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.
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.