After the recent explosive growth in cryptocurrency, I can’t help but reflect back on my experience mining altcoins back in 2013. Bitcoin had become somewhat well known and was floating in the $500-$1,200 range and many alternate coins (altcoins for short) started popping up all over the place.
The concept seemed interesting, so I built a few computers that were designed to “mine” some of those currencies started learning as much as I could.
I sold much of the currency that I acquired through mining to cashflow the operation. It ended up being several bitcoins worth of currency at the time, but was sold off mostly in the $600-700 range in 2013. At a certain point, the mining I was doing was no longer profitable, as my computers used more energy than new technology that was constantly being developed.
So we turned off the machines and on one of my computers kept some bitcoin and dogecoin (one of the currencies we mined at the time).
Four years later, we see bitcoin rocketing from $1,300/BTC to over $17,000. I can’t help but think about what I might have done differently knowing bitcoin’s potential for growth. Realistically, there are three steps to any hugely profitable investment:
1 / Have A Great Idea or Think of Something Interesting
To start out, you have to have the idea that others might not have yet. A piece of information, some intel, or perhaps just a thought while comes to you while showering that makes you think getting into something might be a good idea.
Once you have the idea, you can research it a bit, find out as much as possible and then move on to the next step.
2 / Execute On Great Idea
This is a critical stage of the process, where you actually have to execute the great idea. 99.9% of people fail here when it comes to investing—they never take action on an interesting idea they had. Perhaps they don’t have the funds to invest or fear losing money on such a thing.
In this step, you have to actually buy the stock/coin, make the bet, or figure out a way to leverage a potential outcome over a period of time. Doing this, moves you on to the final step.
3 / Have Patience
This step is the difference between making 10% on a decent trade or investment and making 2,500%—having patience enough to let your idea fully play out and see where it could take you.
A big part of this is being financially stable enough to not need the money you may make in the short term and to just keep on holding. Part of the reason I kept my own bitcoin for so long was that it was inaccessible—on a computer in the basement, disconnected, for almost four years.
When bitcoin started rising rapidly, I figured I should at least figure out how to control the money I had stored.
If the idea was great, and you executed on it, and you have patience enough to wait for it to potentially come true, you will be a successful investor.
If you only have two of these things, it’s likely that you won’t get very far at all.