I'll tell you a crazy story about how a post in one of the subsections of a highly specialized forum led to the emergence of at least one billionaire (!) And several multimillionaires.
On April 2, 2011, a topic with a laconic title appeared on the 2 + 2 forum: “Bitcoins – digital currency”. Its creator was interested in the question of whether this idea has a future.
From 2000 to 2015, the 2+2 forum was a main attraction for professional poker players. I have made many friends through the forums. Communication went on 24 hours a day, seven days a week, and the topics discussed were very diverse – from poker to politics.
One of my favorite sections on 2+2 was dedicated to business, finance and investments. They wrote about everything from real estate to trading. And then on April 2, 2011, the legendary topic about bitcoin appeared...
In 2011, I read the section regularly and had great respect for the business and investment advice of contributors. I remember very well how I came from somewhere on vacation, opened 2 + 2 and saw a topic about bitcoin, in which there were already several hundred messages. After scrolling through the first couple of pages, I thought: it looks like nonsense, and flooded with comments, it takes too long to figure it out, I don’t want to spend hours on it.
That was a HORRIBLE mistake lol.
To invest in bitcoin in 2011, you had to be interested in mathematics, economics, technology, and politics, as well as being easy with high-risk investments on the Internet.
Online poker players fit this profile perfectly.
Of course, opinions were divided: there were many votes both for and against bitcoin. Here are some examples of messages from pessimists:
I don't understand if all these people are completely crazy or just very stupid
Can someone explain to me how this works? I looked at the articles, but did not understand anything. What the hell is going on, who's buying these coins? Who is selling? What the heck?
Who finances bitcoin? You can't just make money out of thin air. What is Paypal doing with bitcoins that people exchange for cash?
One of the regulars of the forum, who wanted to understand how everything works, wrote:
Can someone send me some change to 1KD5XJy1RVrokUWQ4AR7mh5Nw1MZDeekdt ?
Pretty quickly, he received 5.67 BTC. Today's change price is about $220k.
There are also very insightful posts on the front pages – surprisingly accurate forecasts of the future fate of bitcoin, stories about the creation of the first mining farms, trading operations, and so on. These same people were in the forefront when NFT, Defi and so on appeared.
I don't want to name names, but some players got an insane amount of bitcoins during those years. Their portfolios are now in the millions. And it doesn't surprise me that many of the top traders, investors, and cryptocurrency experts got their start in poker.
Venture capitalist Marc Andreessen once said (sorry for the inaccurate quote): "Invest in what nerds do at night and on weekends." Some 2+2 readers did just that, investing in bitcoin when it was only 70 cents. A good confirmation of one of my main life principles: "Luck is a skill."
Be curious, be open to everything new and surround yourself with the same friends. Sometimes I got it, sometimes I didn't. I failed to buy bitcoin at 70 cents. Luckily, I got a second chance two years later when the first bitcoin-based poker rooms opened, but I'll save that story for another series of posts.
I keep in touch with many of the poker players who read the bitcoin thread on 2+2 in 2011. Some of them bought BTC, some didn't. The moral of this story, it seems to me, is that you need to be open to everything new and not miss promising opportunities. There are risks in any investment, there are never guarantees, but this is no reason to stay away.
The topic "Bitcoins – digital currency" has grown to 48,352 posts and collected more than four million views. You can read part of the history of poker and cryptocurrencies at the link to 2+2 (https://forumserver.twoplustwo.com/30/business-finance-investing/bitcoins-digital-currency-1011408/) (opens only with VPN in Russia).
From a twitter discussion
Yeah, I remember back in 2012 or 2013, when Alex Weiss and I were both grinding hyperturbo highstakes, he literally demanded that I put all my spare money into bitcoin. And why didn't I listen to him? But I had other friends who heavily invested in bitcoin...
Yes, Alex Weiss was definitely ahead of his time!
The Catbird Seat
In 2011, many people from my circle invested in bitcoin, but I decided not to mess with it. I feel bitter about the lost profit, but it passes as soon as you think that you would definitely sell your bitcoins far from the peak. At some point, their value would become too high relative to other assets, and I would definitely sell almost everything, because I am not ready to take such risks. Although it's a pity, of course, a pity...
I agree, it is very hard to keep from selling. Only unique gamblers are capable of this. In poker, however, there are enough of them.
Selected posts from the topic on 2 + 2
The economics of mining, pros and cons
Finally I was able to find adequate numbers for an amateur miner:
“Slightly overclocked 5970 + 5870, the mini-farm for mining worked 24/7 and consumed ~ 550W. 400 kWh came out per month, it cost me 80 euros. I also mined on my home computer, which I also used for other tasks, he usually mined cue ball only at night. In total, I mined about 400 BTC per month.
So I was making ~$150 a month with ~$1500 worth of hardware that I can sell for residual value when it becomes unprofitable to mine.”
On other forums, people write that they collect farms from more than 20 boxes with 4x5970 in each. It seems that if you invest heavily in equipment, it will pay off in about 12-18 months, subject to reasonable electricity prices.
I will refrain.
I also figured something out. The performance of a farm of 150 computers with decent, but not top-end video cards, I estimate at 7470Mhash / s. At the current difficulty level, waiting for one block of 50 bitcoins is 13.2 hours. Taking into account the cost of electricity, the profit from one block will be approximately $20. In a year, such a farm will produce 663 blocks or $13,272. And this is on ordinary computers that are not specifically designed for mining.
My friend has access to 150 of these machines and does not pay for electricity, so his expected profit is about $26,000 if the price of bitcoin stays the same.
The optimal video cards for mining are sold out everywhere I searched. Recommended hardware with two graphics cards costs $1,678 and consumes approximately 750W. They have insane computing power, you can get 1.29Ghash/s, that is, one block in 76.19 hours. The net profit from one block is approximately $30, and the annual profit is $3,450. The equipment pays off in six months, then we work in plus.
In general, if you have access to free electricity and computers, you can earn good money with almost no effort. If not, it looks like a waste of time.
Money from thin air or virtual gold?
If I understand the law correctly, bitcoin is a virtual commodity, much like a sword in a multiplayer computer game. Therefore, if the state wants to put pressure on sites that are engaged in the sale and purchase of bitcoins, they will first have to recognize bitcoin as a real currency. Much before they decide on it, bitcoin will already gain critical mass and spread everywhere, and it will be too late to fight it.
I think making small payments with bitcoin is more efficient than the usual way. The commission in dollars for small transfers is too high. In addition, transactions in bitcoins are irreversible, which is very convenient. Therefore, the companies that provide various services on the network were the fastest to evaluate bitcoin.
Money is just a convenient way of exchange. Bitcoin is rare and easy to handle, so people can use it just like money. Also, gold in World of Warcraft has become an analogue of the currency in the real world. Yes, and real gold is valued not because of its industrial use, but solely because of its rarity.
At first, I was skeptical about bitcoin, but on reflection, I found a lot more similarities with gold than it seems at first glance.
The total number of bitcoins in circulation is limited and of course. The amount of gold is also limited, although we do not know its amount. It is valued for its rarity. Unlike bitcoin, gold has an industrial use, but it has little to no effect on value. Gold is just a rare stone that everyone liked. A lot of energy and effort is also spent on its extraction, and the ingots are stored in safes under guard. That is, gold needs physical space and constant protection. Hard drive space costs a lot less – this is where bitcoin has an advantage.
Application of bitcoin
Red Man Plus
This is the best topic on the forum in its history.
Peer-to-peer + cryptography = decentralization is the future.
Bitcoin or other cryptocurrencies are sure to take off.
An obvious use is peer-to-peer rakeless poker. My guess is that 90% of online low stakes poker will migrate to rakeless P2P networks in the next few years.
A poker client without a central server (current poker clients link to Costa Rica, Canada, the Isle of Man, etc.) will allow players to organize their own game, the load will be shared among them all. No government can attack or shut down such a poker network as it will be everywhere. However, we need to solve the problem of vulnerability (so that no one sees other people's cards), as well as the speed of transactions (10-minute money transfers are not good for poker, we need to play several hands per minute).
The story of a billionaire?
It's a little boring to read the same newbie questions about how the Bitcoin economy works. I will share my experience and boast a little.
I have been involved in bitcoin for about a year now. As soon as I found out about it, I immediately realized how promising such a cryptocurrency is. I advised all my friends to go to an online exchange that accepted PayPal as soon as possible and buy at least $100 worth of bitcoin. Then it cost 7 cents per coin. No one laughed in my face, but only one person took the advice.
There was a limit on the exchange, I don’t know, from the exchange or from PayPal, but I could not spend more than $500 per day. I set myself the goal of collecting 210,000 coins – 1% of the maximum number of coins in circulation. Along the way, I had several setbacks. So, I spent 25,000 coins ($1,500) to pay for the development of a site that never opened (due to my fault). Of course, I gained a lot of experience and many friends, which is much more valuable than $1,500, but I'm not sure what is more valuable than $30,000.
I currently have a 4x5970 farm running in my basement. Works well.
If I misjudged the potential of bitcoin, then I will only lose money. Think about it. It's like catching a flush when you know for sure you have outs.
I see several opportunities for the widespread use of bitcoin at once:
1) gambling. The cost of transferring money between banks is too high. Fast, cheap and anonymous transfers offer a huge advantage.
2) drugs. I have never bought them, I have no idea about the logistics, but I know that many people like drugs.
3) pornography. I don't use a credit card to pay for porn—I don't want to leave my number anywhere and my wife doesn't know anything. If I see a hurricane webcam beauty, I make a quick anonymous payment. I think this is generally one of the main reasons why Bitcoin was able to take off.
4) taxes, divorces, moving to other countries. I don't think I need to explain anything. When you run away from your wife or the country, you don't have to carry $50,000 or 30 ounces of gold in your pocket. You can go even in a torn T-shirt, and the encrypted wallet.dat will be waiting for you somewhere on the Internet.
My main fear is that Google will try out the idea and launch their own cryptocurrency, which they will call gcoin. I think this is the end of bitcoin.
Right now, I'm extremely far from my goal – I have a little over 50k coins, and I'm mining about 100 a week. There is also an option to buy several thousand coins at 50 cents, which expires in a couple of months. I do not plan new large purchases – the time has already passed. I also own several potentially valuable bitcoin-related domain names.
When the price of the coin reaches $50, bitcoin as a whole will be worth a billion. Gambling + drugs + poker + other black market >>>> billion dollars. Right now the coin is worth about $1.50, but what happens when it gets featured on the WSJ or CNBC? For a rich hedge fund, throwing $100k or $200k into the market is no problem at all.
Bitcoin is a new way to anonymously send funds. I don't believe there is no use for it.
Bitcoin Price Forecast, 2011
Complete failure due to technical errors: 30%
Coins are worth nothing, because due to an unrecoverable bug, they either cannot be sent at all, or they can be sent to several addresses at the same time.
Failure due to politics: 10%
The enraged government shuts down the network, kills, imprisons and tortures bitcoin users. The coins will be worth something, but not too much. But there will be nothing to buy on them, since under such a government there will be no Internet either.
Stay where it is now: 0%
This is simply not possible – there are too many people involved in the development of the bitcoin network and newcomers come every day. There will be no pause.
Small success: 20%
Significant share in online payments and black markets. Conquered poker and gambling. Weak use in everyday life. The total price of all bitcoins is $1B. One coin costs approximately $50.
Big success: 35%
Circulation on par with traditional currencies. Free conversion for everyone. In many countries, bitcoin can be used to receive a salary, pay for an apartment and food.
The total price of all bitcoins is $100B. One coin is worth approximately $5k.
World Domination: 5%
People no longer understand how they could endow paper money with any value. Governments still exist, but deal with administrative matters. Bitcoin is the universal equivalent of money.
The total price of all bitcoins is higher than the total value of all currencies in existence today. One coin is worth more than $1M, most likely even several times.
Given the likelihood of the latter scenario, my personal estimate of the future value of one coin is $50,000. Now you can call me crazy.