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Bitcoin Mining Scams: Why Do Scammers Modify Firmware or Chips in Used ASICs? 

When something fishy happens in the crypto space, it usually has to do with the market: rug pulls, wash trading, and fake giveaways, to name a few. Unfortunately, Bitcoin mining scams are also very real. And it’s not only cloud mining cons, where owners of non-existing farms disappear into thin air with money from "mining contracts." Fake hardware is also a popular scheme that even experienced miners can sometimes fall for.

BTC mining is currently on the rise — even entire countries are getting their skin in the game. The demand for hardware is increasing, presenting fertile ground for fraudulent ASIC resellers and such.  

If your plan is to buy a second-hand miner and boost it with ASIC firmware, like the one here, to supplement an existing fleet or to start a new one, pay close attention to what you are about to read so that you can distinguish a fake mining rig from a genuine one.

The most common crypto mining scams involving ASIC firmware modifications 

Flashing fake firmware 

This is one of the most common ways scammers make a defective ASIC unit look like it’s barely been used and fully functional. Flashing means replacing an original or a truly useful custom firmware with a shady one which then controls the miner's hardware; it shows a fake hashboard display, making a gullible buyer think the machine is in tip-top condition.

Concealing ghost chips and overclocking 

It’s a widely used method of hiding chips that were damaged due to heat or stress from excessive or poorly performed overclocking. These are called ghost chips because through firmware tampering, the fraudster can make the ASIC show a full, healthy number of chips, even though some are physically dead.  

To compensate for ghost chips, scammers push the remaining chips to run faster than their factory-set speed to temporarily boost performance, creating impressive but fake performance stats. This trick fools a buyer during a brief test, but the fast wear and tear will cause the machine to break down much faster.  

Masking real hashrate and chip health 

Firmware spoofing is another popular type of Bitcoin mining fraud. The scammers load corrupt firmware onto the miner's control board, which then shows an artificially inflated hashrate. For example, if a miner is only producing 50 TH/s, the firmware could be programmed to constantly report 100 TH/s.

This is a classic example of hashrate manipulation that will be revealed as soon as an unsuspecting buyer connects an ASIC to a real mining pool.  

Apart from ghosting chips, a malicious firmware can also be set to ignore or not report errors related to failed chips or thermal issues. This can make a defective ASIC unit appear stable and healthy during a quick test, while the risk of complete mining rig failure is extremely high.

A buyer should suspect spoofed chip stats if a seller is using custom labels like “Jacks” and “Hiks”, or if a device’s history log is overly clean, meaning it doesn’t show errors in its history.  

What’s in it for the scammers?

The motivation behind Bitcoin mining scams is simple: the system is rigged to be highly profitable for scammers while offering victims little to no recourse. 

As always, it’s all about the profits 

There are massive profit margins from selling compromised mining hardware. Schemers can buy old, failing, or even broken miners for a fraction of their market value. Through relatively simple ASIC modifications, like the ones described above, they can turn a worthless piece of junk into a seemingly functional rig. Selling it for thousands creates an enormous profit margin on a device that is likely to fail shortly after being purchased. This is the key reasoning behind every used ASIC scam.  

A regulatory blindspot when it comes to controlling cross-border payments 

There have been major improvements in crypto regulation in individual countries over the past few years. However, there’s still largely no global authority controlling crypto payments, which makes it a fertile ground for crypto mining scammers since they can act almost anonymously.

Cryptocurrency transactions can't be reversed

A confirmed crypto transaction cannot be charged back or undone. Once a victim sends payment without proper mining rig inspection, the funds are gone for good. The scammer can quickly move the money through various digital wallets to obscure its origin, making any hope of recovery nearly impossible.

How to spot a fake ASIC or miner tampering

Obviously, you can’t buy a mining rig without proper due diligence, which implies doing a lot more than a simple visual check. And even when doing a visual check, pay attention to overly clean ASICs. Scammers often use aggressive cleaning solutions not only to remove dirt but also the manufacturer's serial numbers and official stickers. 

But even if the rig looks fine on the outside, remember, the real signs of a used ASIC scam are often hidden in the software. 

No log errors with clean UI 

A suspiciously perfect dashboard must raise a red flag, because it might be due to the firmware designed to suppress any reports of hardware failures. A truly used machine, even a well-maintained one, should have some record of minor errors or temperature spikes. A completely clean log is often a sign of a reprogrammed firmware scam. 

Inconsistent hashrate 

To avoid buying a counterfeit ASIC, always pay close attention to the hashrate. A genuine miner should produce a relatively consistent hashrate. This rate may fluctuate slightly, but If you notice a wildly inconsistent hashrate that jumps around, it could be a sign of firmware tampering. This could be a poorly executed attempt at hashrate manipulation to create misleading ASIC stats just long enough for you to buy faulty second-hand mining equipment. 

Modified chip count and ghost chips 

When checking the miner's software it’s super important to identify a modified chip count or firmware showing ghost chips. Scammers rely on buyers not knowing how to verify this information. Here is how you can do it: 

• When you access the miner's web interface, go to the "kernel log" or a similar diagnostic page. This log should show the number of chips detected on each hashboard. 
• A malicious firmware might show a perfect total chip count on the main dashboard but a lower, incorrect number in the detailed log. 
• If the log shows, for example, "Chain 0: find 120 ASIC," but the model is supposed to have 126, then you have a problem.

Ghost chips are a more advanced form of crypto mining fraud. But there are ways to stop this type of firmware tampering. 

• If a miner is working correctly, the hashrate should be distributed fairly evenly among all the chips.
• A board with ghost chips may show uneven heat distribution. The working chips will likely run hotter to compensate for the disabled ones.
• If possible, use a specialized test fixture, which is a tool used by repair technicians. It can test each hashboard independently and report the actual number of working chips.

Beyond ASIC scams: real-world examples 

Bitcoin mining scams stretch far beyond just selling faulty hardware. Even if you buy a good second-hand ASIC, you can still fall victim to something like a mining pool scam. The fraudsters create fake mining pools with professional-looking websites that promise high rewards and fast payouts. In that case, you’d be sending your hashing power to the scammers.

There are also large-scale cloud mining scams like HashFlare and HyperFund, which were Ponzi schemes that sold mining contracts for non-existent equipment.

More tips on how to protect yourself from scammy crypto miners 

• Mining hardware verification is an absolute must! Bitmain, and other producers, allow serial number checking to ensure the miner is genuine.
• Ask the seller for a live video of the ASIC miner booting up to see its real-time performance.
• Use specialized hashboard testers like ARC or Stasic to conduct a deeper inspection.
• Prefer purchasing from trusted vendors rather than anonymous sellers on platforms like Telegram.

Conclusion 

From fake mining rigs and manipulated performance stats to major cloud mining schemes, crypto mining scams are everywhere. You need to be a vigilant and discerning buyer. Don’t fall for something that’s too good to be true. Only this way can you truly protect yourself from fraud.