My adventure in digital renting

I don’t know if there is formal name called digital renting but if no,  let me be the first one to name it. And I think this will likely be the future rental business in the making to at least go together with the centuries long physical rental business, most famously like house or car rentals. So how do I define the digital renting? Well, roughly anything that one can rent out digitally without the need to deal with the physical properties could be a form of digital renting. In this sense, I assume the already popular renting business for movies and ebooks is one of them. But what I really means here is more for individual digital assets that can be rented out, just like you own a house and you rent it out at the personal level. So far it is still too imaginary for most of people I guess but I have already started one with good progress that I can share with you today. With last week’s topic about bitcoin, you may guess now that I’m talking about something related to bitcoin and its underlying technology. More specifically the digital mining business for now.

 

As you may surely know by now, I’m a huge fan of this new technology, blockchain (BC). More I learn it, more I become convinced that the next 20 years will become the BC era. While it is still too hard for most people to imagine what is coming with BC, soon you will suddenly find that a lot of our assets will be digitized that will allow us to openly save and transact them via BC-based technology without fear of being hacked or stolen. You can pass this blog now if you think I’m too crazy to talk about this but just be aware that it will be your loss, not mine, if you don’t start to educate yourself about BC and be open-minded for something life-changing that is coming. Let’s get into some meat how my first adventure with digital renting tastes like.

 

I have already talked about it a few times actually. It is about the Gaga Watt digital coins that I have bought a few months before. And now I have rented them all out and they are making money for me day and night, actually minute by minute more precisely! Briefly, this GW coin is issued by the company, Cryptonomos which owns and provides the infrastructure services for those who want to mine bitcoin or other cryptocurrencies. As the coin holders, I’m almost like owning part of the business as I have the right to use the services or rent my coins out for others to use the services. So far I can see 3 ways for me to make money or monetize my GW coins.

• The most direct way of earning money for me is obviously the “rents” I got from those who rented my coins. Initially I thought I’d get some cash directly from the renters but soon I realized what I’m getting is not cash, but the underlying cryptcoins that the renters mined. In other words, each time a renter mined a coin, I got a tiny fraction of the coin that was based on the open market price of the coin at that moment. This is really around the clock mining business as renters are not restricted to one area but across the globe. My account is updated every hour and indeed each hour I see some coins are credited to my account throughout the day. How much I get is totally dependent on the market price of the coin: I get more if its price gets lower and less if it is higher. So based on the market prices, I can estimate how much money I could get if I sold them at that point. So far I mostly get bitcoin and etherum, the two most popular cryptocoins (CC), and much less with litcoin. So I can easily calculate the return from them. Based on the past few weeks of what I have got, my annualized return is roughly about 30%, consistent with what the company has projected. There are 3 rental rates I can choose; the higher it goes, the harder it will be to rent out the GW coins. In order to make sure I always rent out 100%, I simply go with the lowest rental rate. This way, I know all my GW coins are working to accumulate cryptocoins for me without me doing anything. I’m really excited about this mode of online renting business. Little by little, I’m increasing my hoard of cyptocoins that could be very valuable down the road, similar to getting dividends from stocks!
• While I can easily sell the coins I’ve got now for immediate cash return, I think the future potential return from the CCs could be much bigger and even huge, if my vision turns out to be true that the BC based technology will become the mainstream widely used application just as what the Internet is doing for us now.  I’m betting this future return could be moonshot if I’m lucky enough as an early crab eater.
• The final potential has less certainty but I think it is quite possible as well. That is to openly trade my GW coins if I want to sell them, if their demand is high with inflated prices. I talked to their representative and they informed me that indeed this is also in their plan, probably in 2 years from now. So far they want to focus on what they have promised to the GW coin holders to allow them to rent out their coins with sufficient mining services available. When the business become more established in a few years, it will make more sense to let their coins be openly tradable. I like the plan.

Surely you have sensed my excitement about my adventure thus far with the digital renting. But I would be a big liar if I’m not talking about the potential risk associated with it. Actually it is a real risk that the BC technology won’t become the next Internet as I’m expecting and/or the CCs may be totally banned by governments around the world. While I don’t want to underestimate the potential risk, I truly don’t believe the likelihood of a total clasping of the BC/CC is high. It may take longer time than I thought but based on what I’m seeing every day, I even become more convincing that BC/CC world is coming to our daily life sooner than later. But still, as with any speculation, you need to manage your risk to the level that you can take if you are wrong. The money I’m putting into this adventure is a tiny fraction to my total asset and it won’t be any meaningful pain to me even if I lose everything from it. But the potential reward could be dozens or even hundreds of time if I’m right about the BC/CC that can indeed change our life like the Internet. That’s the risk-reward ratio I’m willing to bet on!