For the first time in my life, in September of 2017, I had disposable income. Not much, but enough to play with. Since I am an ambitious sort of lady, I wanted to turn my small amount of disposable income, into more disposable income. I thought about investment properties, but the initial investment was too much, and I didn’t want a second job, so cryptocurrencies it was!
The journey began with the struggle in acquiring cryptocurrency, then storing my cryptocurrency, followed by trading on the exchanges with some research into technical analysis. I then decided it was time to diversify and learn how to mine cryptocurrency with GPU and ASIC mining.
Acquiring Cryptocurrency
Obtaining a Verified Account on an Exchange
To exchange my fiat currency (e.g. Canadian dollars), into cryptocurrency, I needed an account on an exchange that allowed me to fund my account in CAD. The two I experimented with were Kraken and QuadrigaCX.
Getting verified on both Kraken and QuadrigaCX took approximately a week, which felt more like a decade seeing as how I was eager to get started making a fortune. This process requires pictures of your ID, pictures of you holding your ID, and sometimes statements to verify your address. By the time I got to the end of the verification, I thought I was going to have to give up my first born.
Funding Accounts with CAD
Kraken was the first account I got verified, and to fund my new account, I was limited to wire transfers. This felt like shady business to me, but with my minimum (at the time) deposit of $100 CAD, I didn’t feel too concerned about my transfer being lost to a scam. Eventually, after more than a week of waiting, my CAD funds showed up in my account, and I was able to trade my CAD into the tiniest amount of Bitcoin.
QuadrigaCX was another experience. There are more CAD funding options with QuadrigaCX, and the funding option that I enjoyed the most (because who doesn’t enjoy instant gratification) was INTERAC Online. At a fee of 1.5%, you too can instantly (upon verifying your account) fund your QuadrigaCX account in CAD! I do believe some people struggle with this option, due to their debit cards containing a VISA logo on it, which then makes it impossible to use for INTERAC Online funding. However, my trusty Royal Bank debit card, does not have the blasphemous, VISA logo on it, so I have been able to make numerous funding transactions.
Trading CAD for Bitcoin
My first mistake when converting CAD for Bitcoin, was using the quick trade feature on the dashboard of QuadrigaCX. This option, even though it is quick, gives the user less control over the price of which you purchase your Bitcoin. The less convenient, but more powerful option, is the trade tab, which allows you to list your Bitcoin buy order, for the price you want. If you are patient enough, you can put a buy order in, that is about 3-5% lower than the current exchange rate, and more often than not, your order will go through at some point in a 24 hour period. Don’t take my word for it though, the market is volatile and could turn into a bull market at any time, and then you are sitting on a buy order that never got full-filled.
Storing Cryptocurrency
Huzzah! I have acquired Bitcoin! I wanted to shout it to the world, only that would just let all the hackers know that I have some to steal! That’s when the paranoia really set in. The first step I took to secure my newly obtained Bitcoin, was to secure my QuadrigaCX account as best as I could, and that meant a complex, meaningless, password, and the use of 2-factor authentication with Google Authenticator.
When I shared my news with my blockchain friends, the first thing they all said was “never store your cryptocurrency on the exchange!” Apparently, exchanges are frequently attacked, and in some cases, the attacks are successful. So I had to learn the options of safer cryptocurrency storage: cold storage, software wallet, and hardware wallets.
I won’t go into great lengths about wallets, but I will say that a wallet is an account for a currency, and is comprised of a public key, and a private key. The public key is what you share with the world, in hope that someone sends you funds. The private key is your secret signature that signs transactions of funds leaving your account. It is important that your private key... well... remains private.
Cold Storage
Cold storage requires you to get your public and private key printed/written out on paper, sometimes on different papers, and sometimes on opposite sides of the same paper. Either way, the codes are copied down on paper, etched in stone, cross-stitched onto a pillow, or tattooed on your body (but remember to hide your private key, on somewhere more private on your body). The wallet, or account, is then deleted from your computer. I don’t have any experience with cold storage, so I will leave it at that.
Software Wallet
The software wallets are usually what people first get, and there are wallets for each coin, and wallets for multiple coins. This option terrifies me for a couple reasons: computer malfunctions, and someone hacking my computer and obtaining my private keys. The former can be alleviated by creating a cold storage copy of the wallet, and the later can be alleviated by having a computer dedicated to storing cryptocurrency and always disconnected from the internet when not actively sending funds.
Hardware Wallet
If you end up deciding you are going to have a, single purpose, computer dedicated to storing your wallets, then you may end up with the option that I chose: hardware wallets. In my limited research, and limited amount of money that I wanted to spend on a hardware wallet, I ended up purchasing a Ledger Nano S. This trusty little device stores the public and private keys, and allows me to access my private keys on any computer that can download the Ledger Chrome Apps. The Nano S allows for a limited amount of accounts that I quickly used up when I started to dabble in multiple altcoins, so eventually I bought a Ledger Blue, and gave my Ledger Nano S to my mother (sometimes I pay her for babysitting in Bitcoin). I’m happy with the Ledger Blue, but do feel they missed a couple obvious opportunities. For instance, you would think there would be a way to check the balance of your coins as of the last date synced, but alas, this is not a feature of the Blue. Another popular company for making hardware wallets is Trezor, so check them out too before you decide on which product to purchase.
Trading and Technical Analysis
Trading requires obtaining an account on an exchange (which requires more verification) that has low fees, and many cryptocurrencies. The two exchanges I was able to get an account with was Poloniex, and Bittrex. Poloniex has some lesser known cryptocurrencies, but Bittrex won me over with their straight forward trading user interface. The charts on Bittrex were easy to access and understand, once I learned a little technical analysis. My go-to charts were the MACD (looking for W’s to buy, and M’s to sell) and candlestick charts. I highly recommend taking a cheap Udemy course on technical analysis, to gain confidence in your trades and find a strategy that suits your personality and amount of time you wish to dedicate to trading. My overall activity when trading consisted of: checking a couple charts, placing a buy order or sell order at the price I desired to buy/sell at, then setting a price alarm on my Delta app. I would only check on my accounts at the start or end of a day if my alarm went off through the night or while I was at work. I did very well with my strategies while the market was hot, but slowly lost interest.
Passive Income with Mining
GPU Mining
With my waning interest in day trading, I decided to explore other opportunities with cryptocurrencies that could still generate me income, but required no day-to-day involvement. What made me pull the trigger on getting into mining, was the fact that my husband desperately wanted to build a new gaming PC. When I asked him “what GPU do you wanting to get?” he responded very cautiously with “I want a 1080 TI.” Can you imagine his surprise, when I told him he could have two 1080 TIs and he has to buy me two 1070s as a small upgrade to my own PC (which I don’t game on).
Four GPUs later, when all was up and running, we decided to go with mining Zcash on the mining pool, NanoPool, achieving ~1.5K sols. I do have friends and family that are happy using NiceHash, but I’m not sold on it. I’m also not fully satisfied with the return on investment of GPU mining, which is why I have yet to build a dedicated rig, but if you are going to build a gaming PC to game, you might as well throw in an extra GPU for mining.
ASIC Mining
Once I received my first payout from the mining pool, I was hooked! How could I mine more? How could I mine faster? I love the idea of letting my PCs run when I am not using them, and generating an income from their computing power. A quick search of the web, and you too will find that Application-Specific Integrated Circuit (ASIC) machines are the way to go. These are smaller computers that have a single task, and that task is to solve the single type of algorithm that the circuits were designed to solve. The most well known, and somewhat notorious, company for building and selling cryptocurrency ASICs is Bitmain. Bitmain refers to their ASIC miners as Antminers. They have Bitcoin Antminers, Litecoin Antminers, Dashcoin Antminers, and now Sia and Monero Antminers. Or at least, these miners solve the same type of algorithm that those coins use to verify transactions for a reward.
Before deciding what miner to purchase, it is important to look into what the public is saying about the miners on social media. Bitmain has been in hot water with many of their miners, and the community behind certain cryptocurrencies prefer the cryptocurrency to remain ASIC resistant. With hardforks of the algorithms, a miner could be rendered useless if the community decides to go that route.
Thus far, ASICs are accepted for mining Bitcoin and Litecoin, and so these were the two types of ASICs that I purchased. Over a couple months, I purchased three Antminer S9s (Bitcoin miners) and one Antminer L3+ (Litecoin miner). To run these miners costs an extra $100 CAD per month, per miner, on my energy bill. Keep in mind that this winter, my furnace has not turned on once! These machines generate a lot of heat! Running power to these machines is also not as straightforward as you would hope. They require higher voltage, and you will have to make your own power cable, so make sure you have a friend who has some electrical know how. I won’t go into details about how much I am profiting, because it fluctuates with the volatility of the market, but I will say that I am HODLING for when the markets are good!
Summary and Takeaways
I have been very fortunate in my experience. I entered in a bull market, cashed out at the height of the market in December 2017, paid for the ASIC miners and GPUs with profits, as well as some extras for the house and a family vacation to Disney World. So long as I believe I will make a profit on the mining when compared to the energy costs, I will continue to mine.
The best advice I can give people when entering the cryptocurrency markets, is to never put in what you aren’t willing to lose, and to research. Research the businesses behind the cryptocurrencies, research social media and get a sense of the public’s general view of the cryptocurrencies, and then be critical of everything you read. Why did someone write an article, post, or tweet about such-and-such coin? Do they profit from sharing their opinion? Are they trying to manipulate the market?
With that being said, I will say that no company paid for me to write this article, but I am experimenting with the Steemit community to see what this post will be worth. I have limited experience and knowledge in cryptocurrencies, but I was able to muddle my way through buying, trading, and selling my cryptocurrencies on Canadian soil. I hope what I have shared, can at least give others a head start on their own research, and please remember to be critical thinkers when ingesting all news about cryptocurrencies (or anything for that matter).
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Coins mentioned in post:
Never mentioned NANO. I was referring to the hardware wallet: Ledger Nano S, just as I had linked.