THIS THREAD IS LOCKED. PLEASE CONTINUE HERE:https://bitcointalksearch.org/topic/gaw-josh-garza-discussion-paycoin-xpy-xpyio-ion-ionomy-always-make-money-857670September 6, 2014
Let me start with a disclaimer: I'm not particularly fond of GAW and its business practices and that is well
documented around here. Feel free to take what I have to say with your daily dose of sodium.
With that out of the way, let's take a look at GAW's main product:
The Hashlet.
Hashlet as it's marketedHashlet is a "Digital Cloud Miner". It is sold as an amount of hashrate, available in 1 MH/s (Scrypt) or 10 GH/s (SHA256) slices. It does not have an expiration date. There is a daily maintenance cost of 0.08 USD (as of September 6, 2014) per single slice, which GAW claims will go down in the future to ensure hashlet's continuing profitability.
Hashlet is "datacenter optimized" and can only be hosted in GAW's own ZenCloud service. It can not be redeemed for physical hardware or returned for a refund. A marketplace to trade with other hashlet owners may be available in the future.
Hashlets are sold in several flavors, including HashletGenesis (SHA256), HashletPrime (switchable between Scrypt and SHA256, with up to a 1:40000 hashrate ratio), and various pool-branded Scrypt versions of Hashlet Solo. HashletPrime and ZenHashlet Solo have access to ZenPool, "World's Most Profitable Pool", which earns 50%+ more than any other Scrypt pool.
Hashlet's initial price was $16 per single 1 MH/s slice, which later became HashletPrime and now costs
$40 $50. Hashlet marketing has shifted significantly since its announcement. Initial claims of "incapable of negative ROIs" and "always make money" (giving title to this thread) have been changed to "obsolete proof", "depreciating costs" etc.
After hashlet's announcement on August 16, 2014 many questions arised as to how it works, how does it achieve its profitability, or does it even exist and in what form. Some questions have been answered, some have lost their relevance, and some others still remain unanswered.
Questions and some answers1) Q: Does the hashlet exist? A: Yes and no.The hashlet almost certainly does not exist as a hardware device depicted on GAW's website. It may exist as a slice of a larger hardware device. It does exist as an investment vehicle that produces daily payouts, however the source of these payouts is not fully known.
https://bitcointalksearch.org/topic/m.8605520 (ZenMiner TOS)
Selecting a Pool does not imply physically or electronically mining at the selected Pool. Rather, selecting a Pool determines a Payout corresponding to a calculation based on the selected Pool’s payout (based on, for example, real-time Megahash/second/day calculations). A Hashlet is virtual software. You will receive Payouts according to the Pool with with the Hashlet is associated. You expressly understand the the Company’s sole obligation to You is to Provide a Payout based on the Pool you choose.
It is unclear why GAW chose to brand Hashlet Solo with pool names if it is not actually mining on those pools.
5) Q: Will the hashlets achieve 100%+ ROI? A: Unknown.Early hashlet purchasers at $16 are likely to achieve full ROI due to the superior ZenPool profitability. It is much less certain at the current price of $40 for HashletPrime. Hashlet Solo costs between $16 and $22. Daily maintenance fees are about 25% of earnings for HashletPrime/ZenHashlet and and about 50% for other Hashlet Solos as of September 6, 2014. It has been promised by GAW that maintenance fees will decrease over time to sustain profitability, however further details are not available.
SHA256 hashlets at $10 per 10 GH/s and $0.02 daily maintenance fee would need BTC difficulty increases to average ~5% to achieve 100% ROI and at 5% it would take ~280 days. This is similar to other cloud mining services such as Bitmain's UMISOO: ~260 days at 5% (UMISOO has lower initial costs and higher maintenance fees than hashlet).
Such a low BTC difficulty increase over the next ~9 months is highly unlikely, so ROI of SHA256 hashlets will depend mostly on the promised reduction of maintenance fees.
6) Q: ZenPool pays an 11% interest on customers' BTC balances in the form of HashPoints, which can be later redeemed for hashlets. How are customers' funds being used and secured? A: Unknown.The are no deposit or investment risk disclosures. There is no mention of HashPoints in ZenMiner Terms of Service (TOS).
7) Is the Vaultbreaker, GAW's 750 MH/s "Titan killer", still on track to be delivered in Q3/Q4 of 2014? A: Unknown.Despite the delays suffered by Flower Tech and Ensilica, GAW's rumored partners in Vaultbreaker production, GAW still insists the device is on time. However there were substantial incentives for Vaultbreaker Batch 1 buyers to convert their purchases into Hashlets and similar incentives are expected for Batch 2. Some buyers and observers have speculated that the hashlet may be a funding source for Vaultbreaker development.
https://cryptocointalk.com/topic/14763-hashlets/?p=126748
This is the 4th version of this post. Older versions can be found below in their entirety.
Previous versions of this postLet me start with a disclaimer: I'm not particularly fond of GAW and its business practices and that is well
documented around here. Feel free to take what I have to say with your daily dose of sodium.
With that out of the way, let's take a look at one of GAW's latest endeavors:
The Hashlet.
The marketing blurb claims that the Hashlet is a Digital Cloud Miner that will always remain profitable. Promised future enhancements include changeable algorithms, currently only Scrypt is supported.
Major unanswered questions about the Hashlet:
1) Hashlet has exclusive use of ZenPool, "World's Most Profitable Pool" according to GAW. Nothing is know about this pool, except some hints that GAW have been acquiring mining pools and hash rental services. However ZenPool provides profitability that is 50%+ above any other Scrypt pool: ~0.00073 BTC per MH/s per day as of August 25, 2014, compared to ~0.00043 BTC per MH/s per day on WafflePool, the best paying Scrypt pool at the time. ZenPool payouts exceed even rental services where prices top out at ~0.00060 BTC per MH/s per day.
Question: how does ZenPool achieve its profitability?2) As of August 25, 2014 ZenPool hashrate was in excess of 250 GH/s. That is 1/3 of LTC hashrate and about twice the hashrate of all other Scrypt coins combined. Considering that LTC profitability is around 0.00038 BTC per MH/s per day and ZenPool pays nearly twice that, the only plausible option to sustain the payouts would be for ZenPool to mine twice as much LTC as it's advertised hashrate, i.e. 500 GH/s. However that would mean 2/3 of LTC network hashrate belongs to GAW and there is no evidence to support that.
Question: where is ZenPool's hashrate?3) GAW/Zen is paying an 11% annual interest rate in the form of Hashpoints (can be redeemed for Hashlets) on all BTC balances held by customers on the cloud mining site. This includes not only balances accrued through mining but also BTC transfered by customers into their Zen accounts from elsewhere. There is no information available on how these balances are secured or what is the intended purpose of this incentive.
Question: How are customers' funds being used and secured?Other questions:
1) Admins/owners of mining pools (TMB, CoinKing, Multipool.us, etc) have repeatedly asked GAW/Zen to explain the apparent lack of GAW/Zen hashrate on their pools when customers choose to use one of those pools. This has been rendered mostly obsolete by ZenPool being the obvious choice for Hashlets, as well as the statements below. However this was never addressed or observed directly, for example there was no significant decrease in hashrate on any of non-GAW pools after GAW announced they will only mine on their own pools.
https://hashtalk.org/t/questions-you-have/6487/67When a miner switches pools, depending on a few factors, our controller will often switch the user to a different physical miner that is already mining to the pool they select. So in other words, there is X amount of hash mining to all pools, all the time.
https://hashtalk.org/t/zencloud-pool-announcement/8136After careful review, we've decided pointing our hashing power to these pools is counterproductive for our goal of promoting stability in this industry. Instead, we will be sending our hashing power to our own private pools, but keeping your payouts 100% based on the pool you select. This effectively gives you access to your favorite pools, but now with nearly perfect uptime.
2) Is the Hashlet its own hardware device? A plausible theory would be that the Hashlet is a 1 MH/s "slice" of existing Scrypt hardware, e.g. Zeus or Innosilicon. GAW insists it owns "proprietary hashlet hardware", which raises the question how this hardware could have been developed and produced given the timelines and other constraints. There is also a promise of future "changeable algorithms", which would imply hardware far more advanced than any other vendor has been able to produce.
3) Is the Vaultbreaker, GAW's 750 MH/s "Titan killer", still on track to be delivered in Q3/Q4 of 2014? Despite the delays suffered by Flower Tech and Ensilica, GAW's rumored partners in Vaultbreaker development, GAW still insists the device is on time. However there are substantial incentives for Vaultbreaker buyers to convert their purchases into Hashlets.
Let me start with a disclaimer: I'm not particularly fond of GAW and its business practices and that is well
documented around here. Feel free to take what I have to say with your daily dose of sodium.
With that out of the way, let's take a look at one of GAW's latest endeavors:
The Hashlet.
This is its announcement on Hashtalk forum:
https://hashtalk.org/t/mining-has-finally-evolved/6125If that doesn't raise any red flags then I don't know what would. Some memorable quotes:
A Hashet is capable of things no physical miner or virtual miner could ever be! Simply put, a Hashlet is a Digital Cloud Miner that keeps getting better
We’ve produced a miner incapable of negative ROIs because the maintenance fees can reduce over time! Thats right, there will never be a time a Hashlet cost more to run then you make, and they will always make money.
Hashlets will be the only miners that will be able to mine to the new ZenPool, the Most Profitable Pool in the World [...] that can deliver payouts almost twice as high as the top pools today!
Hashlets are upgradeable. How can a digital miner be upgradeable? Simple, because its digital and we built it
Originally this post started as an analysis of ZenCloud service, one of the components of the Hashlet infrastructure. Since then GAW have acquired ZenCloud from its owner/founder and merged it with other parts of their business as described above. Below is the original post in full. Some parts of it no longer apply, since the Hashlet does not have a physical delivery option and it's explicitly stated it WILL ALWAYS MAKE MONEY.
Let me start with a disclaimer: I'm not particularly fond of GAW and its business practices and that is well
documented around here. Feel free to take what I have to say with your daily dose of sodium.
With that out of the way, let's take a look at one of GAW's latest endeavors:
ZenMiner Cloud.
Here's zenMiner_Eric introducing the service conveniently in my thread, which is actually what prompted me to do this writeup:
https://bitcointalksearch.org/topic/m.8136793tl;dr: ZenMiner Cloud will host miners purchased from GAW.
So far so good. Here is why I think though that the whole set up is
a hoax:
1) GAW used to provide their own hosting. Not anymore. Zen is the only option for hosted GAW products. GAW hosting used to experience all kinds of delays and stability issues, especially with their Gen A products (rebranded Zeus space heaters). Zen however is magically able to provide 24-hour set up and 99.9% uptime with what seems to be a one-man operation.
2) Miner hashrates on Zen cloud bear little resemblance to real life. For example GAW promised to provide the initially specified 478 GH/s with hosted AntMiner S3, even though the actual hardware was downgraded by Bitmain to 440 GH/s. How is that possible remains a mystery. Below is a chart of incredibly smooth Falcon hashrate on Zen cloud, and a chart for a real Falcon:
Zen:
http://i.snag.gy/uGP28.jpgReal:
http://i.snag.gy/51yjE.jpg3) Zen cloud does not allow to specify your own pools. It has a list of predefined pools (major ones like CleverMining, NiceHash, etc are included) but there is no proof anywhere that it's actually mining on any of them. There were some questions raised on hashtalk forums about why there is nothing visible on smaller pools when Zen rigs are pointed to them but I don't believe these questions were ever answered. Pool earnings "based on most recent pool payouts" as they put it are clearly unrealistic (I happen to have some hard data on the real numbers). For example as of now NiceHash is estimated at 0.0008 BTC per MH/s per day, WafflePool roughly the same, which may sound close to reality, but all others are just 5% below and very similar to each other, which is completely bogus.
4) Zen will deliver your miners if you choose to "unhost" them, but that may take two weeks. This can be interpreted in two different ways. One would be that this is a ridiculously long amount of time and it's purpose is to discourage taking delivery, but for someone really persistent they need two weeks to find a used miner. Or see below.
Here is why I think this is
a real thing:
1) Zen will deliver your miners if you choose to "unhost" them.
Now since I'm clearly short on that "real thing" part, I'm very interested if anyone has any further proof. Please speak up if you:
- have received a delivery from zen cloud - how long did it take, did you get what you paid for etc
- can show any kind kind of mining proof, perhaps a payout address that can be traced to a publicly listed address on nicehash
- live across the street from the massive zen cloud facility and can share some pictures of the nuclear power plant next to it and zenMiner_Eric carting miners around in the middle of the night
- have anything else that in your opinion contributes to the subject (or doesn't, flame away if you're so inclined)
One more thing. I've seen other similar secretive mining services often called "ponzi schemes". Technically a properly set up fictional mining service does not have to be a ponzi. As long as the amount of money charged upfront plus monthly fees exceeds what the "miner" will ever earn such service does not depend on new investors to pay out previous investors, i.e. is not a ponzi. It will be simply unprofitable, which is not uncommon in crypto mining.
