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Friday, August 29, 2014

ZenMiner Hashlet ROI Analysis

At times it can be sort of funny to look at the cost of mining hardware compared to the estimated time for the hardware to pay for itself. While we've had occasions where hardware has hit ROI in under a month (e.g. last December you could buy a $500 AMD GPU and it would have mined enough LTC to break even in just a few week!), in general the target tends to be more like 3-4 months these days, and that's mostly speaking of ASICs.

Yes, in case you haven't figured it out yet, GPU mining is essentially dead right now. Perhaps we'll see some new coin with a different PoW algorithm that will revitalize GPU mining, but the best you can expect on X11/X13/X15/Keccak/Cryptonight/etc. is maybe a 2:1 ratio for gross income to power cost. So if you have a setup that consumes 500W of power it will cost around $1.20 per day to run that system, and you might earn $2.50 per day. A 2:1 ratio actually doesn't look that bad if you have already paid off the hardware, but if you're looking at buying $810 of R9 280X GPUs right now, which would earn about $1 per day combined profit, that's 2-3 years before you'd even break even!

So let's forget about GPUs and get back to talking about ASICs, and since I've beaten this horse to death several times already I'm going to talk specifically about GAWminer's Hashlets and compare them with other ASIC alternatives. For this discussion, note that the Hashlet is for Scrypt mining.

On the surface, the Hashlet isn't priced all that well. Initially going for $15.99 per MH, the price was increased to $19.99 and is now at $24.99 per MH. I actually thought about snagging 100 MH when the Hashlet was first announced, and I'm sort of sad I didn't, but the price per MH for running a Hashlet is $0.08. If you were to purchase 100 MH, there's no "first month of hosting for free" (which is what GAW does with ASICs), so you're looking at $8.00 per day in hosting fees. Given the current returns for Scrypt mining at most places are around 0.0004 BTC, at the initial price of $15.99 it would be $1599 to earn around $20 per day, so $360 per month after power -- assuming prices stay constant, which is of course not guaranteed. Basically, you'd hit ROI on a Hashlet in five or six months, so buying a different ASIC was a better option.

For example, the Lightning X6 ASICs that I bought were $774 and have a maintenance cost of $0.053 per HM, with a price of $18.88 per MH. The first Hashlet price was obviously lower, but again maintenance meant the break-even point would have been later. But there's a catch, right?

Here's where things become interesting: ZenMiner allows you to mine at one of several multipools (CleverminingMultipool.usNicehashTradeMyBit, and Wafflepool), and profitability on those as I mentioned is currently averaging about 0.0004 BTC per MH, give or take. If you buy a Hashlet, ZenMiner adds one more pool option: the ZenPool. I don't know where ZenPool is mining that they're getting better returns, but right now they're claiming an average payout of 0.00065 BTC per MH -- over 50% higher than the next best pool! So if you bought a Hashlet at the initial price of $15.99, for the first month you'd make nearly $10, and the second month you'd make $7.35, meaning you'd hit ROI in less than two months.

Of course, as I said at the start, it's funny how prices on ASICs fluctuate with the approximate rate of returns. Last year around this time for example, you could find one of the USB Block Eruptor Bitcoin ASICs for as little as $10, but when Bitcoin prices shot up from $150 to $1000, the price of the same hardware shot up to $80 as well. The people selling the ASICs are basically holding out a carrot (ROI) that's always 3-4 months away at the current price/difficulty ratio. The same thing has happened with GAWMiners' Hashlets.

When Hashlets were $15.99 per MH, the company was sort of giving away long-term earning for short-term gain, and while they no doubt made money on the sales regardless, like most businesses they want to make more money! So they increased the price to $19.99, which would result in hitting ROI at the current 0.00065 BTC/MH in 2.5 months. Since that's still pretty fast they bumped the price up again to $24.99, and now you'll hit ROI in three months. Again, this is all done with calculations at the current price/difficulty, which has been somewhat static for the past month but could drop again. Realistically, I'd guess you'll hit ROI in about four months with a Hashlet.

There's the other factor we haven't mentioned as well: GAW's Vaultbreaker ASIC. That ASIC will reportedly do 750MH at 1500W or something, which means the power costs to run the Vaultbreaker would be $0.005 per MH. Since GAW will obviously be the first company to have any Vaultbreakers up and running, we can expect a few things. First, they'll make more money off of maintenance fees for a bit, and second, the price and maintenance cost of Hashlets will undoubtedly go down. But if the market suddenly has thousands of new ASICs hashing at 0.5 cents per MH, it's likely we'll see prices and/or returns for Scrypt pools drop quite a bit as well, maybe by as much as 5-10X.

Alternatively, we might see concentration of Scrypt hashing power into the hands of fewer people result in fewer coins (e.g. LTC) being dumped at market prices, so we could see an uptick in value as well, but that's the optimistic viewpoint and I'm not sure it's very realistic at this point. BTC isn't going anywhere, and LTC will stick around as well, but I don't think LTC is going to go up 10X in value any time soon. The alt-coin apocalypse has done a lot to destroy the credibility of any coins other than BTC, so I suggest you hash accordingly.

As far as the Hashlets are concerned, they're still a reasonable venture, and with no Lightning X6 ASICs available at this point at a price I can recommend, I don't see any other good options. (The Thunder X6 is about half of a Lightning for $450, so $100 extra for the same 40MH from a few weeks ago.) I do wonder if GAW might already be getting some of the first Vaultbreakers up and running, though. Think of that: $25 per MH with 750 MH available would mean $18,750 per Vaultbreaker, a far cry from the $9000 initial pre-order price. Lesson to be learned: ASICs are a business, and most of us small fries are lining the pockets of the big whales. So, nothing new under the sun in that respect.

1 comment:

  1. You should update this post saying that the "Hashlet" aka Scamlet is now being called a Hashlet Prime and they raised the price to 39.99.