Bitcoin for the Newcomer – An Update

About a year and a half ago I wrote a little article explaining Bitcoin and how you too, with little or no money, can get some satoshis and enjoy in this new emerging world. Sadly I think that this time is at an end.

I’ll preface things first that Bitcoin is very much alive and well. I keep dibs on the news and the amount of venture capital backed firms that are coming online each day is astounding. Bitcoin ATMs are in place, governments are adopting/approving bitcoin. Apps are making it easier than ever to store and exchange bitcoin. From what I can see, that’s the biggest hurdle, making it simple enough that any user can start using bitcoin, and do so in a manner that will keep their money secure.

However, I don’t think bitcoin is for the hobbyist or “poor man” anymore. Part of the initial appeal of bitcoin was that anybody could setup their own mining rig with existing (or maybe some relatively inexpensive new) hardware, be a part of the blockchain community that verifies payments, and make some money on the side. As the popularity (and blockchain complexity) increased, the hardware wars began to build bigger and better miners. Nowadays, you need high energy consuming, peta-hash speed miners to hope to get a decent piece of the action to recover your maintenance fees.

Even cloud mining operations were affected. The cloud mining service I love, cex.io, effectively shut down their cloud mining operations for “lower hash rate” users due to the maintenance and mining fees being more expensive than what you could make out of a mining session. There’s no solid answer on when it would become profitable again to do so. Other cloud mining services require you spend a large amount of money per month to rent their services, somthing I’m not interested in at this point.

Part of this, I believe, is due to the lower dollar exchange value for bitcoin. I was there the day bitcoin topped $1000 per BTC, making my mere .03 BTC worth nearly $30. The fever was high and it seemed like the sky was the limit. I had done enough mining / trading during that time to buy pizza on a couple of nights as well as purchase a set or two of cards for my favorite CCG. Life was good. But a major exchange crashed, a few large thefts occurred, and things slowly tapered down. $230 is the appromixate going rate these days. The lower price and growing complexity in solving the blockchain to get the reward pushes things out of the “poor man’s” league. I don’t even consider using the faucets anymore.

As with everything else, the future is always moving forward. Who knows what will happen. I have a whopping 62,891 satoshis (read 0.00062891 BTC) valued at 14 cents at the moment. I also have 13.5 GHS (read giga-hashes) of mining power waiting for the day that things get profitable again. Sadly, due to increased trading costs, I can’t cash any of this out and move it to my Coinbase vault. So I sit and wait. If you’re looking to get into bitcoin, at this point you have to start big. Spend the $230 or so to get a BTC and then you can spend with it to be part of the system. You could potentially buy a lot of mining power, but I still don’t know if the maintenance fees would be greater than the profit, or you’d spend a long time recovering your expense. Outside of that I don’t think there is much left for the hobbyist or poor man.

Please correct me if I am missing something. I’d love to participate in the system again.

2 thoughts on “Bitcoin for the Newcomer – An Update

  1. People say this every year. If it was to break into the mainstream it wont be next year. Maybe in 3-5 years but not any time soon. Bitcoin has been moving very slow for over a year now and unless some massive corporation or industry gets on board it’ll probably be another slow year.

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