Criminals are inadvertently demonstrating how cryptocurrency mining can be used for tax collection.
Crooks are literally hijacking computer power and using it mine cryptocurrency. The latest victim of the so-called cryptojackers was Tesla Motors (NASDAQ: TSLA). Cyber pirates used the Startum software to take over Tesla’s Kupernetes administration console on Amazon Web Services (AWS) and used it to mine, CNBC reported.
Tesla is not alone British insurance giant Aviva; and a Dutch company called Gemalto, were hit by the same cyberjackers, the cybersecurity firm Redlock reported. Cyber pirates have also targeted government websites in the UK, Australia, and the USA for mining.
Why Governments will Start Cryptojacking
The biggest users of cryptojacking in the future will be governments because it can be a cheap and efficient means of taxation.
Instead of spending billions on tax collectors, accountants, auditors, etc., all a government would have to do is require every company operating; or person that owns a computer, within its borders to install official cryptojacking software. The software would mine Ethereum (ETH), an ER20 token, or the government’s official cryptocurrency.
Companies and individuals would go along because they would not have to pay taxes. The proceeds of official cryptocurrency mining can be deposited in a sovereign wealth fund to finance basic income or pensions.
Nations with lots of extra electricity might allow the construction of data centers in their countries. The data centers would operate tax-free in exchange for allowing the government to cryptojack them. Governments might also build their own national cryptocurrency mining farms.
A leader here might be Saudi Arabia where the national oil company Aramco is in talks with Alphabet (NASDAQ: GOOGL) to build a giant tech hub, Deadline.com reported. Amazon (NASDAQ: AMZN) has already signed a deal to build three data centers in Saudi Arabia.
Not coincidently, the Saudis want to build two nuclear reactors in their kingdom for power, Bloomberg Politics reported. The reactors can be used to power data centers without generating greenhouse gases, and free up Saudi oil for export. Another use for them would be to power cryptocurrency mining farms
Venezuela claims to have raised $735 million with Cryptocurrency sale
Many nations will undoubtedly look into cryptocurrency mining after Venezuelan President Nicholas Maduro claimed to have raised $735 million; or 4.777 billion yuan, in one day with his Petro altcoin.
Maduro claimed to have raised that much money by selling Petros in a 20 February Tweet, CNBC reported. Each Petro is supposed to be pegged to the price of a barrel of Venezuelan oil. The Petro or El Petro is supposedly backed by five billion barrels of oil in Venezuelan’s Ayacucho block one oil field.
The sale involved 82.4 million Petro tokens, Oilprice.com reported. Since the price of an OPEC basket barrel of oil was $62.81 on 21 February 2018, the sale may have involved 5,175.44 barrels of oil.
It is not clear who bought the Petros, but a strong possibility is China. A nightmare for Maduro would be if Saudi Arabia bought the Petros and simply left his oil in the ground in an attempt to drive up prices.
Note: the Petro is not publicly traded or listed at CoinMarket Cap. Nor does it have anything to do with a cryptocurrency called PetroDollar (XPD). The PetroDollar’s performance should convince investors to stay far away from Maduro’s funny money. The PetroDollar had a Coin Price of 3.4¢, a Market Cap of $2.186 million, and a Market Volume of $83,041 on 23 February 2018.
Will Saudi Arabia Launch an Aramco ICO?
The Oil Price reported that Saudi Arabia wants to raise the price of a barrel of oil to $70. The Saudis want higher oil prices to boost the value of Aramco stock. News reports indicate that the Saudis are planning an Aramco IPO later this year.
One has to wonder if the Saudis might also be planning an initial cryptocurrency offering (ICO) for Aramco as well. A Saudi national cryptocurrency pegged to oil would be a great way to raise money for the Kingdom, and finance modernization. Investors would undoubtedly lap up a Saudi altcoin and make it super valuable.
Crown Prince Mohammed bin Salman wants to build the Kingdom a high-tech economy that is not dependent on oil revenues. Cryptocurrency might be a logical means of achieving that.
A natural use for the proceeds of such an ICO and an Aramco IPO would be to finance a sovereign wealth fund modeled the Government Pension Fund of Norway. That fund was worth more than $1 trillion or the entire national economy of Mexico in September 2017, Forbes contributor Niall McCarthy noted. Using oil and other revenue for such a fund can make Saudi Arabia one of the richest and most powerful countries on Earth.
Cryptocurrency is Far More Disruptive than You Think
Cryptocurrency is far more disruptive than many people think. The vast sums that can be raised through government altcoins and cryptojacking will prompt many governments to jump on the cryptocurrency bandwagon.
We might be at the beginning of the biggest cryptocurrency boom of all, one that has the potential to disrupt the world’s entire economy. The havoc wreaked by the rise of government cryptocurrencies will be immense but the good they can do is also vast.
One potential use of government cryptocurrencies would be to use cryptojacking to finance a basic income for all citizens; which sounds like something the Saudis will do. Other uses would be to finance pensions and national healthcare, which governments including that in the United States are having trouble paying for.
It looks as if cryptocurrency is here to stay because the government can make a lot of money from it. Expect to see many governments cryptojacking in the near future. Criminals are showing us why every government will try to enter the cryptocurrency business soon.