Follow Me: The Wanderer retired from his engineering job at a major Silicon Valley semiconductor company at the age of 33. He now travels the world, seeking out knowledge from other wealthy people, so that he can teach people how to become Financially Independent themselves.
I’m honestly not sure why so many people have such a hard-on for crypto. At this point, we now personally know nearly all the major FIRE bloggers out there and of the ones that successfully reached FIRE, most got there by investing their money in index funds, with some doing it through rental real estate. Nobody got there by investing in crypto.
The biggest reason for this is that cryptocurrency is a speculative investment with no intrinsic value. Even if someone did make millions off Bitcoin, it would be completely unreproducible. “How did you become a millionaire?” “Oh, I bought into Bitcoin 5 years ago.” Great, so how does that help anyone now?
But that doesn’t stop people from pestering us in our inbox every goddamned day. What about crypto? Why aren’t you writing about crypto? Why don’t you own crypto yet?
After the thousandth email, I’m throwing in the towel. OK FINE, INTERNET. You win. You’ve worn me down, OK? I now own freaking crypto. Happy?
This article might sound like one of those oh-so-hilarious “joke” posts that FIRE bloggers love to post on April Fools, but a) it’s not April and b) I’m being serious. I actually do own crypto.
I just refuse to pay for it.
The problem with Bitcoin (or any crypto) is that nobody actually knows what it’s worth. Today it’s worth about $40,000 USD. A year ago it was worth about 50% more. And 5 years ago it was worth a couple hundred bucks. Nobody, not you, not me, and definitely not Elon Musk, knows how much one of these things is worth.
So in that way, Bitcoins are kind of like Beanie Babies. Would I pay money for Beanie Babies? Hell no. But if I could get a box of them for free, why not? It’s no skin off my back, and if some idiot wants to buy them off me later, great!
So that’s the principle of my crypto strategy. Own crypto, but get it for free. How did I do that? Well, keep reading to find out!
The Basics of Blockchain
Despite me coming out publicly against Bitcoin as an investment strategy, I’ve always found cryptocurrencies fascinating from a technical perspective. In my previous life, I was a computer engineer, and I studied cryptography in both undergrad and grad school. Here, using the power of math, I could make any message unreadable at will, and only give the power to unlock that message to whoever I decided. World War II was won by the Allies not because one side’s military was stronger than the other, but because mathematicians like Alan Turing and Polish cryptologist Marian Rejewski out-math’ed the Germans. It was an inspiration to math nerds like me everywhere that they too could change the course of history.
Never in a million years did I think cryptography would take over the financial world the way it did.
So you’d figure that combining two of my loves (math and money) would turn me into a crypto fanboy, right? Well, yes and no. I mean, I’m still fascinated seeing how the crypto space is evolving, but once the Reddit maniacs jumped in, crypto lost most of its appeal to me as a financial investment. In order to buy Bitcoin on an exchange, I’d have to buy from one of them, and who knows what kind of pump-and-dump BS those guys are running on any given day.
So how do I plan on getting Bitcoin if I refuse to buy it on an exchange? Simple: Create them myself.
OK, a brief primer on how Bitcoin works. You’ve undoubtedly heard of the term block-chain by now. Here’s what it means.
When people make transactions using Bitcoin, their transaction details (sender, receiver, amount, etc.) are put into a ledger that tracks everyone’s activity. These ledgers are split into chunks called blocks. These blocks are then chained together to form a chain of blocks, or a block-chain.
The block-chain is not owned by any one entity, government, or financial institution. This quality is why people keep referring to Bitcoin as a decentralized currency. Anyone can download it, host it, or make changes to it.
But what’s keeping me from downloading the block-chain and altering it to give myself a bajillion Bitcoins? Well, I can’t because each block is validated and digitally signed. If I were to alter a transaction on a signed block, it would be immediately obvious that the block had been tampered with (since the signature would no longer be valid), the block, and my fake transaction, would be rejected by the network.
So, you might be wondering, who is doing the validation for each block? That’s where the miners come into play.
Validating a block is a very computationally expensive task. It involves solving a series of complicated math puzzles that takes even very powerful computers a long time to do. Theoretically, anyone with a computer can do it (since the block-chain is de-centralized), but it’s going to take time and computing power. So why would anyone do it?
Simple. If they solve the puzzle, they get rewarded with Bitcoins.
The Bitcoin protocol is designed so that when someone successfully validates a block, new Bitcoins are created and awarded to that person. This is how new Bitcoins are added to the system, and is referred to as “mining.”
Now, as you might expect, generating Bitcoins via mining is a little more complicated than I made it appear. In fact, if you’re a regular person like me without access to custom-built mining hardware, mining Bitcoins no longer works.
This is because the Bitcoin protocol is designed so that mining becomes progressively more difficult the more blocks get added to the block-chain. Why would they do this? Because they knew that computers get faster over time. If mining the first block was the same amount of effort as the bajillionth block, after a while validating each successive block would become faster and faster, which would result in more Bitcoins flooding the market, which would devalue existing Bitcoins and render the whole ecosystem worthless. Gold is valuable because getting the first nugget out of the ground is relatively easy, while getting the last nugget out of the ground is insanely hard. That’s where the inspiration for the block-chain validation protocol came from.
So here’s the problem. So much attention and computing power has been focused on Bitcoin that the mining difficulty is completely out of reach for average computer owners like you and me. At this point, you need specialized computer equipment plugged into geothermal power sources to profitably mine Bitcoin.
That’s why I’m not going to mine Bitcoin. I’m going to mine an altcoin.
Altcoins are one the many, many cryptocurrencies out there that were created after Bitcoin. You may have heard of Ripple, Ethereum, or (sigh) Dogecoin. All these are altcoins.
The advantage of mining a less popular altcoin is that the difficulty of mining is way lower. Not everyone has jumped on the bandwagon yet, so you have less competition. However, it’s important that whatever altcoin you pick is popular enough that enough people use it, and most importantly, a relatively stable exchange rate exists between that altcoin and Bitcoin. Collecting altcons is worthless if you can’t exchange it.
For that reason, I’ve chosen Monero as my altcoin of choice. In my mind, Monero is what Bitcoin should have been. Bitcoin prides itself on being de-centralized, private, and that no government can decode how you spend your crypto. Except that governments absolutely can decode how you spend your crypto. The block-chain, ironically by nature of being de-centralized, is downloadable by anyone without a court order, and because Bitcoin made the mistake of leaving everyone’s Bitcoin wallet addresses unencrypted, they can trace any transaction ever done in the in Bitcoin ecosystem.
Monero fixes that flaw by encrypting everyone’s wallet addresses in the block-chain (among other security measures like ring-based transactions, which I won’t get into in this article). As a result, I believe Monero fulfills the original intent of Bitcoin, but for now is relatively unpopular, yet still exchangeable for Bitcoin via an exchange like Binance.
How To Mine
To start, I got me some mining software. The most popular Monero miner right now is XMRig. It supports all sorts of hardware, including PCs, Macs, and even Nvidia-based GPU’s (graphics cards).
Next, I needed to create a Monero wallet. After all, if I’m going to mine Monero, where should that Monero go? I got mine from the official Monero site, and installed it on my computer.
Once I had my miner and my wallet, it’s time to start mining, right? Well, not quite. First, you need to join a mining pool.
Mining is a very computationally intensive job. So most people don’t mine themselves since they don’t have a bank of servers at their disposal. Instead, they join mining pools, which are groups of miners that all collectively pool their resources and work together on a block. If that block gets solved, the reward is split among the miners in the pool according to how much work they each put into it.
The most popular Monero mining pool at the moment is MineXMR, so we’re going to join that.
That page directs you to download and install the mining software onto your computer.
Now, in order to perform any actual mining, we need to configure our mining software. Fortunately, there’s a handy wizard to help us do this. So we will start it up by clicking here…
We pick the pool that we want to join in the drop-down…
Then we put in our Monero wallet address, so the miner knows where to send our Monero…
We enable whatever features we have available on our machine…
We set how much we want to donate to the mining pool (1% is standard)…
And finally the wizard spits us out a command to run!
We start up this command on our computer…
And we are off and to the races!
Let me make this clear: mining is not exciting. Your computer may be chugging away at full speed, but all you actually see is a black or white screen with scrolling status messages. Whoop-de-freaking-do.
What’s much more interesting is the dashboard from your mining pool. If you go to your mining pool’s website and enter in your wallet address, you can see the work that your computer is doing and contributing towards the pool’s mining efforts. For nerdy reasons, the computational steps towards validating a block is referred to as a “hash.” Here’s my current MineXMR dashboard.
Right now, I’m mining on FIRECracker’s Macbook Air, my Macbook Air, and my desktop machine. Combined, that’s a respectable 2.3 kHash/s.
There are a couple ways to play this. I could keep accumulating Monero in the hopes that Elon Musk mentions it on another SNL episode and its price skyrockets. I could also exchange it for a more popular crypto like Bitcoin. I could also sell it directly.
I haven’t decided yet. But the important thing is that whatever I end up doing, I did it for free.
So there you have it. I now own cryptocurrency.
But the big question is, how much money will I make with this experiment? Who knows? But I’m sure it will make another interesting article when we find out.
How much do you think this experiment will make? Vote below!
Source: https://www.millennial-revolution.com/invest/how-to-get-free-bitcoin loaded 26.09.2021