Auckland Man Sells House To Build Bitcoin Mining Rig

In the latest indication that the cryptocurrency market top has arrived, a 30-year-old IT professional in New Zealand – who didn’t want his identity revealed, presumably for fear he would be targeted by criminals (or worse: tax collectors) – sold his house to build a "virtual-currency mine" at a "secret west Auckland location."

Readers who have been following our coverage of the New Zealand property market will understand the irony inherent in this exchange: Much like bitcoin, housing costs in New Zealand have been massively inflated thanks in part to an influx of foreign capital, with Chinese buyers representing one of the largest groups of investors, according to the New Zealand Herald.

A small room filled with incredibly powerful computer hardware that trawls through millions of transactions a second...

The man first became interested in bitcoin in 2013 when the price of a bitcoin was about $1. Earlier today, bitcoin was worth in excess of $18,000.

The 30-year-old IT professional, who didn't want to reveal his identity, has created a "virtual-currency mine" at a secret west Auckland location; a small room filled with incredibly powerful computer hardware that trawls through millions of transactions a second.

 

The man first became interested in the monetary phenomenon in 2013 when the price of a bitcoin was about $1. Earlier today, bitcoin was worth in excess of US$18,000.

 

Despite an unremarkable start to his venture, a friend suggested he purchase more equipment to increase his returns.

 

"Then we got talking: What if we put $5000 into it? What if we put $10,000 into it? What if we sold the house and put it into all of these?

 

"That's literally what I did: Sold the house in Hamilton and here we are today."

 

With the $60,000 equity he received from the $300,000 sale, he purchased the expensive, high-powered computer equipment necessary for a lucrative virtual-currency mine and spent over 400 hours researching how to set it up and find pay dirt.

Aside from spending NZ$1,500 (about $1,000) on his power bill, the unidentified crypto miner can essentially just sit back and watch the cash roll in – something that’s allowed him to fund both his wedding and his honeymoon to Fiji.

Fans whir constantly in the 35C heat so his expensive equipment doesn't crash, but other than a $1500 a month power bill, the digi-miner doesn't have to lift a finger other than to flick through his smartphone and watch his virtual money rise and fall in value.

 

And so far it's mostly been rising - at an astounding rate. In just three months the man has funded his $30,000 wedding and honeymoon, as well as a trip to Fiji.

 

"I get rewarded for validating and verifying that people have the cryptocurrency ... [and] that if they try and send it to somebody else they're not trying to be fraudulent," he said.

While the man said he’s weathered several rough patches where bitcoin or other cryptocurrencies that he mines have declined sharply, the good times have so far greatly outweighed the bad…

"If you were to take $100,000 and put it into a term deposit you'd get back, what, 5 per cent over five years, 10 years? I mine more than that overnight," he said.

 

"I've woken up some mornings and I've lost $2000 overnight due to the price fluctuations. [But] the good mornings outweigh the bad mornings and unless you're in a hurry there's nothing wrong with sitting on it for six months or 12 months."

Still, he readily admits bitcoin and digital currencies more broadly are “uncharted territory.”

Students of the 2000 dot-com bubble would probably disagree.

Comments

Chief Wonder Bread land_of_the_few Sun, 12/10/2017 - 16:32 Permalink

It makes sense for this guy. 30s, IT professional, single or newly wed. Puts in $60K to speculate and if it goes south, still got his career prospects and presumably a long life to recover the loss. This is what a man does, not a pussy; it is men's proper sphere, it takes some balls.But bitcoin just does not make sense long-term. When the power becomes intermittent to non-existent, what good is bitcoin.. One of several scams being run related to energy production and use, here's another:December 7 – Wall Street Journal (Bradley Olson and Lynn Cook): “Twelve major shareholders in U.S. shale-oil-and-gas producers met this September in a Midtown Manhattan high-rise with a view of Times Square to discuss a common goal, getting those frackers to make money for a change. In the months since, shareholders have put the screws to shale executives in ways that are changing the financial calculus of hydraulic fracturing and could ripple through the global oil market. In the past decade, the shale-fracking revolution has made the U.S. the world’s largest oil-and-gas producer and reshaped markets. Yet shale has been a lousy bet for most investors. Since 2007, shares in an index of U.S. producers have fallen 31%..., while the S&P 500 rose 80%. Energy companies in that time have spent $280 billion more than they generated from operations on shale investments, according to… Evercore ISI.” 

In reply to by land_of_the_few

not dead yet swamp Sun, 12/10/2017 - 03:22 Permalink

The only thing Henry Ford did that was great was hire great managers and line up investors mainly on his reputation for his racing. On one occasion he bought a company just to get the manager, William Knudson, who did great things streamlining the multiple Ford factories before he went to GM who then ran past Ford and never looked back. Other than that Henry wasn't anything special other than he had ideas that other people put into action. Henry wasn't the brightest, or the most ambitious, and a lousy manager.Henry got in the car business to get investor money to tinker and go racing while making a half hearted effort to produce cars. His first company went broke. The investors in the second company took it away from him, with good reason as this one was headed out of business, and the company eventually became Cadillac. He hit the jackpot the third time when he hired a great manager, either by accident or on purpose, to run the company and the rest is history. Henry had a nice big office but was never in it as he roamed the shop or tinkered while others created the success.

In reply to by swamp

Oliver Klozoff not dead yet Sun, 12/10/2017 - 06:28 Permalink

I knew a fellow once who had his fingers in a dozen different pies, enterpreneur with a capital "E".You could actually feel the energy radiating off this guy. I remember thinking I could never run a business, just didn't have that kind of juice.Turns out the guy was bipolar and folks never saw the down side as he would disappear for days at a time, most assumed he was travelling to his different global businesses. Then he blew his brains out. 

In reply to by not dead yet