2014, A Christmas in Crisis…

I remember wandering around a Christmas market in Poland, sipping on a plastic cup of Mulled Wine when I received an email that changed everything.  Digital Mining were in trouble, they were part of http://www.pbmining.com and as it transpired, not all of the due diligence had been done properly.

They say when the brown stuff hits the fans, you find out who your friends truly are.

http://www.pbmining.com had allegedly been blackmailed and accused of operating a Ponzi scheme.  So you would have thought this was not the best time to “Go Ostrich” sadly my ego couldn’t handle the truth, my shiny life was about to come crashing down around my ears and not because of anything more than a sub-contractors company.  The first thought I had; I need time.  Time to think and clear my head so I began to ignore calls, letters and emails.

As most people that have had any sort of therapy will know one of the key things you do is produce a therapy blueprint and I know for me one of the first signs my mental health is deteriorating is I stop opening my post.

I began to ignore calls from worried investors and because the good times had been very good my lifestyle was about to deteriorate dramatically too.  I was in the unenviable position of being hounded for money from investors that knowingly took a gamble whilst facing eviction from my flat.

I was falling behind on bills and disappearing into a black hole, I even had an email from my landlord complaining about a mark on the bathroom floor and because of this he wanted me to pay him handsomely.

Everything was falling apart, especially me, my ego was in tatters and hope had turned into despair.  Friends were too busy to help me and my whole world became very small and unpleasant very quickly.  Threats of legal action, accusations of theft followed, being arrested I can tell you is not a fun experience, having your equipment taken and investigated doesn’t make for a great day.  Threats of bankruptcy followed, blacklisted from groups that less than six months earlier thought I was the toast of the town.  It was horrible.

2014 The Winter of Content…

As summer came to an end, autumn arrived, the leaves turned golden and fell to the ground, I was now travelling more and more.  Looking for tech support in Poland, trying to find a way of reducing costs further because although things were still profitable, the price of bitcoin had fallen back and the mining difficulty had risen.  To put this into context imagine you are growing banana’s and every day you can see the price of your bananas falling.  You know there will be a day that growing bananas will no longer be profitable and even if it remains profitable, it will no longer be sexy.

The key to solve this was simple, or so I thought.  Develop a debenture like product.  It took the freshly mined bitcoins, traded with them, so everyone via coin-mixing shared in the profits.  The plan was discussed a new snazzy brochure was printed and distributed, Google Analytics and http://www.CanDDI.com showed how effective the brochure was.  It wasn’t that the site had lots of traffic but when you’re converting one in three visitors, who cares?  On an average day, I would see sign ups galore most testing the water with $5,000 and then topping up a month later with a much larger investment.  The site was growing so quickly, even our partners were struggling to keep up with demand.  They say in 2013/2014 more money was invested in Bitcoin or BlockChain related companies than was invested in Internet Startups in the 1990’s.  It truly was the golden age of my generation.

2014, the Summer dreams were made of…

As the summer of 2014 rolled along, I identified myself as the brains behind this start-up.  It became more than a company, it became my identity.  I was, after all, Mr Bitcoin.  I began doing talks and dinners on the subject, I started developing new ways in which to grow the company, each more elaborate and smarter than the previous.  I started working on a trading tool, allowing users to make even higher returns.

I was fast becoming one of the most talked about people on the digital circuit, I had developed a way of making money grow and best of all, now it was based on Spread Betting all profits were tax exempt.  I even considered moving the accounts back to the UK.  I was on top of the world, a mountain of ego built around bitcoin.

I thought I was not only gifted but untouchable, infallible and above all else my ego was having the time of its’ life.  For once, I was the most popular person around, the easiest way to describe this feeling is;

Imagine you wake up and every day is prom, not only are you going, but you’re attending with Cameron Diaz hanging off your arm and are a shoe-in for Prom King.

I was enjoying living in a new build flat in a smart London postcode and driving a new car.  I was popular, I had many people I could talk too and the days flew by.  I enjoyed online gaming, travelling to new places – I took nine company trips that summer.  Visiting data centres for an hour or so before going out and exploring the city.  It was a great summer and I, for once, had to actually turn events down, sorry I can’t make that movie premiere, oh yes and during this summer I attended several Leicester Square movie premieres.

 

2014, Q1 and Q2 – the good times rolled on…

It was a New year and everything started out well, Bitcoin had fallen in value, but even those who hadn’t sold in December were still in the four-digit percentage profits and the word was spreading of Mr Bitcoin and his Midas touch.

The money was flooding in and it quickly became apparent to expand we were going to need to sub-contract some of the tasks or take on new offices and staff.  The problem with the latter in 2014 was this, as soon as you mentioned the word Bitcoin to a high street bank, their toes curled up and you were unceremoniously asked to leave.  They wouldn’t even let the company hold a UK bank account, so much for the UK being the FinTech capital of Europe, so we ended up residing in Swiss accounts.  This is not as glamorous as it first sounds and the fees were horrendous.   The company was growing, but we were no longer talking £2,000 investments – we were talking $200,000 investments.

In order to meet this new demand we needed to partner with another supplier and so we began looking for partners and in the end went with Digital Mining, a manufacturer of mining equipment.  If you are going to partner with a company during the good times, surely partnering with one that could help maintain and upgrade the equipment when the good times ended made sense.  The deal was agreed and we began to expand.  Taking on more and more clients, pouring in more and more money.  At the end of Q1 the company had taken more than our business plan had predicted for the next 5 years.  It was insane, it was immoral, but it was at least legal.  The business kept growing and growing, we reached the point we actually had an investor waiting list, we had VC’s on speed dial and others begging to be allowed to play with our new alchemy experiment.  Why wouldn’t you want to turn small pots of cash into large ones and even in the troubled times of early Q1 I had steered them well, saved them from the March crash and brought them back into the $600 sell-club.  Buying anything for $200 and selling it for $600 within 90 days and having spent nothing to improve it was amazing.  The good times were here and everyone, including me, was enjoying them.

 

Bitcoin, the printing press of dreams

How it all began, I have always loved gadgets and computers – some would call me a nerd.  I spent many years working within IT before realising there was a fantastic opportunity to go Bitcoin mining on an industrial scale.

I investigated it further and the more I looked into it the better it seemed to look, so with a business plan written, I went to talk to a group of investors.  This was 2013, Bitcoin was the word on every money hungry investors’ lips and the currency (if it truly a currency is a matter for debate) had shown signs of great promise.

The currency was rising both in value and in notoriety, this led to interest and I would attend a networking evening event and by the following morning have emails from several people wanting to invest in Bitcoin or Bitcoin mining.

It became ridiculous – I had never been so popular, everyone wanted to talk to me, I became known as Mr Bitcoin and almost famous throughout these networking groups.  I was, for once, popular and I loved it.

People were pouring money in and then the winter of dreams came – October 2013 saw Bitcoin rise to just over $30, November saw it climb again and then December 2013, was the payday to end all paydays.  Bitcoin climbed over $1200 and the people I had got in at $9 and out at $999 thought I was the most gifted genius the world had ever produced.  In less than a year, I had turned their $2000 investment into just over $221,000.  As the wolf of wall street would have said, “the only regret you’ll have is that you didn’t buy more.”

They were amazed, astounded and seeing my little BVI company as the answer to any cash-flow problem they had.  After all, I had just made some clients millionaires on second-hand Mondeo money.

Needless to say when I wanted to expand in 2014, nobody asked any questions and the money flowed like the champagne at the previous years’ Christmas party.