I'm building plots of passive income...hopefully
Last year, as I became more serious about my pursuit of joblessness, I spent a night reading Tanya Hester's book Work Optional.
The book details potential paths to retirement and shines a light on just how achievable an early retirement truly is, despite what rigid social constructs may have etched in our brains.
Yes, you can retire before age 65. No, it is not as difficult as you think.
The book was a catalyst to becoming even more financially sound, preparing myself for semi-retirement, the ability to work just enough to cover expenses, likely via part-time or passive work.
I've been spending a lot of time thinking about this recently. How can I generate more passive income?
Traditionally, perhaps this would be done through dividend investing or real-estate. But as is all things, Becoming Jobless, I'm looking away from these more conventional income streams.
Last week I stumbled into the second episode of the new Kevin Rose podcast, Modern Finance (the first episode coincidentally is about NFTs!), in which Kevin sits down with BitTorrent and more recently, Chia founder, Bram Cohen.
Chia is a new blockchain/cryptocurrency project, focused on being a more efficient, greener version of Bitcoin. For example, while Bitcoin's proof-of-work, relies on intensive CPU/GPU mining, Chia's blockchain runs on newly invented proof-of-space, utilizing unused storage space from hard drives around the world.
The idea of participating in blockchain networks has always been intriguing to me, but it typically is resource intensive and completely unfeasible for the average person. If you're mining Bitcoin in your apartment, you're losing money.
But, with Chia, Bram suggests almost anyone should be able to "farm" on the network. In fact, Kevin highlights that he has started the process with a laptop and an external hard drive he had sitting around.
By setting aside some unused space, building 100GB plots, and participating in the network, your plots might eventually earn block rewards...the same way you'd earn bitcoin if you were mining it.
These block rewards though, are paid out in Chia tokens (XCH).
With ample space, I downloaded the Chia blockchain, and started plotting using the Chia GUI.
It's actually really easy to get started.
To generate a 100GB plot, the smallest possible plot for farming, it took my computer around 13 hours. With the 14TB I've secured, I'm initially working on getting 140 plots to farm....but for now, I'm farming on one.
Unfortunately though, it didn't take long for me to get a sense of just how difficult the life of a farmer may be.
A few hours into farming my first plot, I stumbled into ChiaCalculator.com.
ChiaCalculator allows you to get a sense of what your rewards might be based on the amount of plots you have, the size and growth of the network, and the eventual price of XCH.
Since Chia (XCH) is not tradable yet, it's a bit of a guessing game on the price of a token, but I conservatively (I think?) put the ratio at 1 $USD= 1 XCH. My gut thinks it'll be less.
At 140 plots, and $1 XCH, here's my reward schedule for a month of farming, per ChiaCalculator.
Not great, Bob.
Fortunately the energy costs are designed to be insignificant?
Having paid $350 for the hardware to hold 140 plots, it would take over a year for me to recoup my investment if this scenario plays out.
We'll need to wait and see...for now, I'm building more plots, dreaming on expensive Chia tokens, and looking for more unconventional, passive investments.