Bitcoin image by Antana from https://www.flickr.com/photos/105644709@N08/ under CC BY-SA 2.0; Sheep image by marybettiniblank, Pixabay under CC BY-SA 2.0
When my wife and I embarked on our nomad journey, we had the goal of funding our lifestyle through passive income. We wanted a future-proof, low maintenance strategy we could manage remotely. We chose cryptocurrency mining.
It did not end well.
My wife had been mining as a hobby since the early two thousands. She slowly scaled up from a tiny USB miner to a full-blown AntMiner S7.
For anyone not familiar, these little toaster ovens scream like a banshee and put out enough heat to warm a second story. After setting the guest room to “broil” one too many days, we cobbled together a window duct from a piece of insulation and a dryer vent to aim the heat outdoors.
Imagine setting your microwave to run 24/7 and you’d be close to the power consumption. Rarely did her mining proceeds add up to more than breakeven on the intense electricity costs.
Until one day, it did.
The profit was modest. Roughly seventy-five dollars a month. Nothing to live off, certainly. Then we began to wonder – what if we had ten? Twenty? One Hundred?
In 2016, we opened an LLC. We started with Ethereum mining rigs at home. Less power-intensive, we could run those off residential power without blowing up the neighborhood transformer. With Bitcoin miners, we had a choice to make – build our own facility or use an existing data center.
Nobody in the cryptocurrency space used data centers. They were outlandishly expensive. Mining profitability often ran on a knife’s edge.
But Bitcoin had just entered a historic bull run. New government regulations signaled acceptance. Financial markets buzzed about the once niche currency. Widespread adoption seemed imminent.
We went all-in on the data center strategy.
The fees were outrageous but so was the money being made. Every cent we plowed back into more machines. At the peak, we had ninety.
Housed in a managed, high-tech facility, our little cash incubator would be perfectly protected and accessible to knowledgeable technicians in case anything went awry that we couldn’t solve with a remote login.
We had it made.
Remember my last article about false peaks?
Little did I know, we’d stumbled into one. I can identify them in the backcountry. Business? I’m still a neophyte.
The world wasn’t ready for such a fundamental shift. Greed, like ours, had flooded the technology. But the technology was never about money.
We hit our false peak inches from the summit. As more miners crowded the space, the reward for processing transactions dropped. Investors took their profits and ran. Then the bottom fell out of Bitcoin. Within months the price plummeted from near $20,000 per coin to $6000. The miner’s reward, still heavily divided among so many new mining operations, fell with it. By the end of 2017, Bitcoin settled at $3,300.
We had to pull the plug on our experiment. The bankruptcy of our company followed.
But we’d gone all-in on something else, too – the nomad lifestyle. We could no longer count on easy money to fund it. We found a way to make our dreams a reality anyway.
My wife’s work as an IT Project Manager can be done from anywhere. She’s the conventional financial backbone of this adventure. When her boss refused to allow her to make those international teleconferencing calls from somewhere other than a desk in their office, she found another employer who was willing.
A global pandemic proved that to be a wise move.
I play a more unconventional role as a struggling writer. To help make our lifestyle work, I volunteer one of my most valuable assets: my time.
The thousands of public parks, forests, and recreational lands across America need help. In many cases, they’ve set aside a place for you to park your rig. In some cases, they provide electricity and water – precious resources we’ve learned to appreciate in our new minimalist mindset.
The new mindset required a re-imagining of what it means to have value. Funding isn’t always a fiscal transaction. Money isn’t always the solution. Cryptocurrency had this baked into the code long before we took interest.
Like our newly adopted lifestyle, cryptocurrency and the underlying blockchain technology was never meant to change the world from the top down. The technology persists because of what it has to offer – decentralization.
It will alter the world from the bottom up. Individuals will call the shots. Like we have. Like you can.
The blockchain is an encrypted but open ledger. This means every transaction between two parties can be viewed openly. Private details will be obscured, but the transfer of trust (traditionally, currency or funds) is publicly accessible and unchangeable.
Banks, those guys who used to be responsible for protecting stagecoaches full of gold and vaults full of money, are realizing their obsolescence. Peer to peer transactions can be processed without a middleman. But the exchange of trust doesn’t have to be financial.
Take our current environment of political mistrust. One side argues mail-in ballots are corruptible. The other worries if their votes will even be counted.
Blockchain voting and similar approaches could allow you to place a vote and personally verify the result. Encryption would hide your identity and your choices, but each individual would know if their vote had been accepted.
It’s 2020, not 1920. Voting digitally? Phone to phone transactions without banks or middlemen? That should be like handing your neighbor a few bucks for gas. How have these not happened yet?
Resistance. The trail has become too steep for the old guard. They’ll fight, but you can’t stop progress.
This past week, China offered a national digital currency. Bermuda, tax haven darling of the rich and famous, began accepting cryptocurrency as payment for government services and taxes. The Fed Chair of the United States indicated the U.S. had begun researching a digital currency response.
These aren’t proof of the widespread adoption of Bitcoin we missed out on. No, the leaders of the world are finding their false peaks.
The future of the world is decentralized. Remote work away from corporate control. Political systems where voters trust and verify their own votes. Financial transactions that aren’t unnecessarily vetted by bloated banks with outsized control over who wins and loses in any given economy.
Free, transparent systems are the future. Control is achieved through opacity. An open society will set us free. But you can be free now.
Don’t fret about funding your dream. Live it.