Monday, July 2, 2018

$20,000 Crypto "Passive Income"

Right now, price of ETH is $450 USD.
After Casper + Sharding, 32 ETH is required to be a validator. (this link is a great read, btw)
USDSGD rate is about 1.36.

Do the math and you get $19,584, which will be enough to get the crypto capital required to run a validator.

Buy a NUC for about $400-500 and you've got yourself enough hardware to host the node.

(examples of NUCs: eg1, eg2, eg3)

So there you go, for about $20,000 SGD, you'll have the essentials to run an ETH validator once Casper and Sharding is out.

All of this is crypto nerd speak, but basically it's going to be a "passive income instrument".

ROI is fuzzy. Some people think 5%, but I'd imagine that the real life returns are 3%, or maybe even lower.

ROI is also in ETH, which is volatile against USD. I guess you can just assume it's 1 ETH a year.

So now you have an interesting curious case of having crypto capital paying out crypto returns.

Personally, I believe that ETH marketcap will be larger than BTC. That means at current prices, with BTC staying constant, ETH would be $1079 USD.

Capital gain of the 32 ETH in the node: $27,370 or 140% unrealized capital gains
New annual expected "income" from the node: $1460, or 7.4% pa

Now, if BTC goes back to $20,000 and ETH matches its market cap? Just a simple 3x to all those numbers above.

Capital gain would be close to $80,000 and annual ROI would be over 20%.

And this is if the value of cryptocurrencies just stagnate at those levels, which I personally doubt.

Anyway, these are all hypothetical numbers that I'm throwing out into the air.

Question: GMGH, how many ETH validators do you plan to run?
Answer: As many as I can.

Looking back at this post 2-4 years down the future when Casper and sharding is live and well, it might be crazy to think about how cheap it was to acquire these digital assets and how crazily disgusting the current returns are, such that someone with just a handful of nodes can retire and live a very comfortable life.

I'm not going to come out and explicitly tell you that you should get 32 ETH. Your money, your life.
But that's what I'm doing for myself and for people who have entrusted me to manage their crypto portfolios.

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