Cryptocurrency mining has become popular across the world, causing global shortages of desktop GPUs and increased demand for ASIC mining hardware.
In addition to large power demands and expensive hardware, cryptocurrency miners also require a stable Internet connection to sync their node with the blockchain or communicate with a mining pool.
Crypto mining doesn’t work without an Internet connection, and when the hardware required isn’t mining it is essentially losing money.
It is therefore understandable that cryptocurrency miners who experience extended Internet outages or frequent connection drops could be quite upset with their Internet service provider (ISP).
However, they would struggle to find a legal basis for reclaiming their lost income from their ISP, according to Norton Rose Fulbright.
Direct and indirect losses
“Where a business suffers a financial loss due to a lack of Internet connectivity from the ISP, this type of loss may be indirect or direct, depending on the circumstances,” said the law firm.
A loss is a direct one where it would arise in the ordinary course from a breach of a contract, but for a party to be entitled to indirect losses for a breach of contract, the party that breached the contract must have agreed to pay for these in the contract.
“Most ISPs have standard terms and conditions which exclude liability for indirect losses,” said the firm.
“It would therefore be unlikely for most customers to be able to claim for loss of income.”
The case could be stronger for an online shop where the ISP knew the customer ran the business, as this loss of income could be argued as a direct loss.
The firm said an ISP would only be liable for a loss of income if the following conditions are met:
- The ISP agreed to be liable for that loss in its contract with the business.
- The ISP and business can reasonably be said to have contemplated a loss of income as a probable result of a lack of Internet connectivity.
The firm added that if an ISP offered service levels to a business knowing that it could not deliver on those service levels, the ISP could be liable for direct losses, even if its liability was excluded or limited in the contract.
“This is because the ISP would have acted fraudulently and our law does not recognise an exclusion of liability for fraudulent conduct,” it said.
While businesses may be able to seek recourse against an ISP which had committed to support its Internet-dependent operations, the options are less applicable to everyday consumers and cryptocurrency miners.