State Employee May Be ‘Debarred’ for Mining Bitcoins with NSF Computers

An unnamed employee of the US National Science Foundation (NSF) who allegedly used the organization’s supercomputers to mine bitcoins at two different universities should be “debarred,” recommends the most recent NSF semiannual report to Congress.

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State Employee May Be ‘Debarred’ for Mining Bitcoins with NSF Computers

An unnamed employee of the US National Science Foundation (NSF) who allegedly used the organization’s supercomputers to mine bitcoins at two different universities should be “debarred,” recommends the most recent NSF semiannual report to Congress.

The news of the mining was first reported in June of this year, and the recently released report is dated September. The NSF said the employee would be “suspended” during their investigation of the claim. That investigation has now, apparently, been completed. Furthermore, the NSF claims that they should be given all of the employee’s bitcoins, which they’ll convert to fiat.

The unnamed researcher is said to have mined around 12 bitcoins, worth about US$8,000 when the first reports were released. In other words, the NSF researcher generated about US$8,000 worth of wealth by Bitcoin mining.

Was he perhaps putting the supercomputers to a better use with Bitcoin mining than they would have seen otherwise? Because considering the NSF’s history, it’s likely.

The NSF’s Reputation for Waste and Fraud

A few recent expenditures can shed light on how the NSF’s thinks wealth is best spent:

  • US$1 million on an analysis of how quickly parents respond to trendy baby names

  • US$2 million to declare that people who post pictures of themselves online from the same location are usually friends

  • US$50,000 to produce staff-written rap songs, titles including “Money 4 Drugz,” and “Biogas is a Gas, Gas, Gas”

  • US$581,000 to study racial preferences of dating site users

  • US$315,000 to study Facebook’s Farmville game

Because hey—curing cancer is so passé.

These expenditures are part of a larger report by US Senator Tom Coburn, M.D. (R-OK), entitled “The National Science Foundation: Under the Microscope.” The 2011 report documents “more than $3 billion in waste and duplication.” Hundreds of millions more are reported to be spent by the NSF on “excessive travel funds,” unfulfilled contracts, porn viewing at the Antarctica NSF research center, and the habitual practice of grant recipients taking more money home in personal salary than is reported or allowed.

If the NSF ends up taking all 12 of the employee’s bitcoins, that money may even go to study victory patterns in next year’s March Madness basketball games—a favorite US$80,000 pastime by the NSF.

Researcher Now Free to Go Do Something Useful

The potentially-debarred NSF researcher who was suspended for mining bitcoins was, ironically, performing a service for which there is very high demand (unlike studying racial preferences of online daters). In his case, US$8,000 worth of demand, to be precise.

The supercomputers that the researcher used for mining may otherwise have been deployed in the kind of wasteful or fraudulent expenditures mentioned above. But even if they hadn’t, the NSF has no way to know what people really want money to be spent on, because they don’t have to earn their money—they just take it through taxation.

Bitcoin miners, on the other hand, earn their money through individuals voluntarily using Bitcoin. This ensures that they’re performing a needed and valued service, rather than—say—writing reports no one will ever read about Farmville or baby name trends.

The cryptocurrency industry is booming. The out-of-work NSF employee will find there are many opportunities to continue contributing to Bitcoin, if he maintains his penchant for doing things that are actually useful.


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