My Bitcoin Story - Chapter 1 - Summer of 2013 - Miner Drinking Habits

 

Here we are, as usual, a few good friends and colleagues gathered together on a sweet little terrace nearby the office, sipping on a beer while ranting about random gamedev topics and few crazy ideas.

A network savvy colleague is now telling us that he's been putting together some old PC parts to "mine" bitcoins. At that time, Bitcoins were "trading" for about 100$ a coin, and our "mining" friend proudly shouted that he had accumulated almost 50 bitcoins with his homemade setup.

That's about 5000$ created from dirty old beige cases stuffed with cat hair and dust mites.

"My machines are now casually generating a constant flow of digital money from home, while I'm here, siting with you, enjoying a soothing pint of Blanche de Chambly and eating deliciously cheesy nachos. :)"

"Interesting... you got our attention sir, please do tell us more!"

"And share the nachos you bastard!"

And then he began, explaining in details all the inner workings of his fascinating bitcoin crypto mining experiment. Until then, we literally had no idea mining bitcoins could be this trivial, at least from his own perspective, that's how it felt, any dodo could do it. But holding and exchanging bitcoins for real cash was more like doing a con job and at times was a real pain in the butt... As we all had a raised eyebrow and many fundamental WTF questions. A lengthy and profound discussion ensued.

We already knew the infamous bitcoins were solely used to buy all kind of crazy illegal shit on the darkweb, weapons, drugs, bodyparts, stolen credentials, you name it (silkroad came to mind) but how the actual value creation and mining worked was alien to us. And bear with me, crypto trading and exchanges were not a commonly discussed topic and mining was as mysterious as it could be. And off course, we can forget about the whole decentralized finance, NFT, web3 BS ... None of this existed in 2013. The term "blockchain" wasn't yet unfolded into this goto viral marketing buzzword that is nowadays spreading out faster than a corona virus.

Anyhow, we kept discussing about the bitcoin value, volatility, its limited supply, and naturally we became very skeptical and realized how profoundly sketchy this whole bitcoin mining thing was going to become.

"So in short, you spawn new bitcoins into existence by letting your CPU run super hot solving cryptic math puzzles and by validating other bitcoins mining transactions which are stored on a slow, immutable, distributed database called the blockchain?"

"Yup, that's it!"

"Awesome! And who decides what is the equivalent value of one Bitcoin converted in USD? What makes 1 bitcoin = 100$ today?"

 

"Hmmm that's a good question... I'm far from being a financial expert, but for sure its value is somewhat following the market. So basically, if the prices of guns, drugs, kidneys and the like goes up because there's scarcity and heavy demand for those beautiful things, then the value of Bitcoin will go up. There might be some kind of bitcoin GDP or whatever based on the amount of shit available on the market...I frankly don't know"

 

"By the way, you can apparently buy a pack of chewing gum using bitcoins in some corner stores so it might be more than just that..."

 

"So it's basically an autonomous digital money printer with an endless supply of ink and paper. Its value is being attributed by an underground illegal market. And this money making machine can keep the mining and transaction validation loop running forever within its own unregulated encrypted ecosystem, no humans involved... That's just fucking insane!"

 

"ROFL!! That all sound totally legit!!"

"Hahaha!!! "Shooters!!!"

At the time, exchanging Bitcoins for actual cash was as fraudulent as it could be. (Perhaps no more than today when you think about it...) I'll just skip the details, but in short, you could use some foreign bitcoin exchanges, but you had to hide your transactions from the eyes of the financial authorities using a VPN and some reloadable prepaid credit cards.

Since this bitcoin business was all happening in a very dark and grey area where no suits were even aware or remotely grasping any of this underground banking system, no one was able to say if this mafia wallet was to get legitimized in any foreseeable future. Technically speaking, knowing how slow our governments are at watching over their own population best interests by busting their own fraudsters, this massively fishy bitcoin enterprise could last and largely expand for many years to come before any legislators and regulators would even start to get noticed.

[Pause PP]

"If only this whole mining business was used to solve actual real world problems instead of solving meaningless puzzles. Like that folding@home distributed computing they are doing for the research on E.T. and whatnot."

"Hahaha! Nope, the purpose of a miner is solely to create money!! MoneyMoneyMoneyyyy!!! As fast as it can. And anyway it's just too fucking dumb of a system to foster any positive side effects without totally nerfing its core efficiency."

"Can we at least harvest the heat from the mining PCs and do something useful with it? Like I don't know, bake cupcakes, reheat dinner or perhaps even brew some tea?! We could design a fancy all-in-one oven type of PCcase that might look swell over a kitchen counter. Anything at all!?!"

"Nahhhh... PC mining is pretty much dead now, there's a bunch of new tiny ASIC computers coming up that are way cheaper and have better hashrate"

"ASIC? Hashrate?"

"Hashrate is the computations per second, the power of the machine at decrypting crypto if you prefer."

"ASIC is short for Application Specific Integrated Circuit. They are essentially dumb down computers with CPUs tailored to do only one type of computation, like a math coprocessor, but they do it very efficiently. They are designed in a way that you can easily connect, pack and rackmount thousands of them in a network array and store all that shit in a smaller, climate controlled server room."

"They can stack pretty well in tiny freight containers, and are easier to stash secretly somewhere on the north pole, in Alaska or Greenland, benefiting from cheap electricity and passive air cooling."

"Perhaps one day they will put them under the ocean like what Google and Microsoft are now doing with their new data centers..."

"For fuck sake! Lets melt the icecaps and heat up the sea to accelerate our downfall while off course making sure the bandits get some extra cash and fancy cars! Ohh man, humanity is sooo fucked... *burp*"

"Holy shit! Look! Look at that!! It's a Tesla!!"

"Niiiiice!! Man, theses electric cars are so silent... swoooshhh.... no noise, no smell, I love them!"

"I bet he's a rich mafia banker running a bitcoin mining business and owning a Tesla gives him the sentiment of having at least a good environmental conscience!"

"Hahaha!! Beers?"

"Beers!!!!"

 

We then derailed, drank a few last pints and speculated on the idea that the bitcoin algos might be modified to crack real passwords and hack some bank accounts instead of only playing with puzzles...

 

"hmmm... silence! Someone might ear us and steal our evil plan!!! Mouhahaha!"

At the end, we all came to the conclusion that Bitcoin was a fraud and that this silly tech venture could not scale up very far without turning into an gigantic energy burning, dirty money generating, trash hash cash machine made by and for sloppy bandits. It was just a matter of time before it would get busted.  

 

"Oh fuck!! I almost forgot!! Bitcoin is an endless money making machine after all! There's a limited supply of 21 million bitcoins that can ever be mined!"

 

"What????"

 

"Yeah! And when all the bitcoins in existence ends up mined, its global market value should theoretically remain stable like some kind of digital gold. No transactions, no exchanges, no mining, no volatility, just pure useless stability! Hahaha!"

 

"After that point, the second someone who hoarded millions of bitcoins decide to exchange them back for cash, boom!! It will crash the whole bitcoin economy!"

 

"Ohh boy..."

"Bitcoin is the perfection of a Ponzi Pyramid!"

 

"Fuck this shit man! *Yawn*"

 

"It's late, time to pay the bills."

"That round is on me guys! Bitcoins just went up 20$ while we were drinking!! Belch..."

"Ahh Fuck off man!!"

"Gnight all!"

I had a weird dream that night. The ASIC miners were spitting out real physical dirt blocks that were used to construct a huge pyramidal structure somewhere in the north-pole, a guy named Satoshi, the architect of the pyramid, was dancing on top of it holding a cardboard with the word PONZI written on it. He had red lasers shooting from his eyes! Scarrrrrry!!!

Based on a true story. The dream bit might be a soft fantasy. It's kinda hard to precisely recall all the details of such vivid dreams. ;]

Disclaimer: This was my first authentic, naive discussion about Bitcoins.

Back in 2013, I did not foresee how life changing this crypto thing would become. I still cant sleep over all the potential luxurious lambos I missed by loosing my digital wallet...

 

To be continued...