• Market Analysis — Investing — Trading Methods At The Morgan Report For Only $50 Per Month. | http://www.themorganreport.com/join.
  • Discover How YOU Can Cash-Flow Gold & Silver For A Passive Income Of 12% – 26.4% Per Year Just Like Real Estate… Get more details here.
  • Starting your own precious metals savings program is an easy way to automatically save in gold and silver. This makes it easy to maintain a disciplined program for increasing your ownership of history’s most proven stores of value. Learn more here.

The Boy Who Cried (over) Bitcoin By Bob Pellerin

I’ve written about and given presentations on Bitcoin for years now. As an IT specialist with strong connections to the financial community, you’d expect me to be one of the many people blindsided by the allure of Bitcoin-based solely on its technological appeal. Imagine a reinventing of money. A completely manipulation free currency made of digital bits with a predictable supply growth curve, something not under the control of a single government. I could go on, but you get the gist.

One of my early articles written for precious metal guru David Morgan for his “The Morgan Report” subscribers pointed out why I had some apprehensions. If you ignore the fact the person that invented it is anonymous, and the whole limited ability to create more in the future, the idea sounded relatively good. It had no real value in my mind past the novelty factor.

Being a technology buff, I dove in with my engineering hat firmly on. My teenage son pleaded with me to invest vast sums along the way. I dismissed the thought. I was more intrigued by the farming aspect of it. What was that all about? I tried “farming” using some high-end server equipment. To my horror, the usual “throw hardware at it” trick didn’t work. I then tried NVidia graphics cards. It should be noted that I was a shareholder at the time. That, to my surprise, worked much better. I began to work with a company called Nicehash out of Europe and getting small fragments of bitcoin. As this was going on, I was still trying to figure out precisely what the farming was for.

At first, I naively thought the resources (hardware and power) being used were trying to calculate something worthy. A physics problem perhaps? Finding aliens? The sci-fi writer in me loved that idea. I started to reverse engineer the transactions. A friend of mine pointed out that the code was open source. Oops. I laughed it off and began to review the code. That’s when I understood the folly of the system. The farming was nothing more than our resources taking the place of the bank and validating transactions and writing them to the blockchain. The blockchain is like a master list that gets distributed. Since it is available and widespread, the idea is that everything is transparent and safe. The bitcoins may not be safe, but the audit trail is!

I began to think I could design an ASIC chip to outperform the graphic processors (GPUs). Again, my thoughts were pointless as ASIC hardware was available from China at this stage. So I forked over tens of thousands of dollars and had some delivered from my new friends at BitMain in China. As soon as the units came in, I plugged them in and charted as much data about them as I could. Hash rate, power usage, and temperatures were all recorded. Then came the enjoyable part. I set about redesigning the unit to be faster and quieter. Yes, it was that noisy! We ran those things in freezing temperatures and in heat and countless variations to see what it did to the hash rates. I was in talks with a refrigeration company interested in developing special cooling for these machines referred to as “Antminers”. My prototypes were given names like “MooMiner” and “BobMiner”.

Encouraged by a growing crowd of professionals I interact with, it seemed like most were investing or wanted to invest. I still strongly suggested caution. I ran models with a good friend of mine our of L.A. The numbers were so good it looked like this was like printing money. That, I declared, meant we obviously didn’t know all the variables. If it’s this good, then huge farms would be buying up real estate and power at an exponential rate. Ironically, that started to happen in Canada where land and power are relatively cheap, and the cold winters actually come in as a positive thing for this business model. So you can see how I headed into a rabbit hole. It became a puzzle. Forget Bitcoin! It was all about getting this done better. Meanwhile the Bitcoins and other cryptos accumulated nicely. Then, it happened. Nicehash was hacked on December 7th, 2017. All that Bitcoin was just… gone. Ahhh.

After this, the market price of Bitcoin plummeted. The tests I performed for and with large corporations revealed that all my best efforts were giving me, at best, a few percentages. I was able to push a 13.5TH/s machine 16-18TH/s, but the extra liquid cooling and effort still resulted in premature burnout or extra calculation errors that started to affect stability and reliability. Later on, Nicehash vowed to reimburse inventor losses. I signed up with a Canadian firm called QuadrigaCX that reassured me they were secure. I had Nicehash send everything there. QuadrigaCX knew all about hackers and were using “cold wallets” which means they kept the Bitcoins off-line. After my fiasco with Nicehash, I was reassured.

On January 31, 2019, the firm QuadrigaCX filed for creditor protection. With it, it took all that I had received from Nicehash and what I had invested into various other cryptocurrencies. Ironically, I had sold off much of the cryptocurrencies before the holidays. The only problem was that I had left the real currency sitting there in that account. The very security mechanism that I had so trusted turned out to be what made me lose my money.

Is Bitcoin here to stay? For a while, I’m sure. Will I re-enter the Bitcoin world? No! Until regulators protect the small investors, I would advise everyone to stay clear. When you can go to a regulated bank and trade them there, then perhaps I will reconsider my position. Until then, I will stick with my mining friends and place value on the hardest currencies of all, gold and silver. They are the only money with no counterparty risks. In these tough economic times, prudence is in order.


Bob Pellerin
The Morgan Report Premium Member

Let My Passion Create Your Wealth.

I’ve Been Helping My Subscribers Weather the Current Economic Mess. Now I Invite You to Join My Growing Circle of Successful Investors.
The Morgan Report is all about YOU and how you can build and preserve Wealth for generations to come. We know it can sometimes seem a daunting task to protect your assets and preserve or grow your wealth. Over 15 years ago, a small group of us started The Morgan Report and formed an exclusive membership organization to promote personal freedom, an honest money system, free market wealth accumulation and asset protection.
Thus was born The Morgan Report – since then we’ve helped 11,000-plus members scattered over the globe in every continent and over 100,000+ e-newsletter subscribers have read our weekly e-newsletter — This Week’s View from The Morgan Report.
Through our publication, The Morgan Report, we provide you with ways to achieve greater financial security and wealth in all sorts of environments.
Learn more and become an insider for The Morgan Report, click link below…

Special Riches In Resources Free Report

Because there is a 100% failure rate of ALL fiat money throughout history, you will learn what to do by obtaining your Free Report. Just enter your first name, your primary email address and click the Get Special Report button below.

Our mission statement reads…
“To teach and empower people to understand the benefits of an honest monetary system.”
Today’s monetary system is based upon a lie. The lie is that you can get something for nothing, or perhaps more simply stated, wealth can be printed. History has shown throughout 5000 years that whenever a country has tried to maintain this illusion (lie), failure has been the result. We invite you to learn more about what The Morgan Report can do for you. Click on the Learn More About The Morgan Report button now!

Learn More About The Morgan Report *

Scroll to Top