Blockchain Circling the Drain?

I’ll admit that I too got caught up in the blockchain hysteria in early 2017.  Reading an article on Ethereum and how it was the wave of the future, I became very excited at the prospect of riding the wave of success, so I started building my own Ethereum mining “rig”.  Essentially it is a stripped down server with as many Graphical Processing Units (GPUs) that can fit on the board.  Mine has 6 GPUs capable of solving a combined ~160M Hashes/Second.  While this number doesn’t mean anything to the layman, it represents a decent system that *should have* provided a quick return on my investment.

After building out the machine, I turned it on in hopes of winning some Ethereum that at the time was valued at over $1000 each.  To my dismay, I wasn’t the only one who had this brilliant idea and learned that it wasn’t easy to win by myself with such a “low” hashing limit, so I joined an Ethereum mining pool, Ethermine.  The pool offered me the chance to actually win some Ethereum albeit in VERY small increments as I was splitting each won Ethereum with several hundred thousand of my closest friends.

I had the rig running for several months when all of a sudden I got an email from Ethermine saying my rig was offline.  Looking more closely at the problem, I determined that my rig had been hacked and the hacker had added his wallet in place of mine.  Since the price of Ethereum had taken a nose dive about this time, I decided to pull the plug on the machine.  To date, I had earned several thousand dollars of Ethereum above and beyond the price of the rig and electricity, so I felt good about myself.  I figured I’d just simply wait for the market to stabilize and hopefully the prices would go back up.

Well, I’m still waiting…  At present, the price of Ethereum is hovering around $450 and hasn’t gone over $500 in months.  I’m now learning that the broad speculation on all blockchain currencies drove the price up (supply and demand).  Unless something crazy happens to start a second boom, it’s doubtful I’ll ever see any huge profits.  While I won’t be quitting my job and buying a private island, I have gained other things from my experience.  Most notably I have a solid understanding of one of the most talked about technologies in IT today.  In building my rig, I learned a lot about the Linux operating system and building/maintaining servers, as well.  And I did make a little money in the process.

While I did get something out of my experience, I do not think blockchain is going to make anybody but the early adopters rich.  That being said, I strongly believe in the underlying technology, especially with Ethereum.  The smart contract idea could someday replace any situation where a third-party is needed to facilitate transactions — the possibilities are endless.  To my question in the title of this article…I do not think that blockchain is going away any time soon — to the contrary.  It is definitely here to stay and is only a matter of time before mainstream businesses rely upon it day-to-day — which could eventually get me to  my private island.