Solar Powered Crypto

I hear that’s a very good place to start.

I’ve taken some of the downtime that fall brings to recalibrate.  Certainly most projects take longer and cost more – this is not any different, or is it?

I’m attempting to flip my life upside down – similar to the prospectors who flocked to the west during the gold rush, I’m presented with an opportunity to potentially change my life (and that of my family) forever.

Though as I sit here I am full of worry.  What if this, what if that…

So, when I get like this, I turn back to checklists and data to check on progress and verify that I’m on the right track.

When I look back to these past few months and really back beyond that to these past several years, I’m struck with how many milestones went unnoticed.  The sheer fact that I know how to do this stuff put me in a pool with only 13,000 people world-wide when I started.  Certainly I haven’t gone on to found the next best crypto project or made a huge name for myself (yet) but the fact that I’m still here, with my initial investment active means a lot.

In other words I haven’t yet been fully REKT thankfully!!  So I must be doing something right.

But it isn’t only about me. I need to thank the crypto community for being so resourceful and welcoming.  I know of people who make a living on crypto and I know people that got lucky buying meme coins at the perfect time.  But I also know people who struggle paycheck to paycheck.  People who don’t have money in their savings accounts. In fact, I know people who don’t even have a savings account.

Since crypto is a worldwide community that grew ever so gently at the beginning, members are afforded a very wide reach.  We have the ability to quickly get in contact with most innovators of projects of varying degrees of success.  The equivalent of big business CEOs are reachable via our network.  You can connect with nearly anyone and ask nearly anything.  It’s this open nature that I hope will bleed into common commerce.

I can appreciate where the industry has gotten too, but only when I expose the approachable nature of all these projects.  Crypto is people: People who develop needed technologies to replicate an overly complex fintech ecosystem with digital currencies.  People who are open to answering questions, no matter who may ask them, and no matter the mundane nature of the questions themselves.  People that understand that in order to build better one must truly hear from all the stakeholders.  People who understand that the contrarian point of view is even more important than their own.  People who learn from others who disagree with them.  These are my people and thank goodness I found them!  Or did they find me?

I started simply and will continue to build upon this approach.  All I want is for my income to not be tied to the number of hours I work.  Simply because I am not always going to be able to work as many hours as I do now.  Folks refer to this as “retirement” and I must plan for that now since I wont receive a pension nor were any of my American ideals, entrepreneurial efforts, and sweat equity ever rewarded appropriately.

This is not a fallacy as many folks currently have their money actively making more money.  There’s a saying that “wealth begets wealth.”  It’s sad, but the more money you have, the more money you can make without working.  The fiscal elite build walls of gold bars and insulate cash with large unscalable facades called corporations.  These are their sources of revenue, their wealth collectors.  Whatever the methods, there are ways to get your wealth working for you.  Real Estate is a prime example: you can rent an apartment and your property literally pays for your life.

But with me, it’s different and from my perspective it’s simple.  The stars have seemingly been aligned in the proper order to give me a way to gain fiscal independence without investing more than I already have.  I realize now as I sit in the middle of a lull, it’s time to pick up the pace as the market seems to be getting ready.

I realize at this moment that I haven’t let you in on my plan.

The Long Term Plan

I mentioned early on that there are several tracks that I’m rolling on at once.  I have my foot into many unique crypto-based elements that once pulled together, should knit the fabric of my own wealth collectors.

I’m a jack of all trades and a master of none.  My wide and not so deep exposure is similar when it comes to my knowledge bases.  Because of my college education and how I obtained it, I’m missing key ingredients and I realize I must go back to school to learn more specific things.  Not to get a degree, but to expand my mind in the proper directions.  My long haul goal is to free up time during the day so I can properly learn economics, statistics, global finances, quantitative trading, and understand the terminology behind the fleeting socio economic concepts I am able to glean out of context clues.

Once I am able to properly learn, I believe I’ll be able to take this to the next level.  In order to make this happen I must step back and realize that my day and mind now is far too clogged to allot the proper mental space for new learning.  I’m sure it will be difficult and freeing that space in time and mind will be tricky; the largest amount of time I spend on anything is what is usually called “working”.

I “work” longer per week than I do anything else except sleep and man do I wish I could have even just a little of that sleep time back – I feel like I’m dead ⅓ of my life.

Why Do I Work?  

Why does anyone work?  (Assuming you are in the USA,) to earn USD, right?  We all take the earned USD (minus the income taxes) and pay for the things we need, eat, drink, want, and do.  Folks work so hard for so long to lessen the time per week they need to work and at the same time maximize the amount of USD they receive per each hour of work.  This is the American Dream – climbing up the ladder of success.

So, what if I could earn the USD I need to live completely without spending 60 plus hours a week working?  What if I could put together a plan that would have my house act as some of my wealth generators?  How far would that go to lower the overall weekly hours I spend “working” and increase the weekly hours I spend LIVING?

That’s my goal and I know it sounds ridiculous.  If you are still reading this I thank you for not dismissing me as a loonie.  I do however sit here at a “go” / “no go” point in this project.  I have collected enough data to be able to surmise if this is possible and if so, how far away am I from achieving this goal?

My house will be alive!

The End Goal

It’s important to keep your sights on the end goals and this project is no different.  Once I’m set I wish to have solar panels installed on my house.  They should be feeding a battery bank for energy storage.  That energy will not only be used to run the house’s electrical needs, but also to mine for crypto currencies.  I know this all is technically possible and thankfully the means to accomplish this task are within my grasp, the question on my brain has always been will it work?  Will the math add up?

Let’s think logically: I live in New England and get 6-8 hrs of sunlight a day.  That means that during the sunny daylight I should be storing enough electricity to keep everything running 24 hours a day.  I have to get enough solar panels to generate at least 3.5 x the daily electricity my house and miners will use while the sun is up.  The battery bank must be large enough to hold the unused capacity and a proper regulator must provide overnight power so the miners (and our fridge, etc) continue to run 24/7/365.  On top of that, I need to balance the generation of new crypto with the USD value to make sales from the newly generated crypto into USD pay our bills.

There are a lot of “ifs” in there…

The Solar Connection and Crypto

Solar itself isn’t difficult if you don’t need to get a loan.  Paying outright for a solar system is really smart because if it’s grid tied you get the solar credits allowing you  to capitalize on being the generator of much needed clean energy.  I don’t yet understand how it all works, but I’m sure I can figure it out.  Also, a solar company doesn’t own your roof.  So, if you get a leasing company to put up solar panels it might get tricky to sell a house when there’s tens of thousands of dollars of other people’s property nailed to it.

For one of the first times in my life I’m able to properly pay for a capital investment up front, thanks to crypto!  Being a HODLer of Bitcoin, I have had a sell target since the first satoshi I staked.  I’m aiming to sell a bit of my Bitcoin if/when it hits my first sales target of $100,000 per bitcoin.  I’ve heard rumblings all year that a six digit BTC will come before the end of the year.  The Technical traders have been saying the BTC price will be at least 100k before Q2 2022. I have heard of a 350k BTC and someone in Forbes just wrote about a 5 million dollar bitcoin next year.  But truthfully who knows?

Once Bitcoin is around 98k I’ll probably sell off what I need to fund the solar array and storage solution.  I’ll have them install and turn it on, plug in my miners and let it go to town.  But getting it to work isn’t a question I have.   The question is will it generate enough crypto to sell and provide sustainable USD to live on and plan for the future?  This is the question that I must emphatically answer positively before moving on.

Electricity and It’s Carriers

OK, here’s a funny thing – did you know you can change electricity providers?  I had only heard of this as a scam, but it’s actually true. Making the switch could potentially lower your electricity costs. But, it doesn’t go low enough for me to mine with grid electricity.

I picked the lowest electricity provider that I could find, 8.2 cents per KWh, amazing right?!  I was so excited and waited in anticipation for the bill which came to a grand total of $20 less expensive.  On a near $400 bill, $20 isn’t much.

When I read the fine print of my electricity bitt I realized that the electricity provider is only half the cost.  The other half of the monthly electricity bill is a carrier cost.  Those charges are as much (and now more) than the actual electricity costs.  For example, when I started out I was paying $0.24 per KWh (OUCH) – 12 cents of it was carrier costs and 12 cents was providers cost.

I changed the provider and the carrier cost increased…  Go figure…  I now pay $0.082 per KWh to the provider for the actual electricity and $0.14 per KwH to the carrier to “carry” the electricity from the provider to my house.  That means I’m down to $0.22 per KWh, still not able to mine with that in a way that would pay for anything with a decent margin.

In other words, I’d have to take on too much of a risk to get my big miners up and running on that kind of cost.  I will take this risk as it’s part of my next round of tests, but only for a few days at a time, in a controlled way so I can validate settings and assess next steps.

The Data Tells Two Tales

I have collected all of the data needed and am ready to share this answer with you.  No, it’s not enough for my house to become the main breadwinner of the family…yet.  It all depends on how many miners I can get running in correlation with an upward price of crypto for it to make sense.  I must also mine with solar alone since paying for electricity may be out of the equation as I found out that my residential electricity rates are the most expensive around.

No single strategy is reliable enough to make the money needed to raise my family but I think that several strategies enacted together can work in tandem to obtain my objectives.  I must adopt a proper strategy of “set it and forget it”.  I need to build on my successes by gradually and incrementally adding the missing pieces until all is set and automated.  I’m realizing now that this may be a several years’ project, but I’m up for the challenge.

You see, the results I found point to several successes that I can build upon, but the over-all unknown is the price action into the future.  So, while I can potentially build up a base of BTC mined by free energy, I don’t know how long it will take to pay back the invested BTC into the project.  Until I reimburse my initial BTC investment, this project will still be underwater financially.

Funny Money

This is a project that starts and finishes in the crypto sphere.  I will in essence “borrow” an amount of BTC from my prior gains and transfer that to USD to buy the solar panels outright (and pay the capital gains on the BTC / USD cash out.)

So to me, the reason to wait until BTC reaches around $100,000 to sell is because I will have to sell less BTC in order to net the USD for solar panels. Over time this approach will lead to less BTC mining to break even on my investment.  Allow me to explain…

Assume on January 1st, 2022 BTC reaches $100,000 and I go to sell 0.5 BTC into USD.  This would net me $50,000 and of that 20%-30% will be earmarked as taxes. This leaves me with $35,000 to spend on the solar installation.

I priced the solar setup I want and it’s around $30,000, so hopefully the USD inflation doesn’t kick that up too far before then.  I also believe that once the infrastructure bill(s) are passed by Congress, I’ll be able to receive several tax benefits. So perhaps the $30,000 won’t have a 20-30% tax burden after-all, YAY!

From my perspective, I have to mine 0.5 BTC in order to break even on my investment.  With the free solar energy I will eventually earn 0.5 BTC – but how long will that take?  I have no idea.  It could take a year, 2 years, or even a few months. This is where the test cases come in.

Since I’m unable to simulate this as there are far too many unknown variables, I must go on my gut and the data I have already collected.  I need to batch out the small-scale tests and apply them to larger scale potentials.  I must revisit what I know and parlay that into future potential and trust that my gut and math will both be correct.

What I Already Know

First off, I have been all over crypto – from its head to its toes.  I have done nearly everything there is to do and I have steadied my temporary focus on things I know how to do well.  There were things I did in the past that were stupid and mistakes I made without regret.  In crypto, I always start into something I don’t know how to do with a small amount of wealth, usually left over from a prior gain.  I run experiments by doing new things and collect data in order for my future efforts to target the larger of the yield generating activities.

Here are some facts that I have collected:

• I have mined with several types of machines, algorithms, and mined many coins.
• I have mined profitably on really expensive electricity.
• Solar Panels are on the Biden agenda to incentivise somehow.
• Many narratives point to Bitcoin doubling in price in the next 4-6 months.
• I have earned upwards of 400% APR weekly with BOTs in the past.
• I have generated yields upwards of 400% in-kind APR using many DEFI tools.
• I have many older mining machines that I can use as needed.
• I have bags of more than 200 unique assets that are mostly in profit.
• I am primarily stuck in the ETH DEFI ecosystem with really high gas fees to sell.
• I have branched into Avalanche and Binance DEFI
• I’m working on getting into Polygon DEFI.
• Fees on non-ETH DEFI are sub $1 for most transactions.
• Yield is high and incentives are great to migrate ERC20 assets onto other networks.
• Liquidity is lacking on Polygon and Avalanche currently as they are very new.
• Binance DEFI is the true wild west of crypto.
• dApps on Polygon and Avalanche aren’t yet stress-tested.
• I’ve had 14 miners going at the same time, managing them all easily thankfully.

As the above statements relate to my future efforts I don’t yet know because each element of this setup must be meticulously crafted and automated so that I can relax and live while my house hums, breathes, and provides.

But it’s not all positive, I must consider risks.  Though to me, risks aren’t that crypto will go to $0 or become illegal; it’s more an embedded technology risk.

The Quantum Conundrum

I don’t know how many of you realize we have been on the cusp of a computer-driven society-shattering reform for many years now.  A hidden potential game changer has garnered a ton of investment dollars over the past 30 or so years.  This is something that will change computing forever, though with each small milestone the potential outcome seems farther and farther away.

I’m talking about Quantum Computing and it’s not science fiction.  There are quantum computers out there now, but in terms of a risk to my project, they present a few.

Quantum Computers are computing devices that use a different type of processor. Without getting into the technicalities, just realize that they are at least 10,000 faster than a normal computer.

Assume a quantum crypto miner is created.  This will instantly make all other crypto miners obsolete.  Also, these computers may be able to break key cryptographic keys and infiltrate crypto itself.

This is a long shot risk for many reasons, primarily because in order to run a quantum computer you need to keep components submerged in a liquid nitrogen bath and at temperatures around 290 degrees below zero the electricity needed to run the computer would seemingly price it out of being an effective miner.

Bitcoin uses SHA-256 as does most of the internet.  There are rumors abound that the cracking of SHA-256 is potentially possible by a quantum computer.  If SHA-256 were to be cracked, BTC and other coins would be forced to change algorithms.  This would instantly devalue several million ASIC miners in circulation (including mine) leading to a ton of e-waste and a limping Bitcoin network while whatever new ASIC miners are built to support the algorithm change.

I put this worry in my slim to zero potential category, but it’s still there as a concern and it’s why I’m NOT ONLY going to mine Bitcoin.  My mining is going to be at least 4 coins deep with strategies to switch miners between coins based on current profitability.  But I’m getting ahead of myself.

The Math

The buck stops here. If I can’t pull this together and prove to myself it’s at least possible, I won’t be motivated to pull this final trigger.

Bitcoin and Bitcoin Cash are two coins I will mine.  They are only mineable with specialized machines that are loud and ugly looking.  They are called ASIC (Application Specific Integrated Circuit) miners.  The ASIC miners have motherboards that are properly laid out to be able to complete SHA-256 transactions quickly, efficiently and do little else.  As mentioned above, there is a risk that the SHA-256 algorithm might be abandoned, so there is risk in buying new ASIC miners.

The other risk when buying new ASIC miners is that they will become obsolete before they pay for themselves.  This means that the crypto being generated will be unable to pay for the electricity being used to run the miners.  This leads to illiquidity in mining shops and would almost certainly be annoying to handle.

This is why I adopted the strategy of buying one or two versions behind the current models.  There’s an interesting second hand market for these miners as large warehouse sized mining firms tend to get huge discounts by buying new rigs in bulk.  The economics of spending a massive amount of money each year may make sense if they are mining a massive amount of crypto.  I wish I had that problem.

These large mining companies pull down massive amounts of crypto and go through ASIC rigs like they are going out of style.  So each year, last year’s model is just slightly less efficient than the new ones and they refresh their equipment, getting rid of the old on ebay.  People like me buy up the old asic miners that still work really well.  Since these are machines that are built to run 24/7/365 without fail, it’s my experience that they are often worth the investment.

I’m a linux admin, so running old servers effectively is what I was bred to do.

The Verdict

While it’s not a slam dunk here, it does seem this is a good idea to continue forwards but perhaps not exactly as I originally intended.  Strangely enough, I started looking for one thing and I found another.

I set out to make my house my family’s breadwinner and I realized that is nearsighted.  Instead, I should be focussed on tapping these new assets as part of a larger picture.  It’s not going to be enough to throw solar panels and batteries on a house, turn up miners and bam, that’s it, we live happily ever after.  I’m still going to need to work, do things, invent, be collaborative, and most importantly utilize the newly created crypto in ways to maximize the gains at every stage.

I believe my project is a valiant one and will be viable.  I also believe this is doable for others who have the base knowledge.  Furthermore I believe a company like Tesla should invent a battery bank with in-built miners that utilize “extra” energy to mine rather than selling it to the grid.  Particularly when the “sale” of extra electricity results in credits to use electricity later – this is in essence what happens to some solar panel owners.  They use the grid as a battery to store future energy they won’t need as they have solar to run their house.

While mining with solar on my house is achievable, the more I look at my actual roof the more I realize there isn’t enough room to put as many panels that I want.  It’s certainly not going to pay like a full time job alone. But whatever does get mined will be funneled in for the rest of my life without a cost for the electricity.  That is truly amazing.  Once the panels are paid back by mining the BTC I will have a money printing machine attached to my house.  And it all will be mine, so if I move houses, it comes with me 😉

Once this is set I want to lay out a proper solar array in the middle of the Arizona desert and start mining for real. That’s when it’ll pay as a full time job, but baby steps.  Let’s see if it works first. I have a hunch that I’ll be writing another update to this project sooner than later, but for now, it’s back to the task list and nailing down one at a time.