I thought I would share how I first got involved with Bitcoin back in 2014. By taking part back in the relatively 'early days', one could probably safely assume that 3 years later I would have amassed a huge fortune. But unfortunately that couldn't be further from the truth - in fact I ended up losing a significant sum!
At the time I was working in the ATM team a large New Zealand bank. My manager had heard about this digital currency called bitcoin, and wanted to know more about it and whether it posed a threat to the business. It was my job to do some investigative work and report back. As I delved into the crypto world it didn't take long to realise that bitcoin was an absolute game changer. I reported back to my manager with the bad news for the bank. My conclusion was that bitcoin was indeed a threat due to the decentralised nature of the currency, enabling users to perform financial transactions without the need for a central banking authority. I also added that although there was nothing the bank could do to stop it, suggesting the best course of action would be to embrace blockchain technology to improve its own business processes.
Even though my report was finished, my interest in bitcoin had only just begun. I set myself a goal was to accumulate as many bitcoins as possible in the next 6 months, and hatched the perfect plan! I purchased two small S1 Antminer rigs for 2.6 BTC and ran them for a month. This 'pilot' proved relatively successful, although not as well as I hoped for, particularly after factoring in electricity costs. However based on the results I decided to go all IN! I purchased four Terahash miners - more than 10 times my current capacity! These 19-inch rack-mountable servers were going to make me rich! The cost of 27 bitcoins seemed like a pretty solid investment with a payback period of less than 6 months. But unfortunately, thats when it all went pear-shaped. The miners I ordered were 'off the plan' and I had not fully comprehended what that actually meant. What it meant was they hadn't even been developed! So after countless cycles of design-build-test phases by the manufacturer, the miners finally arrived - albeit 12 months later. By that stage though, mining pools and hashing power had grown exponentially to the point where my miners weren't even covering the cost of the electricity to run them. Eventually I made the hard decision to pull the plug on the whole operation and shut it down.
Lessons learned
- A fool and his money are soon parted. Don't invest more than you can afford to lose
- Read the fineprint and don't buy mining machines off the plans. Timing was critical and my miners were redundant before I even received them
- After this experience I wouldn't go near mining, other than to learn about and experience it. Unless you get free electricity or close to it, you won't be able to complete with commercial mining operations.
Do you have a similar story? Feel free to post it below.
