Many years ago, before most of the world had even heard the name “bitcoin,” you could mine your own bitcoin with nothing but a home computer and a reasonably capable graphics card. I was fascinated by the whole notion of digital currency — something I’d been thinking about long before the bitcoin whitepaper brought a (possibly) practical digital currency into existence.
I was excited about the potential for digital currency to enable online micropayments. I imagined surfing the web and if I found a news article or essay or song or piece of visual art or even (gasp!) a meme I really liked, being able to click a single button and send a dime to the creator. That dime, I suspect, would be a lot more than the creator might get from showing me an ad, and it would come without the privacy nightmare that the online advertising oligopoly has become. Or the scourge of having to have dozens of subscriptions to content you barely read just to have access to the very occasional worthwhile article. Or without resorting to something like piracy.
So I bought a decent graphics card for about a grand and set up a box to mine. I mined a little over a single bitcoin in a month before the card blew up. The card’s manufacturer said they had discontinued the card, so would just issue a refund. I probably spent a few hundred dollars in electricity on the venture, and I had a bitcoin worth, I think, around $50. So no profit, per se, but an interesting experience and I had a souvenir bitcoin.
Right now, that bitcoin is worth over $100,000. I’m happy about that, but it’s not an unalloyed good. Speculation is what drove the price so high, and speculation is also the reason that I still have the bitcoin because it never became a viable way to handle micropayments. With so many people thinking they could become cryptocurrency millionaires, the price of bitcoin became so volatile that it wasn’t usable for payments. Famously, a man once bought two pizzas for 10,000 bitcoin, worth about one billion dollars today.
In general, the cryptocurrency space has become a hive of scum and villainy. I did make a few small purchases with fractions of my bitcoin, and I gave some of it to my children, but mostly I just kept it. Bitcoin only has value because people believe it does, and that value could vanish at any time like Peter Pan (or was it Tinkerbell?) falling from the sky because too few people believe.
“But, twoprops, isn’t that the same for any currency, such as the almighty US dollar?” No, because behind the US dollar are a lot of people with a lot of guns who will put you in prison if you don’t pay your taxes in US dollars. So US dollars are pretty much a must-have, at least for people living in the US and participating in the economy in any meaningful way. Bitcoin? It’s just an interesting speculation scheme.
Now that I’m retired and bitcoin is (just barely) in the six-figure range, HA and I thought I should sell it and at least get some profit from my several hundred dollar investment.
It took a little research to figure out how to sell. I decided to use an exchange, which is risky even if you pick the most staid and stable of the exchanges such as, say, Mt Gox or FTX. Back when I was first bitcoining, selling cryptocurrency largely meant a lot of shady deals in order to keep the transactions off-the-books. Cryptocurrency folks believed that they were above silly notions like taxation. How could the government tax you just for having some special numbers on your computer? But, of course, governments found a way. I wasn’t trying to hide anything, though, so I just went through the ordeal of filling out an exchange’s know-your-customer forms and did some pretty straightforward transactions, making sure that I didn’t leave the money sitting around in the exchange any longer than I needed to.
—2p