WEST PALM BEACH, Fla. — Cryptocurrency is taking center stage in Miami this week.
It’s being dubbed the biggest Bitcoin event in the world as companies and cryptocurrency enthusiasts gather to share ideas.
The crypto craze continues to grow with celebrities hawking it and sporting arenas being named after crypto exchange companies.
Then, there are people like Eddie Lynch Jr., 24, who are mining crypto.
“I dove into mining, figuring out what it is, how I can benefit from it,” said Lynch, who lives in Palm Beach County.
At his crypto mining business, fans run for hours a day to cool off specialized computers named “Money Maker 1” and “Money Maker 2.”
“It was around $10,000 for these two setups, and we made the money back within six to seven months,” said Lynch about computer systems known as “mining rigs.”
It’s hardware connected to a motherboard and graphics cards, 24 of them in total that run programs to find certain types of cryptocurrencies on the internet.
“We’re mining Ethereum just because it’s the most profitable,” Lynch said.
Ethereum is only one type of cryptocurrency. One coin is going for more than $3,000.
Bitcoin is another type of cryptocurrency, the most valuable now going for more than $40,000 a coin.
“These coins are essentially, they’re algorithms, that are being mined throughout the world by different individuals, different companies,” said Eric Cornell, a private wealth adviser and branch owner at Helius Wealth Management.
There are no banks involved in cryptocurrency, but it works much like the stock market. There are various global exchanges for different digital coins.
People can invest in cryptocurrencies like they do in stocks. You take money from your bank account and transfer it to a virtual wallet to invest on that exchange.
Another form of investment is buying infrastructure, like Lynch did, to mine crypto and generate a profit each day.
“We’re making about $50 to $60 dollars a day right now, which we were making about $100 to $150 a day when the rates were OK,” Lynch said.
What these supercomputers do is find pieces of crypto on databases called blockchains.
“These are algorithms. People are using these gigantic servers and a lot of power to be able to go out and try to essentially extract her algorithms out of the virtual finance world,” Cornell said.
There is the downside.
The U.S. Energy and Commerce Committee Chair says crypto mining for Ethereum and Bitcoin last year emitted 78 million tons of carbon, the same as 15 million cars on the road.
“We have to do it efficiently,” Lynch said.
That’s one of the reasons why Lynch was at the Miami Bitcoin Conference this week, to brainstorm ways to make crypto mining cleaner.
“We put this into a system that we engineered with immersion cooling, so it’s just a better way to use less electricity and keep the hardware intact,” he said.
Is cryptocurrency the future?
“Unfortunately, the swings are fairly wild,” Cornell said.
Cornell admits there are high rewards in day trading.
“And they could lose cash just as quickly,” he said.
For Lynch, there’s no 9 a.m. to 5 p.m job, and he’s not tied to work Monday through Friday. His company runs itself.
“The client is ourselves and our workers are these hardware,” he added.
But crypto has a way to go to be widely accepted.
“It’s already down 3.4 percent,” Cornell said. “And that’s where we find an issue with crypto, that there is no store of value at this point.”
Cornell points out companies can’t present profits using it at such a volatile rate.
Only a few U.S. stores accept cryptocurrency.
He expects more will in the future, but with miners like Lynch finding more coins every day, there is more circulation of skepticism among some in the finance world.
“[Some have] called it the biggest Ponzi scheme of all time, you know, tomorrow it could be worth nothing,” said Cornell about what he’s heard some financial partners comment about crypto.
Others wonder about how safe cryptocurrency is.
There are risks to your digital wallet being hacked, but Cornell said, overall, crypto transactions are secure.
The reason is that each coin has a ledger that records every transaction, and there are millions of these ledgers out there that all match, making it difficult to counterfeit a cryptocurrency or duplicate transactions.