Back in July 2016, I decided it was about time I looked at the wonderful world of Bitcoin … and at whether so-called ‘cryptocurrencies’ might represent an interesting passive income opportunity.
Based on what I knew back then (essentially, the square root of not very much), I decided that a completely unregulated product from a company called Genesis Mining** might offer an interesting way into the subject.
And so I bought a mining contract.
And so you bought a “what!?”, I hear you ask!
Well, for now, just trust me when I say that “mining” cryptocurrencies is a way of making money. And if you’d like a no-nonsense explanation of how and why, please read my trial introduction (which, I assure you, assumes no prior knowledge on your part).
Anyway, the mining contract I bought was for a share in a “mining pool”. Which means I had secured a slice of the action, rather than the whole pie, so could expect a proportionate share in any rewards arising.
I also had to accept that I might lose every penny I had staked as, essentially, I knew nothing about Genesis beyond what I had managed to glean from reviews on various enthusiast websites.
The contract I bought was due to last up to 2 years — i.e. up until July 2018 — so I left it until November to write my first progress report. By which point, assuming level returns into the future, I was on track to make an eventual ROI of 11.9%.
All of which was hardly world-shattering news but still seemed basically OK as, once I had bought and set up my contract, there was literally nothing for me to do but sit back and count the money as it trickled in, bit by bit, each day.
However, I have now been doing this for eight months… and it’s time for another update.
So, am I still making modest money – or have my fortunes improved or, indeed, nosedived?
Read on to find out…
I’ve had a very good four months and, remarkably, am already in profit with 16 months still to go.
Yep, my original outlay of £74.82, or $95, last July, has already produced cash inflows of £100.65. Which represents net capital growth of 34.5%.
Now, this outstanding change in my fortunes has largely been down to currency appreciation.
A quick look at the performance summary reveals just how volatile cryptocurrencies can be:
|Currency Ticker||Adjusted Earnings||Currency to £ today||Value in £||Currency to £ (Nov 2016)||Growth in currency value|
|BTC (Bitcoin)||0.001282146||£ 841.220||£ 1.08||£ 573.26||47%|
|START||22.82002595||£ 0.004||£ 0.08||£ 0.02||-82%|
|DASH||1.152749028||£ 71.030||£ 81.88||£ 7.84||806%|
|CURE||155.7535757||£ 0.060||£ 9.28||£ 0.04||49%|
|XMR (Monero)||0.535425748||£ 15.547||£ 8.32||£ 4.58||239%|
The standout winner has clearly been Dash, which has underdone explosive growth over the winter: up over 800% against sterling in just four months.
Another emerging currency, Monero, has also done very well, with gains of 239% in the same period.
So: if we add up the money made against each currency, we get to the following overall totals:
|Total income to date||£ 100.65|
|Daily Earnings||£ 0.45|
|Days in contract||730|
|Potential Total earnings (assuming level returns into future)||£ 326.54|
|Original cost of contract||£ 74.82|
|Overall profit as at today||£ 25.83|
|Projected ROI (assuming level returns into future)||336.4%|
Now, I have no idea if it’s reasonable or not to assume level returns into the future, but I’m not sure I care.
All I do know is that, thus far, the whole experience has been thoroughly satisfactory. 🙂
If there is one moral to draw from the trial so far, it’s that cryptocurrency mining is all about picking winners.
Dash and Monero both seemed promising when I first got involved, being already valued at well over £1 each and seemingly appreciating gradually.
They’ve since proved to be sound choices: though, of course, there are no guarantees here whatsoever, and they could both yet collapse in an unsightly heap.
By contrast, Startcoin and Curecoin were both seriously long shots: analogous to penny shares in the world of stocks, and thus almost entirely worthless. Nothing really has changed with them since. I still hold out some hope for Curecoin but have given up mining Startcoin altogether.
Mining Bitcoin itself seems a rather pointless exercise unless, of course, you are ready to invest an awful lot more money than I am. A single Bitcoin is worth well over £800 at time of writing, so my £74 contract would barely make a dent in one. I have therefore abandoned Bitcoin in favour of other so-called ‘altcoins’ such as Dash and Monero.
My mining allocation now therefore looks like this:
- Dash – 50%
- Curecoin – 20%
- Monero – 30%
I still have 16 months left and am really enjoying this.
I have no particular expectations and no intention of touching any of the money I extract from the process for a very long time yet. Who knows where I will end up!?
The best part is that, now it’s all set up, there is simply nothing for me to do.
Along the way, I have learned an awful lot and feel I could now write an introduction to the subject. If enough readers express an interest, I would happily pen a PDF about it: so let me know if this appeals by leaving a comment below or by writing to [email protected]
I’ll be back in July with my one-year report. In the meantime, if you’d like to start cloud mining crypto-currencies with Genesis, then please:
- realise that this new world is our generation’s Wild West – so you must be prepared to lose every penny you invest in it
- **go to Genesis Mining and use discount code ‘BosQzu’ to get an additional 3% free “hashpower” (= mining power). 🙂