Ask HN: I make $30k/month thanks to Bitcoin. What should I do?

https://news.ycombinator.com/item?id=2632671

by anon84835 • 15 years ago

26 32 15 years ago

news.ycombinator.com

I am not here for boasting, but my question is purposefully meant to be provocative.

I used to be one of the biggest Bitcoin miners, back when the difficulty level was low enough that CPU mining was the norm. These days people mine with video cards but I am mostly out of the game...

Anyway, I have accumulated enough Bitcoins (73k BTC) and the exchange rate has skyrocketed so much ($27/BTC as I am typing) that I am currently selling on a daily basis as many as possible via MtGox. They have a limit of $1000/day, so I am effectively making $30k/month. (I do plan to report this income to the IRS and am about to hire a tax accountant.)

But the question I have asked myself is: what should I do with that money? Or what would you do if you were in my situation? I am a typical geek with a successful technical career: well-paid Senior Developer position, as an H1B visa holder, working for a large US company. I enjoy my job, but to be truthful I have always wanted to found a startup. However, as an H1B holder, I cannot start a company in the US.

If I quit my job I will be bored and run out of money after a few years.

If I return to my home country to found the startup I will regret the opportunities I may have in the US.

If I keep my current job I will regret the opportunities of not starting a startup today.

pharno• 15 years ago

well, you probably should get a place for many computers (good aircondition), computers with low end cpus, but a few really good graphic cards inside and mine again. Then with the leftover you could start a startup, make websites or host them, or you could donate them to some great open source projects you rely on.

schraeds• 15 years ago

He can't sell his bitcoins fast enough... Mining for more after it has gotten exponentially less lucrative seems rather myopic on your part.

2weiX3• 15 years ago

well.. if you'd like to get rid of them faster, sell me some (20 BTCs, or so) via PayPal. maybe I can get one of my US friends to direct transfer. being serious, as noone else seems to be selling and i cant access mtgox. if you'd like, contact me on BTCcommodities@googlemail.com

that said, i'd prolly cash out half and start a mining pool. get a garage/basement, invest 10k in some serious GPU shit and get at it. with the prices continuing to go up, you should come out ahead.

paraschopra• 15 years ago

Do you realize that " get a garage/basement, invest 10k in some serious GPU shit and get at it. with the prices continuing to go up, you should come out ahead." is not real value creation and goes in face of Economics 101? If people can make money out of nothing, I'd say it is a bubble which will eventually pop.

etherael2• 15 years ago

Assuming the commodity has value, it's effectively the same as gold mining, it's just that the work is completely automated. The only "money being made out of nothing" is due to quantitative easing in fiat currencies. Bitcoins must be mined, and currently at least the setup and administration necessary to pull that off in a way with decent returns is out of the reach of almost all people (not necessarily people here, though).

_arturh• 15 years ago

Keep cashing out until you have enough BTC to fund your start-up, don't act as if you had a million dollars, because you still don't have them.

It's hard not to have ideas for startups based on Bitcoins honestly.

You may be interested in putting some of the money you are making into ensuring Bitcoin is a success. For example, at the moment I think that MtGox predominance in the market is a bad thing for the future of Bitcoin.

Also, don't give BTC to people who just ask for them, like me: 1BNbVQBhfb8G4yG81bbcXWQmt7uDLrVrk3

anon848352• 15 years ago

To clarify, I don't actually think I will eventually run out of Bitcoin wealth, as I expect their value to keep increasing (unless Bitcoin crashes).

I am simply cashing out as fast as I can, in the short term, in order to diversify my wealth across BTC and USD to spread risk. I own the equivalent of $2 million in Bitcoins, so I would probably want to sell a quarter or a third of that.

2weiX3• 15 years ago

sell me.

send me 20 BTC to 172LLtd45L9AunPJBWWsf3D15UeqMidqxZ and I will paypal you 538$ right now.

anon848352• 15 years ago

Honestly, it is too much hassle to deal with individual sales, making sure the guy is not a PayPal scammer, etc. Selling in a mostly automated way via MtGox is just fine for me.

KyleReese• 15 years ago

I wanted to buy bitcoins last week when the rate was 9,5 $ I did a transaction to MtGox via my bank, and today, 8 days later, the payment still hasn't been processed, my bank usually takes 10 days apparently. But today the price has soared to 26 $ I was planning to buy 25 BTC, but now I probably can't do that anymore.

If you feel generous, 1Mgem1HSyeigrzaBajR3RHnC3qXUQd2LLs :-)

bhickey• 15 years ago

For 5%, I'll dump $1,000/day on MtGox and send you the balance. Feel free to e-mail me.

rms• 15 years ago

You have more options! I think you should probably keep your job for a while with the plan to start a startup in the USA as soon as you have your visa issues sorted out or find a hot fiancée. At the current rate, you can easily have the beyond $1MM net worth where a good immigration lawyer can just make your startup visa issues easily ok. Plan on doing exactly what you want to do and live the life you want to live! Feel free to email me off-site.

Can you spare some Bitcents for this non-profit I volunteer for? Maybe you can find an accountant that thinks anonymous Bitcoin donations are tax deductible. :D

1NsFNk9nq8h5XnzHLdwLL7ysK63F69NJt4

http://singinst.org/donate/

adrianwaj• 15 years ago

Well done!!

I am looking at raising some funds to develop this idea:

http://www.bitrific.com/2011/05/summery-simple-startup-idea-...

"for webmasters and writers to collect and present summaries of articles to help solve the 'tl;dr' problem"

Does it interest you?

senjutsuka• 15 years ago

I would suggest finding a start up you like or other partners in whatever your interests are and then investing in them through phatom shares (consult a lawyer, its a fairly new construct).

You mentioned wanting to start a company with the money so find co-founders. From there create an operating agreement and register the company in a legal way that you can be an employee and owner (Inc, c-Corp etc). Obviously you will need to get a lawyer to do the appropriate wrangling but there are many ways to do this. Phantom shares, options etc.

Alternatively, you could do what one multi-national investor I know did and turn yourself into a company and sell shares of yourself to other investors. From there you can start up subsidiaries in whatever country through whatever standard private company (Inc, C-Corp) legal forms are permissible for a multinational to set up subsidiaries. Again consult appropriate lawyers, but I do know it is possible. This guy runs investment firms in India and America and has companies that run all over the place. It is possible when you have the money to do it. And if you want to create value its a good way to go if you find you have a nose for investments/opportunities.

Best of luck and congratulations on your new found wealth.

ComputerGuru• 15 years ago

You could make a donation to existing startups that make free software, such as 1NcfPAHFnkvfgXi5avF3pHDbT7FT85K4zb

(Taken from http://neosmart.net/donations.php)

etherael2• 15 years ago

If I were in your shoes, I'd hold a rolling percentage based on market performance and cash out via alternate channels than just MtGox 1k USD limits, you can likely find some reliable channels for conversion into alternate stores of value. I believe the #bitcoin-otc channel on freenode has cryptographically signed rep tracking systems for the market participants there, and if you can provide btc they probably would be only too happy to accommodate your desire to liquidate to a less volatile store of value.

When you finally have your wealth sorted, enter negotiations with your employer from a position of strength. If you really do actually like your job and think what you're doing is important, maybe see if you can roll some wealth into the business as an investor as well as an employee providing yourself with a motivation boost in performance in the process. If you don't like your job perhaps negotiating better conditions or conditions more suited to pursuing your own business interests is a better path.

With your experience in the bitcoin markets you might also be in a position to simply finance a really good bitcoin focused startup. I had an idea that I was going to try for myself but turns out I don't have the capital necessary to do so, so you're welcome to it if you like;

Create a superfluid buying agent consisting of two components, a basic exchange service like MtGox that cashes btc to a fiat currency on the backend, and frontend merchant widgets that update a given fiat currency price displayed in BTC to the actual user. This would give your users the ability to shop on any traditional internet shopping site and pay with btc transparently, you would assumedly implement the dynamic pricing in btc using a browser plugin of some description.

Further automate your trades so if the market is rising you hold btc, if it's falling you instantly liquidate to fiat for your received btc. It turns out to be basically a transparent way to accrue more btc in an upwards moving market and act as a fee charging instant electronic funds transfer provider in a downwards moving market. The dynamic pricing protects you from the volatility in the exchange rates.

Whatever you decide to do, good luck, and congratulations on spotting an early opportunity.

nametoremember• 15 years ago

Wow, suddenly bitcoin sounds appealing. Is it to late to join the party?

praxeologist• 15 years ago

Like someone said, you can find people to buy BTC with Dwolla in the #bitcoin-otc channel on freenode. The order book doesn't show much now but you might still find people there willing to buy if you want more cash sooner and more safely than paypal.

Do you have an idea you are set on? I am kicking myself today because I sold most of my few hundred bitcoins right before the market went nuts. I would love to have a technical cofounder and/or a small amount of seed money if you would consider me.

dgudkov• 15 years ago

>If I quit my job I will be bored and run out of money after a few years. >If I return to my home country to found the startup I will regret the opportunities I may have in the US. >If I keep my current job I will regret the opportunities of not starting a startup today.

First, you should decide what you want. What you really want. It may take weeks, months and even years, but there is no other way if you want to live your life without regret.

Don't ask others what should you do with money. Spend them on your goal. Your goal, not others goal.

sentinel• 15 years ago

Maybe this will help: http://k9ventures.com/blog/2009/09/24/my-story-and-support-f...

And, always good to contact an immigration lawyer to know exactly what you are legally allowed to do (I guess you can afford one now).

There was another thing I was reading about a while ago (but no sure what the case is with that), which states that you can get a special visa if you open up your own company (as an immigrant) which hires more than 5 people.

petervandijck• 15 years ago

Since you want to stay in the US, you should investigate the various visa possibilities there. Spend some money (few K) on an immigration laywer.

drcross2• 15 years ago

I think to really discuss this you should send me enough coins to get a return flight to hang out with you for a while, I'm an awesome guy and totally fun to hang out with. The first step is to party hard for a few days then we can settle down and talk about all the concepts I have in mind, of which there are many. I'm sure that within 5 days we can have some completely bullet proof ideas nailed down! :) 1Nv3ovJQJ3xnNkJUiLBdVW1LmLszoxYJe5

drcross2• 15 years ago

If you don't decide to send me a load of bitcoins I will say that you should consider investing in robotics startups. It's a burgeoning industry which has a lot of growth projections and great social paybacks too.

Loew• 15 years ago

I understand your problem and there are indeed multiple options for you. You should definitly not see this as a problem but as an opportunity! However, if you decide to keep living like now, and you do not wish to use that money for the moment, I suggest you put it in an investment (such as bonds) were you cannot easily withdraw the money. This is because otherwise you would be quickly tempted to use the money for your daily problems you would normally solve otherwise. So if you want to continue living like you did before, make sure the money is frozen or something but still invested so it doesn't use it's value over time (inflation). To make your decision, you should look into the options. First, do a lot, I mean really a lot of research on founding a startup. How much work is it? What will your life look like when you have a startup? Which things will you miss that you have now? Write down some pro's and con's.

My perspective is that you do want to continue living like you live now. If you are happy with your job, stay there for now, because it is not easy to find a good job. Also you can get a lot of xp and grow. You can have oppurtunities like you say and you will make a carrier. Something to be proud of. When you outgrow that job, you can think of your own business.

Of course I want to suggest to you to help me carry the burden and give me some of that large amount. It would be a nice reward for this advice, but I do not want anything in return for this, I give it to you unconditionally. However I do find myself in need of €2,500 to pursue my own dream. I do have a dream, and it is now that I have the chance to make it real. That is because now I do have time and I'm young, if I wait to long, I will end up in this society witouth any prospects and live a normal live. So if you are open to investing in someone's dream, please feel free to do so. I know this is what I want deep in side and will make me happy. Donation can be done on this adress: 1Q5JMqpGcGo7cz7eqrhuivyLsSCzTY9CQ5 I thank you in advance and I hope you can use my advice. If you need anything else ask me here.

drtse4• 15 years ago

I just watched some chart on bitcoincharts.com and considering what happened in june price-wise i'd suggest you to convert them in $ ASAP :) (lot of suggestions on alternative channels here).

Regarding the startup, money is not an issue, why not go back to your country for a while and then come back to the US opening your startup with an e-2 visa ($50000 minimum investment and if you want you can also be an employee somewhere else, http://en.wikipedia.org/wiki/E-2_visa) (IANAL)?

I read something about this visa somewhere, if it really works as it seems it could be perfect for you. The immigration layer someone else recommended should be able to assist with this. Good luck, btw.

(Quite funny that nearly everyone is posting his bitcoin address, guys, it's time to buy some GPUs :D) (or ... what come next in bitcoin mining? memristors?)

rick888• 15 years ago

The great part about bit coins is there is no FTC oversight, making pump-and-dump schemes very easy.

bbit• 15 years ago

Hi,

Would you ever invest in bitcoin related startups?

If so email me bitstarter@gmail.com

Thanks!

calebhicks• 15 years ago

If you want to maintain your wealth... I'd suggest cashing out as fast as you can.

Sure, things may go well and prices may rise more. But it's only a matter of time before governments start going after BitCoin.

Oh, wait. That started yesterday: http://venturebeat.com/2011/06/08/government-crackdown-on-bi...

nuala• 15 years ago

Blow and hookers.

Seriously though, I'd just cash out and keep your job. I'd also freeze around 80% of the money, so that you're not tempted to spend it all at once but still have play money. Have you attempted to get American citizenry? That would straighten out the main tangle there.

jimrandomh• 15 years ago

I believe you can cash out faster than that, if you go through an identity verification procedure, but I don't know the details. Send the MtGox administrators an inquiry.

You are now at the point of having no need to work, ever again, as long as you don't squander your wealth. Your first priority is to enjoy life - do whatever you enjoy most, without regard for whether it pays. If you'd rather have your current job than have an equal amount of free time, keep it. On the other hand, you can fit a lot of hobbies and socializing into the time a day job would have taken. Whatever you do, don't sit idle, that's less fun than you'd think.

You can probably find a way to found a startup in spite of your visa status; talk to a lawyer, you can afford it. Depending on what skills you have, there are a lot of nonprofits that would love to have you - and one great thing about volunteering is that, unlike working for money, it doesn't have to come with obligations or time commitments if you don't want them. Visiting the Singularity Institute for Artificial Intelligence (singinst.org) would probably be a great use of your time.

dedward• 15 years ago

While none of us can predict the future - I think it would be silly at this point to think of BTC as anything but a fairly high-risk investment right now. Assuming you can live off this for years and not work is a very dangerous assumption. I'm not knocking on bitcoin - I think it has great potential, and some interesting things are going to happen - it's a game changer - but you need to think more near term.

Given the current values (and remember, i'ts a market) - figure out the best way to dump it on a schedule - faster than you are now, and the tax implications.

Then, just figure out what that unexpected money means to you and your life - nobody else can tell you that.

Me, personally (and I'm not you, probably not your age, etc) I'd just stick it all in the bank and keep on trucking for a while, knowing I have an awesome cushion of cash in the bank.

Ask HN: I make $30k/month thanks to Bitcoin. What should I do?

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