… And how your behavior on payday can make all the difference when it comes to building wealth.
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About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #53 – How To Legally Print Money
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
With One Small Investment, You Can Start Minting an Absolute Fortune…
Arthur J. Williams, Jr., is one of the most famous counterfeiters in history. He’s widely known as the person who figured out how to create perfect replicas of the “counterfeit proof” $100 bill that debuted in 1996. At just age 15, he started learning the business of printing fake money from an older mentor… By 19, he had his own warehouse operation… And over the ensuing 15 years, Williams says he printed millions of dollars – fake currency that he sold to organized criminals and used for his own lavish spending habits.Of course, Williams eventually got caught and served a couple of long-term stints in federal prison. The moral of the story is pretty clear: Only the U.S. government gets to print as much money as it wants.
Or does it? In this issue, I’m going to introduce you to a new way to legally print your own money. But unlike rapidly-depreciating U.S. dollars, this money has been steadily gaining in value. You can actually get tax breaks from Uncle Sam along the way… And it’s so easy that children are currently making as much as $30,000 a month doing it.
Meet the 21st-Century Money Printers
Ishaan Thakur is 14 years old. His sister, Aanya, is 9. They live in Texas. And together, with a little help from their dad, they’ve been legally printing money since April. Like Arthur Williams, they had to learn how to do it from the ground up. They watched YouTube videos and read various articles on the internet.Then, Ishaan started using his gaming computer to actually start printing money. Five months later, the brother and sister were already making more than $30,000 per month.
How is this legal? Because the siblings aren’t printing dollars, yen, or any other fiat currency. Instead, they’re “printing” cryptocurrencies – including bitcoin (BTC) and ether (ETH).
I’ve actually been doing this since February of 2021.
Let’s start with the basics of how it works.
$1.6 Billion Up for Grabs Every Single Month
So far I’ve been using terms like “printing” and “minting” to talk about the creation of cryptocurrencies like bitcoin. But most people refer to the process as “mining,” because like a traditional mining operation, creating a new bitcoin requires both specialized equipment and energy. Without getting into the weeds, miners provide the computing power necessary to run the bitcoin blockchain. They solve complex equations to verify transactions and keep the network humming along.
The incentive for devoting their time and processing power is a regular bitcoin reward. The reward for mining a new block on the bitcoin network is currently 6.25 BTC. With bitcoin trading at $60,000, that amounts to $375,000. The reward goes down by 50% roughly every four years, with the next “halving” set to occur in 2024.
And while bitcoin does limit its supply to 21 million, that’s not a big concern for miners. Because the reward rate is reduced over time, we probably won’t see the final bitcoin minted until sometime in the year 2140. Add it all up and, based on current prices, the bitcoin network will hand out roughly $2,250,000 in mining rewards every hour…
$54 million every day… And more than $1.6 billion every month for the next several years. That’s a lot of money, and smart investors are rushing in to grab as much as they can.
China’s Recent Ban on Mining Has Created a Huge Opportunity
Twelve months ago, China was the global leader in bitcoin mining, as measured by the bitcoin hash rate – the term used to describe the collective computing power of bitcoin miners. But in June, China began a crackdown on bitcoin mining on all crypto mining, trading, and transactions. As a result, the global bitcoin hash rate fell 70% from pre-crackdown levels.
But since then, the hash rate has recovered… as the U.S. has filled the mining gap that China’s crackdown created. China’s abandonment of its dominant bitcoin mining position will go down as the single greatest destruction of a nation’s wealth outside of a war. Why? Because the strategic significance of being the hub for bitcoin mining cannot be overestimated. Within five years, when bitcoin will be at $500,000, with a market cap of $10 trillion. That’s a $10 trillion market China just gave away to its biggest rival: The United States of America.
By kneecapping its miners and banning crypto, China left the field wide open for other countries to step in… and that’s exactly what happened. U.S. bitcoin miners have become the biggest beneficiaries: They’ll be earning the bulk of bitcoin rewards… and they’ll be sitting on a war chest of bitcoin. And while institutions are definitely moving into the mining space rather aggressively, this is something that regular investors like you can do as well. In fact…
Why Mining Your Own Crypto Beats Buying and Holding
Simply buying and holding bitcoin and other cryptos is a great way to set yourself up for life-changing gains. However, mining your own bitcoin adds another dimension – whether you use it to add to existing holdings or to start acquiring your very first crypto. By its very nature, mining sets you up to acquire smaller amounts of crypto on a regular basis.
It’s a lot like dollar-cost averaging – the process of investing a fixed amount of money into a certain asset on a regular schedule. For example, putting $50 into the same stock every month, instead of buying a large amount of shares at once, helps you manage your risk and limit your downside if that stock were to suddenly drop. With crypto mining, the difference is that you make just a single up-front investment for a machine and then continue acquiring more crypto for as long as the machine functions. It might take a year for you to break even vs. simply buying the same amount of crypto outright. But from that point forward, your crypto holdings can continue soaring.
Your specific numbers are going to depend on a lot of factors, including how much the underlying crypto moves and how successful your mining operation actually is. But over time, the results can be quite impressive.
Just consider someone who decides to buy a top-end mining machine for $10,000 right now. Even if bitcoin merely stays around $60,000 over the next five years, they can expect to end up with nearly $29,000 by the end of that period. In contrast, $10,000 invested in bitcoin itself would still only be worth $10,000. And the numbers only get better if bitcoin prices continue rising.
Under Teeka’s forecast for $500,000 bitcoin, investing $10,000 in a mining rig today would end up producing $239,000 worth of bitcoin over the next five years. Buying and holding the same amount of bitcoin would result in a stake worth just $83,000. On top of the crypto gains, it is also possible to sell your used mining rigs to recoup some of the initial investment you made. For example, back in 2017 an Antminer S9 machine originally sold for $2,000. If you ran that machine up until the present time, you could have mined anywhere from 1 to 2 BTC. And you could still sell your used machine for roughly $400 right now. During extremely bullish times for crypto or periods of low equipment availability – both of which apply right now – it is even possible to sell mining rigs for substantial profits. Used rigs can even sell for far more than they cost new.
Another investor said certain machines that were selling for $2,000 a year ago are currently fetching $12,000 or more. That’s a 6X gain in 12 months… on top of whatever crypto was mined. Beyond the financial rewards, mining crypto is also a way to provide real support to blockchain networks and a great way to learn how this technology works from the inside out. For many enthusiasts, that’s reason enough to give mining a try.
What It Takes to Successfully Mine Bitcoin Right Now
When bitcoin first arrived in 2009, there were far fewer miners, so successfully mining bitcoin was much easier. It was even possible for someone to mine using a regular personal computer. Today, successful miners need more powerful computers. In keeping with the mining idea, they call these computers “rigs.”
Very few bitcoin miners continue to use standard PCs that run on central processing units (CPUs). Instead, they opt for more powerful machines In just a moment, I’ll go over several methods that simplify the process of buying and operating a crypto miner. Before we get there, though, let’s go over a few more details of what to consider when getting into crypto mining.
Most miners care about two particular things in a given rig:
The rig’s “hash rate.” This indicates how many hashes can be generated every second (h/s) and is usually expressed in terahashes per second (TH/s). A terahash is 1 trillion hashes. The higher the hash rate, the higher your chances are of mining a new block and earning bitcoin.
How much energy the machine will consume – both overall and to create the given hash rate (hashes per kilowatt-hour, or h/kWh).
This makes sense. After all, to mine profitably you want the very best chance of successfully creating a block at the lowest possible real-world energy cost. The price of the machine itself is another consideration. Of course, buying the machine is just the first part. It also needs to be programmed correctly. The software might replace the computer’s operating system or run inside of it. And the specific choice will depend on which particular cryptocurrency someone wants to mine and whether the machine is going to run on its own or become part of a mining pool.
What’s a mining pool?
In simple terms, it’s a collection of miners all working together to mine crypto and share in the rewards. And these days, especially for individuals, it makes a lot of sense to join a pool. Right now, you might expect to earn anywhere from $10 to $40 a day from a decent bitcoin mining rig. The longer-term results vary with the underlying crypto’s movements.
As a general rule, total breakeven could take anywhere from just a few months to well over a year. But with a machine’s useful life coming in somewhere around the three-year mark… And many operating for years beyond that… The odds of making serious money look very good. Plus, that’s not accounting for any appreciation on the crypto being mined.
Additional Considerations for Anyone Who Wants to Start Mining Crypto
Perhaps the biggest is your source of energy.
Most machines require a 220- to 240-volt connection, which is larger than a standard 110-volt home outlet. It might be possible to use an outlet that was originally intended for an oven or a dryer. Otherwise, it could cost several hundred dollars to have an electrician install one.
Moreover, the cheaper the source of electricity, the more profitable your mining operation is going to be. This will greatly depend on where you live. For example, someone in Louisiana pays an average of $0.0701 per kWh compared to someone in Hawaii who pays an average of $0.3055/kWh. The general U.S. average falls somewhere around $0.10/kWh, while a dedicated hosting facility can have energy costs that are half of that residential average.
Here’s a brief breakdown of what kind of profit you can expect after a year of using a machine with an average hash rate, with several scenarios for bitcoin’s price as well as your local energy cost.
There are many online calculators that can help prospective miners run different scenarios on how profitable their operation might be. If you’re interested in going deeper, here’s a good one from cryptocompare.com.
Of course, mining rigs can also create a lot of heat and noise. So many home miners end up converting rooms, sheds, or garages solely for the purpose of mining. And while it might be possible to harness a rig’s heat for other purposes – like heating a swimming pool or warming the room itself – it’s also critical that the machine stays cool or else it could experience mechanical problems.
That brings up the topic of maintenance. If you aren’t tech savvy, you will probably need third-party help if your mining rig has a problem. And in the current environment, that could mean waiting weeks or months before you get back online… even if your machine is covered by a warranty. There is at least one distinct advantage to home-based mining: The opportunity for acquiring more crypto with true anonymity. After all, you don’t have to connect to any type of financial institution or exchange and can send the mined crypto straight to your own wallet.
At the end of the day, only you can decide whether a home-based mining rig is something worth tackling. Fortunately, we’ve also found three unique ways to get all the benefits of owning and operating a crypto rig without most of the above drawbacks.
How to Start Mining Your Own Crypto Without All the Headaches
There are many ways to tap into the massive profit potential associated with crypto mining beyond running a home rig. For example, it’s possible to buy shares of various mine operators through both the public and private markets. I previously did a podcast on Bitcoin mining stocks, and since that release those positions are up 64%, 8%, 62%, 162%, 23%, and 21%. Those are pretty solid returns in a short window of time.
It is also possible to purchase so-called “cloud mining” contracts. They essentially get you ownership of a certain amount of mining output over a specified amount of time. However, if you want the best of all possible worlds – personal ownership of mining equipment without all the associated headaches of doing it yourself – there are now several good options available.
We’ve found three companies that allow you to purchase your own equipment…Get it programmed properly… While having it hosted and maintained in secure, cost-effective facilities… With just a few simple steps.
Beyond those similarities, each particular company has slightly different nuances so we spoke to each of these firms at length to get all the details on what they’re offering right now. So let’s review each one, and the links for each one if you want to pursue are on the show notes.
No. 1: Compass Mining
If you’re looking to start small – perhaps with a single mining rig – Compass Mining will probably be your best option. The company has only been in business for a year, but its founders have been in crypto since the beginning. They created Compass to open up bitcoin mining to everyday investors. And growth has been phenomenal.
Just so far this year, Compass has done $175 million in revenue… solely from selling mining equipment and lining up hosting facilities. In fact, the company doesn’t do anything else. It is not involved in payments nor does it mine for itself.
The company offers several ways to get up and running.
Option #1. Purchase a mining rig for home delivery.
Under this scenario, you would be buying a brand-new mining rig but would be responsible for actually hooking it up, running it, and dealing with any issues that arise. While pricing and availability is always changing, Compass was recently offering home delivery on a couple different machines under the $10,000 mark.
Option #2. Purchase a new machine(s) with bundled hosting.
If you want a brand-new mining rig running at a low energy cost and without all the hassles of doing things yourself, Compass can also set you up with a machine and hosting bundle. Here’s how it works…
You pay a deposit for the machine and the first month’s hosting fee, which will typically run around $150. The latter covers the physical space for your machine as well as the energy it will consume. At this point, you’re locked in. You will also decide which mining pool you’d like to join and provide a wallet address where your mined bitcoin will be sent. Once your machine is delivered to the facility and plugged in, your personal mining operation is up and running.
Option #3. Purchase a used machine already at a hosted facility.
It’s also possible to purchase a used machine from a Compass Mining client. An owner of a machine at a Compass Mining facility can sell their machine at any time, including on the same day that it’s set up. Compass charges the seller a 5% commission for placing the machine with a new owner.
Just to highlight an actual offering that was recently listed on the site: An Antminer S19 Pro 110 machine, being hosted in a Russian hydro-powered facility, was available for $15,800. Based on its historical output and with bitcoin around $60,000, the new owner might expect to break even on the machine just after the first year of ownership. That would then mean all future output was nearly “free” bitcoin. Even given a conservative machine lifespan of three years, that would represent a substantial return on the original investment even without any additional price appreciation in the bitcoin itself.
Based on our research, Compass is the only major company currently offering the option to buy a single used machine and host it at their facility, making it ideal for those just getting started in this space.
No. 2: Wattum
Wattum was founded back in 2017 and is headquartered in Wyoming. While the company was hosting individual mining machines as recently as this past July, it is currently only selling packages of multiple machines for bundled hosting. That’s because demand has become too great and space is now at such a premium in the wake of China’s mining ban.
So with Wattum, you basically have two options…
Option #1. Bundled hosting packages.
About 95% of Wattum’s business is new machines and they do not offer a secondary brokerage program like Compass. They will only host used machines that have been mining for a few months or less.
Current minimums for Wattum’s hosted bundles can run anywhere from five to 10 new machines depending on the specific hosting facility. With 100% upfront payment, the machines can generally be up and mining four to six weeks from date of purchase. You can also put down a deposit and pay the remaining balance as the delivery date nears. All-in monthly hosting costs are running around $200 a month, including energy.
Of course, you don’t have to buy a $40,000+ bundle to start mining through Wattum. There’s also…
Option #2. New and used machines for home delivery.
Wattum sells new and used machines for home delivery and their inventory is constantly updating. You can see everything – including very good details about the individual units on their website. You can get an entry level machine for as little as $6,000 or $7,000 and might expect a net return of $500 or $600 a month, depending on your energy costs.
One other thing to note is that Compass largely focuses on bitcoin while Wattum also offers mining of Ethereum, Litecoin, and Dogecoin. You can order Ethereum mining machines through the company website and do pre-orders for Litecoin and Dogecoin mining machines, as well.
No. 3: Blockware Solutions
Out of the three companies presented today, Blockware is the one most focused on high-net worth individuals and institutions, so I’m going to cover this one pretty quickly. So it’s probably not the best choice for someone just looking to get started in the world of mining. However, it does have solid credentials and robust availability for anyone willing to invest a bit more from the start.
Blockware was the first company in the United States to introduce mining in a big way, especially in terms of machine sales. While it started off doing relatively small retail sales, it’s now transitioning into more of an institutional provider. In fact, many of its clients are now corporations, hedge funds, and even publicly-traded mining companies such as Riot Blockchain. With Blockware, you can purchase new machines with or without bundled hosting. In either case, there’s a current minimum of five machines. The company has sold used machines in the past, but it’s not focusing on that in the current bull market environment.
Monthly hosting costs vary with the number of machines you have at their facility, but all-in costs for a minimum five-machine purchase might be around $170 a month. You sign a one-, two-, or three-year hosting contract. If you pull out early, you owe the balance of the hosting cost. For now, however, Blockware is probably best for anyone willing to make a more serious, long-term investment into the mining space. But if you’re in that category, the fact that availability is steady and hosting takes place at company-owned facilities might make it a great choice.
Bringing It All Together
Whether you’re already deep into the crypto space or looking to get started, mining can be a terrific strategy to have at your disposal. By generating crypto at a relatively steady rate, mining helps smooth out any price volatility as you add to your holdings. It can provide new coins with complete privacy and security. And it can help you support the crypto movement while getting an inside look at how the ecosystem actually works.
Moreover, it is now very easy to start mining without all the drawbacks of running rigs on your own. Each of the three companies profiled in this issue can help you acquire mining machines and have them hosted and maintained at competitive rates and with very little effort. That said, given recent price gains and the China ban, crypto mining is especially hot right now. Couple that growing interest with ongoing supply chain issues, and lead times and costs could be higher than normal.
If you’re interested in getting started quickly, we recommend reaching out to multiple vendors and/or checking websites frequently. Alternatively, you can keep this idea in your back pocket and look to implement it should any market pullback create better availability and pricing. While machine prices tend to rise faster than they fall, they are highly correlated to moves in underlying crypto prices.
Either way, crypto mining is something to seriously consider. And given my belief that bitcoin prices will ultimately hit at least $500,000, paying a premium to get started more quickly could prove to be a relatively small concern a year or two from now.