Is there life after cryptocurrency? Stories of people ruined by mining and investing in crypto
Virtual coin mining has attracted and continues to attract specialists from all over the world. Many are willing to sacrifice their last savings to chase the coveted block and put it on the net. For that, they usually promise a nice reward in the form of a bitcoin (or other crypto). But how justifiable is it in today's reality?
We often talk in Ultramining.com articles about the collapse of the crypto market, «bearish» trends and a prolonged «winter». And, no, this is not inflated, but unfortunately an objective statement of fact. The crypto industry is going through bad times and there is no telling when the situation will change for the better. But it is bound to happen.
Forecasts for the next year, related to mining, are not so negative anymore. And we just have to learn from our mistakes. It is best when they are someone else's.
The fall in the value of BTC – a common problem
According to various estimates, bitcoin has depreciated by $400 billion since January of this year. That could not avoid the major players in the mining industry or private BTC miners, who have lost everything because of this situation in the crypto market.
Yes, we are aware of the fact that Coinbase, a major U.S. virtual coin company, lost half of its value in just one week. Who else?
- The organization's founder, Brian Armstrong, lost billions of dollars to the collapse of bitcoin.
- The investment of the richest man in the world, according to Forbes, Ilon Musk, invested in crypto, melted by more than sixty percent.
- The collapse of Sam Bankman-Fried's (FTX) financial empire. This list could go on for a long time.
This is how network users mock Sam Bankman-Fried's controversial decision to declare FTX bankrupt.
These are all pretty big names and company names, but how are things with people who aren't on their radar. Let's look at a few stories.
1. Криптолюбитель из Великобритании
Sean Russell, a resident of the United Kingdom, saw bitcoins as his carefree future.
For many years he was interested in the topic of virtual coins, trading, and exchanges. And in 2017, he invested $120,000 American dollars in BTC. How the man was surprised when his investment increased several times. That's how he earned $500,000.
«Wow, I'm finally going to pay my mortgage, support myself for the long haul, and have that vacation I've always dreamed of», – Sean Russell recalls.
He also had thoughts of starting to mine the cherished BTC. But they were not destined to come true.
In December 2017, the value of the bitcoin exceeded the $20,000 mark. And the next year there was a collapse and BTC was trading at $6,300.
The man ended up losing almost all of his savings. After that, he went to work as a real estate developer and gave up the idea of investing in cryptocurrencies forever.
This story almost five years ago perfectly shows the instability of virtual coins. Of course, one can only hope that a similar collapse in 2017 does not happen now or next year.
Michel Rauchs, a cryptocurrency and blockchain researcher at the Cambridge Centre for Alternative Finance, said that such fluctuations in the value of virtual coins attract inexperienced investors.
For example, when the price of BTC is low, people start buying this crypto, hoping for a profit. Then the price goes up, then it collapses again and everything starts all over again.
2. Roy and DOGE
On the Internet you can come across the story of another Briton. He told it to a journalist from TheGardian.
Roy heard about the possibility of making money from cryptocurrencies on the radio. Inspired by Dogecoin, a virtual coin promoted by Ilon Musk, the Briton began googling information about it.
The man invested two thousand euros in DOGE and earned four times as much. Believing in his success, Roy continued mining and buying virtual coins. Then his earnings on crypto reached half a million euros.
Then there was a period of «bull run», which means an increase in the price of virtual coins. However, this «fairy tale» did not last long either. The collapse of the crypto ruined the man and he had to undergo rehabilitation from crypto addiction (yes, there is such a thing, too).
3. Stages of crypto-crash acceptance, reflecting the experiences of people who have invested in virtual coins
According to TheGardian, there are eight stages of crypto-crash awareness.
Alla Drinksne, a 34-year-old chef from London has lost all her savings – a six-figure sum in local currency. This happened because of the crash in the crypto market. The man was so shocked that he couldn't eat or sleep for two days.
Roy, who we mentioned above, always thought that the next virtual coin mining project could even out the difficult situation. The man hoped that he could continue to withdraw crypto from his accounts.
«I'm going to try it, I need to do it again», – Roy exclaimed. Surely somewhere in the back of his mind the man is still hoping to get back into the mining industry.
Glasgow-based engineer and personal finance blogger Alex Koch, 41, has been throwing in angry messages directed at Do Kwon. He is the South Korean entrepreneur who founded the virtual coin terra/luna.
Alex claims to have lost enough money on virtual coins. And Kwon ended up being accused of fraud by five other miners from South Korea.
This is a high-profile case. It's already being investigated by the Financial Crimes Unit. In the United States, Kwon is also being investigated thoroughly. The Securities and Exchange Commission will look into the investor's involvement in financial fraud.
Wahid, a 31-year-old London resident, used Twitter to ask Alex Maszynski, the founder of Celsius, for money.
The investment of the British capital's resident - more than 50,000 pounds in cryptocurrency - was blocked in his Celsius account.
It is known that the man was going to engage in mining and build a house. Wahid spends time on conference calls with other victims of the Creta collapse.
Everyone is hoping to get back at least some of their investment. But it is not known whether it will be possible to do so.
Alex Koch talked about planning to retire early because of his investments in mining and crypto in general.
«Everything is ruined. I've never cried like that in my life», – the man admits.
Acceptance and Hope
«For the sake of reaching some level, I worked hard. About six years was spent mining for virtual coins says Driksne. – This money is hard earned by me. But you have to stay positive. I hope I can still make it».
Wahid hasn't admitted to loved ones that he lost all his investments and has no savings left.
«It's important to learn, to admit your mistakes, to get better, – Koch says. – If I make it through this ordeal, maybe I can become an inspiration to people all over the world. Or at least for my children».
What's the bottom line
Mining virtual coins is a rather unpredictable and challenging process. On November 10, 2021, the value of bitcoin reached a record high of over $69,000. According to rbc.ru its value is $15,810 (and it keeps falling). We can only hope that the amount you can get for the first cryptocurrency will fall to historic lows.
Loughborough University financial economics professor Alistair Milne believes that the rise and collapse of virtual coins is a cyclical process. As it relates to something unstable, depending on events in the world.
But there are favorable predictions concerning the rise of BTC in price. We need to mine, worry less and hope for the best. What else is there to do! You can, of course, sell your equipment or adapt it for other needs. We, incidentally, have devoted a separate article to this topic.
But still, we want to believe that even after the darkest crypto night there will be a crypto dawn.