Entrepreneurial teen mines bitcoins, contributes toward electric bill
CHAPEL HILL, N.C. — One sign that Evan Neal isn't your typical 16-year-old: He contributes several hundred dollars toward the monthly electric bill at his father's house to cover the cost of running his energy-hungry computer equipment.
It's all part of the latest business venture started by the tech-savvy, rising high school junior, who uses high-powered computer processing to obtain newly made bitcoins, a process known by cognoscenti of the digital currency world as bitcoin mining.
“It's definitely entertaining,” Evan said. “I see it as an experience.”
A profitable experience, that is. By Evan's calculations, he estimates he has reaped more than $2,000 in profit after deducting hefty expenses. Those costs include buying specialized hardware and contributing $200 to $300 to the electric bill at his dad's house.
He's paying dividends to his co-investors, including four high school friends who at one point invested $125 or more.
Campbell Harvey, a finance professor at Duke University's Fuqua School of Business, said the Triangle isn't a good spot for bitcoin mining given the relatively high cost of electricity here and the huge amount of power required to run the required computer hardware.
“That's the reason people are doing mining in areas where electricity is very cheap,” he said.
One exception, Harvey said, would be students who attend North Carolina colleges and live in dormitories where they don't have to pay for their own electricity.
“And that's not fair,” Harvey said. “That shouldn't be allowed.” Harvey has taught cryptofinance as part of an international finance course and has proposed teaching a new course next school year that would be “100 percent devoted to cryptofinance,” including bitcoins.
Bitcoin mining isn't Evan's first entrepreneurial venture.
When he was 11, Evan — an articulate youngster who, unlike many of his peers, rarely peppers his conversation with linguistic crutches such as “like” and “kind of” — started a business called Dream Programming. He would remotelylog on to people's sluggish computers and optimize the machine's performance for $25.
“I had a website, and I advertised it a little bit,” he said.
But he only attracted a handful of customers, which he blames not on his youth — potential customers had no way of knowing he was 11 — but on his lack of advertising expertise.
Since then, Evan has started a series of ventures, including a power-washing and deck-refinishing service and buying electronic devices in bulk and selling them on Amazon.com. He repairs computers for a consulting business.
“There was a weekend recently,” Evan's father, Dave Neal, said, “where he was doing bitcoin mining, he did a power washing job and he did a computer consulting repair job.”
Dave Neal is a serial entrepreneur who has been involved in seven startups as chief financial officer or chief executive. Today, he's managing partner at The Startup Factory, a business accelerator in Durham.
He's impressed by how much his son has immersed himself in the arcane ins and outs of bitcoin, including the financial and legal aspects, as well as the technical angle.
“It's really interesting to watch somebody in your own household participate in such a cutting-edge thing,” Dave Neal said. “He's 16, but it feels to me he is pretty much an expert in the field.”
Bitcoins aren't backed by any government or controlled by a central agency. Critics say bitcoin is little more than a Ponzi scheme. The digital currency has become controversial because the anonymity it provides makes it attractive for money laundering and drug deals.
But the digital currency gained traction when federal officials said at a Senate hearing that there are legitimate uses for bitcoins, and by attracting investors such as Tim Draper, a Silicon Valley venture capitalist who recently purchased nearly 30,000 bitcoins in a U.S. government auction. Bitcoins are accepted as payment by businesses such as Overstock.com and online game company Zynga.