Mining Bitcoin on My Farm to Offset Rising Costs – Bitcoin Magazine
This is an opinion editorial by AlbertaHodl, a Canadian dairy and beef farmer and passionate bitcoin miner.
This is a farmer’s perspective on why mining bitcoin is a good idea.
I was born and raised on a farm. I earned an economics, business and hard work degree without actually completing any high school. Times were tough. My father shared the farm with his brother in 1998. As a 10-year-old, I busted my ass with my 13-year-old brother because we had no choice. Money was tight. Interest rates had finally reached “normal” levels and commodity prices were not high, but life was good. Since then we have managed to expand our business, buying bigger and better equipment, more land and more animals. Here we are today, in the same boat as many other farmers and ranchers: Big enough to make a living, but wondering what to do now.
Land around us is pushing $15,000 per acre. No matter where you farm, costs are spiraling out of control. New and even used equipment is starting to seem out of reach and low interest rates were about the only positive if you needed a loan. Well, kiss it goodbye. When you add in political regulations, fertilizer and labor costs, many of us farmers are rethinking the next item on our ever-growing wish list. It is quite difficult to summarize a generic return on investment that includes inputs, irrigation costs, seeding costs, etc., but every farmer is well aware of the long-term investment that equipment, land and animals are. Land doesn’t even pay, but we justify it by using the rest of the operating income to squeeze in another package, a few more pairs of animals or the bigger equipment that will save us time and money. us to buy another tractor, seeder, sprayer, a few more pairs of animals or the even more precious field.
It is a continuous cycle that we have become accustomed to – a fiat mindset of the modern slave. Cheap credit encourages borrowing for the boat, the toys, the bigger house, etc.; it never ends.
As a lifelong farmer, I understand the hesitation of exploring other options, doing something new, stepping outside our comfort zone. I really do. Bitcoin? Heard about it in 2017. It sounded like a scam so I didn’t bother looking into it.
I should have.
2020 came and our family farm was rocked by the politics surrounding COVID-19. We were at a loss. Nothing made sense. The world, and especially Canada, seemed to be going to shit. We had our faith and I can’t begin to explain how much it played a part in our sanity and confusion through the difficult times we faced. Like many farmers, we were rich but cash poor.
Through ups and downs, I stumbled upon Bitcoin. Little old me, out in the country, starting to learn and understand money, the time chain, cold storage, proof of work – everything related to Bitcoin.
Trying to learn as much as I can has made my head spin at times, but I felt hope right away. Bitcoin is hope! My goal is to show why bitcoin is a good investment and good for you if you understand it enough to HODL.
Multigenerational farms naturally have a low time preference, so if you understand Bitcoin, why not start mining the asset that is harder than the land we operate? As a Canadian, property rights have very quickly become a major concern.
Since the Justin Trudeau-led government froze bank accounts, many have woken up to the fact that nothing is really theirs anymore. We do not own our money and we cannot own property without paying more taxes. If we have a good year and make a lot of money, we have to pay even more tax. It’s a vicious circle.
Farmers and ranchers always rely on hard assets for retirement, but seeing farmers in the Netherlands and Europe being bought out as regulations and high energy prices force their hand is a reminder that only bitcoin can truly be yours. This leads many of us to think that perhaps the assets that we plan to use for retirement and pass on to our children are not quite as safe as we once thought.
Most farmers look at a time frame of 10-20 years for return on investment. We now have an alternative that can return it in much less time. We are happy to buy the neighbour’s farm or arable land with an interest rate of 3-5%. Is it time to consider taking the down payment on your next long-term investment and instead buy a shed, some ASICs, a few fans and start a personal stack without know-your-customer (KYC) tracking? Instead of another $500,000 loan for land, you can take out a smaller loan to get bitcoin miners up and running. There are many advantages: lots of rural power available, machinery is a corporate tax write-off, so instead of buying the nitrogen at $800 a ton, the expensive farming equipment or a few more pairs of animals, you buy some miners.
Hypothetically, bitcoin that is mined can be distributed to whomever you want. Perhaps it remains on the farm balance sheet. Maybe it’s part of your inheritance plan and goes to your children. Maybe it will be your retirement savings. That’s the beauty of bitcoin! You get to decide.
If you run any kind of successful farm, you should be able to deduct your utility bill from other income. So even in bear markets when the price of weed drops drastically, you can justify keeping the machines running. Instead of putting your heart and soul into another piece of land, maybe start mining instead. There are no problems with hail, calving problems, drought years or unseen headaches. You lock in your power, have the electrician run some wire and some ethernet wire, add some fans and you get a return on investment.
The effort to keep a bunch of ASICs running is much less than one hour per week using mains power. And the machines have the potential to pay out in the hardest resource in the world!
When I first suggested buying some bitcoin using the farm’s treasury, my father was completely skeptical. It was something he did not understand, but he saw the need for a solid money that could not be inflated. After countless conversations, we bought someone to keep the balance of the farm. We kept going down the rabbit hole and used some of that bitcoin to buy miners. Over the next month there were late nights building out the shed, the tunnel, running wires and waiting for the machines to arrive. The setup was a bit overwhelming at times and relied heavily on a few very helpful Bitcoin Twitter friends to work through the kinks.
Finally we were hashing. Then came the moment I was waiting for: My dad said, “Hey, if this bitcoin thing really takes off, my succession planning for the non-farm kids will be a lot easier.” He is of retirement age, but he understood the implications of a monetary system outside of government control.
Not sure where to start? I’m a millennial who barely uses a computer anymore, but I managed to figure it out. Are you unsure about power, ethernet and airflow? Talk to an electrician for help with your power needs and reach out to myself or a number of more knowledgeable people on Bitcoin Twitter. Many took the time to give me suggestions and advice. Mining isn’t as hard as you’d think, and ASICs are cheap right now. Write them off as business expenses, spend some time researching and start acquiring satoshis.
As a farmer, I always want to trust people, but one of my biggest concerns was getting miners without getting scammed. I barely knew what bitcoin was, let alone how to trade it. I was terrified of losing the farm’s bitcoin. Fortunately, I was listening to a John Vallis podcast with Steve Barbour from Upstream Data. The way Barbour talked about business operations, finances and integrity immediately gave me a sense of confidence.
I contacted Upstream Data and asked if they could connect me. For me, a big part of the deal was being able to pick them up in person at their warehouse; the key, I guess, was to verify rather than just trust them. I knew they trusted me too if they were willing to let me pick up the miners at their facility. They did their thing and I was more than happy to go and pick them up and have a couple of drinks with the guys. There are many reliable providers out there and I’m not going to say that one is better than another.
I am currently trying to access some natural gas wells that have been abandoned on and around our property. Imagine the cost minimization if you don’t have to pay for electricity from the grid. Imagine creating value from the core of the earth without permission.
To summarize, with all the uncertainty in the world, property rights seemingly disappearing, a broken monetary system, inflation skyrocketing, high interest rates, what do you have to lose by putting a small percentage of your business profits into an investment that potentially returns in two years or less? The only work involved is keeping some computers running. I would say that borrowing a lot of capital to buy land or equipment is a much bigger risk.
The best case scenario is that you start a personal, non-KYC stack, and write off the power and ASICs through the company. It gives you financial freedom for generations to come, anywhere in the world.
All it took was a couple of encouraging messages on Bitcoin Twitter to light a fire under my ass. What stops you?
This is a guest post by AlbertaHodl. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
