mine cryptocurrencies without their knowledge.
Cryptocurrency mining by spreading malware like Digmine through Facebook accounts, emails, operating systems' security holes, and USB drives, will increase in the coming times, BKAV predicted.
"The enormous profit from cryptocurrencies is the reason for hackers to circulate the coin-miner virus. The situation will worsen in the coming time," said Ngo Tuan Anh, deputy chairman in charge of security at BKAV Technology Group.
More dangerously, all the mining and trading of cryptocurrencies are conducted through programs and platforms based outside, so some foreign firms have colluded with certain Vietnamese entities or individuals to set up large-scale scams relating to cryptocurrency, especially Initial Coin Offering (ICO).
"In April, many Vietnamese people declared to relevant state agencies and newspapers that two ICOs named iFan and Pincoin, which are operated by foreign companies, had cheated some 32,000 Vietnamese investors out of funds to the tune of some 15,000 billion Vietnamese dong (660.8 million U.S. dollars), an official from the State Bank of Vietnam, the country's central bank, told Xinhua.
That was the biggest cryptocurrency-related scam in Vietnam, the official said, adding that it is, however, very hard to pinpoint the culprits outside the country.
ICO is an unregulated means by which funds are raised for a new cryptocurrency venture. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies.
Regarding the case of iFan, after raising a large amount of money from investors through inflated and deceitful advertisements, the foreign firm said one iFan was worth 5 U.S. dollars, but in fact, the value of one iFan' dropped to 1 U.S. cent.
Eventually, the Vietnamese company which represented the foreign firm locally, closed, so the investors lost not only their hope of earning profits from holding and selling cryptocurrencies, but also their initial investment using real cash.
"Trading cryptocurrencies, and mobilizing funds through ICOs, especially under Ponzi schemes pose big risks to involved organizations and individuals, and may affect the financial market's stability and social order," the state bank's official said, adding that cryptocurrencies can be used for criminal activities such as money laundering, illegal money transfers, tax invasion and swindling, due to their anonymity and decentralization.
For these reasons, last month, Vietnamese Prime Minister Nguyen Xuan Phuc signed a directive calling for stronger measures to rein in cryptocurrencies. Under the directive, credit institutions in Vietnam are not allowed to carry out cryptocurrency-related transactions and must swiftly report any suspicious activities.
Public companies, brokerages, fund management companies and investment funds are banned from any illegal activities related to cryptocurrencies and are required to comply with anti-money laundering rules.
The government leader also urged the authorities concerned to restrict the import of rigs (coin mining hardware) and double down their efforts to prevent fraudulent activities concerning cryptocurrencies.
Meanwhile, the Ministry of Justice has been tasked with perfecting the legal framework on regulating cryptocurrencies and virtual assets.
"Cryptocurrency mining is not banned in Vietnam, but using cryptocurrencies as means of payment is prohibited, so trading them is very risky."
"The riskier cryptocurrency trading is, the less lucrative mining becomes. Therefore, I plan to sell my plowing buffalos' to focus on my professional work," Cuong said, while carrying out his interpretation work at a construction site in Ho Chi Minh City.