Mining for cryptocurrencies such as bitcoin isn’t the first “crazy” idea Dan Ingram has come up with, according to his wife Amanda Ryland.
“Most of his endeavours have been profitable,” Ryland said. “They may sound crazy, but I trust him.”
Entrepreneurs at heart, the Langley, B.C., couple sees real potential in the somewhat complicated world of cryptocurrencies. But rather than buy the digital currencies, they have invested more than $100,000 in the machines, electricity and space to create new ones — a process known as bitcoin “mining.”
“If I was looking for get-rich-quick, I would’ve just bought bitcoin, and just sat there and crossed my fingers — and that would be really taking a chance,” Ingram, 38, said. “I was looking for something that was a little bit more stable.”
Ryland, 39, jokes that she and her husband have to explain to friends that bitcoin mining doesn’t require a headlamp or a pickaxe.
Bitcoin mining is done digitally, using machines with high-level computing power to try to solve complex equations. Successful miners are rewarded for their efforts with bitcoin.
Ingram and Ryland have 11 mining machines running at their home, and many more that recently shipped from China that they plan to set up in a specially designed warehouse space.
Each shoebox-size machine requires a lot of electricity to run, generating heat that is moderated by an attached fan, which creates a loud humming noise.
There are massive mining enterprises elsewhere in the world, such as those operated by Bitmain in China.
The warehouse building will help Ingram and Ryland to access more power at better rates, but in order to compete with those giant commercial operations, the couple teams up with other miners in an online pool and get a small slice of any cryptocurrencies earned each day.
“I’m not planning on taking money out on a daily basis to live off of — I have a job for that,” Ingram said. “This is for the long term. It’s basically taking all of my savings so far and putting it towards it. It is a little risky, but I’m young.”
Bitcoin is just one of many cryptocurrencies that have gained popularity in recent years, but its meteoric rise this year from under $1,000 US at the end of December 2016 to more than $14,000 US on Wednesday has attracted attention from many high-level investors — some of them believers and others skeptics.
Technology pioneer John McAfee recently predicted on Twitter that the price of a bitcoin would hit $1 million by 2020, while J.P. Morgan CEO Jamie Dimon has called bitcoin a fraud.
“If you’re stupid enough to buy it, you’ll pay the price for it one day,” Dimon told an audience at an Institute of International Finance conference in October.
Bitcoin’s trajectory has all the hallmarks of a bubble, according to Adam Button, chief currency analyst at ForexLive.
“This is the mania of our time,” said Button. “This is a story that’s gone from far on the fringes to the mainstream to something you’re hearing about in restaurants and street corners every single day.”
Button is wary of how long bitcoin can keep up its explosive gains, particularly as its mainstream popularity makes it increasingly slow and pricey to use for its initial purpose — a way for people to exchange value among one another without having to rely on a bank or government to backstop the deal.
“It’s failed as a currency,” said Button. “I don’t think it will be too long until we see another massive correction.”
Even if bitcoin or other cryptocurrencies don’t pan out to be a digital gold mine, Ingram says he’s comfortable that he’s taking a calculated risk.
“If this is going to work, it’s going to work really well,” he said. “If it’s not going to work, I’m going to have to live with this decision the rest of my life — and I’m fine with that.