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Saturday, August 30, 2014

Alpha Technologies and KnC Titan: RIP?

Sadly, what happened with the rush to Bitcoin ASICs has repeated itself with Scrypt ASICs. It's not really surprising, but simply saying you have a company that is going to build a high performance ASIC is an entirely different story from actually shipping the ASICs on time. Butterfly Labs was notoriously late with their original ASICs, to the point where by the time mass shipments actually started the Jalapenos and other products began, you were lucky to earn back your initial investment. The Alpha Technologies Viper now belongs to that same family.

I've posted quite a bit lately about GAW Miners, and the reason is simple: they're kicking the tar out of everyone else! When others were trying to sell the various Zeusminer ASICs for $1500, GAW had them for about half that price. Now, they've introduced the Hashlet, a cloud-mining ASIC at a reasonable price. I said in my last post that the $0.08 per MH for maintenance was a bit high, and it is, but it's still better than waiting for hardware that might not show up for a week, month... or ever. And with their new Hashlet options, they've basically killed off any hope of the Alpha Technologies and KnC Titan ASICs making a significant profit...and in fact, it's somewhat doubtful that those ASICs will even make ROI!

What that means is that I'm calling my $3000 preorder of the Viper a loss. I still owe $7000, but even if I pay that what will I get? At best, I'll receive a 250MH Viper. The $3000 is a sunk cost -- I've lost it -- but the $7000 is a different matter. Let's call the price of the Viper $7000, then. Is it worth it at this point? The answer is a resounding "No!" And the reason is simple math, and GAW Miners' Hashlets.

The best offering right now appears to be the new Zen Hashlet, which is locked into mining on the ZenPool. And it just so happens that there's a 250MH Zen Hashlet avaialble, which will get you up and hashing at 250MH within seconds. Yes, you read that right: SECONDS! And what's more, the cost for a 250MH Zen Hashlet is only $5,487.50, which by my math is $1500 less than the $7000 to complete my Viper pre-order. The KnC Titan isn't looking much better, as the second batch is supposed to be 400MH for $7000, but it won't ship until one month after the first batch, which of course still hasn't shipped so you're looking at minimum two months from now before you can have your 400MH Titan.

I just did the math in my previous post, but of course with the Solo Hashlets, prices changed a bit. Right now you pay $21.95 per 1MH on the Zen Hashlet, and even though there's no first month of "free" hashing -- you start paying for maintenance from day one -- it still works out to be the best ROI. If you continue to average 0.0006 BTC per MH on ZenPool (which is slightly below the current rate), that means you make around $6.60 per month (after the $0.08 per MH maintenance fee), yielding an ROI time frame of just over three months. So, order a Zen Hashlet today, and you could be in the black (i.e. profitable) within three months, and I'd say four at worst.

Best-case if your Titan arrives in a month you'll be doing 300MH, and since I can't find anything that pays more than ZenPool you're likely to get around 0.00045 BTC per MH, or 0.135 BTC per day (minus power costs). If you're lucky, you might hit ROI four months after you're up and hashing with a first batch Titan. And the Alpha Technologies Viper is even worse: 250MH, let's say it arrives in a month, and not even accounting for the power cost (which will be around $130 per month for $0.10 per kWh) you might make back your $10,000 investment in six months!

Obviously the GAW Hashlets are not guaranteed to earn money, as prices could still take a dive, but again: simple math. Three months to hit ROI on a Hashlet, four months to hit ROI on Titan, and six months to hit ROI on the Viper. Which one would you buy? The only thing missing with Hashlets is flexibility, so if you wan to go out and try mining every new Scrypt alt-coin, you can't do that with a Hashlet. But if you want to do that, you could just go rent hashing power on Nicehash or some other rig rental service, pay less than the going rate of returns from ZenPool, and still come out ahead.

The real winner here is obviously GAW Miners. I suspect if they haven't arrived already, the Vaultbreaker hardware is coming online very soon. GAW was selling the pre-orders for $9000 at the start, and with 750MH available the going rate now is about $15,000. The actual cost of the hardware (not counting R&D) is probably around $2500, so once mass production starts GAW can make a killing. Let's just hope we can all avoid killing the goose that lays our golden Bitcoin eggs.

RIP Viper Pre-Order. It was a risk from the start, and like many risks it proved to be a "mistake". The only good news is that I cashed out of some Darkcoin to pay for the pre-order back with DRK was trading at about three times the present value. Thank goodness I didn't pay for the outstanding $7000 back in June. I'll be pretty surprised if Alpha Technologies ever ships anything at this point, as we're nearing the end of Q3 and all they're showing is a case and some pre-rendered images. Not good, guys, not good.

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