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Monday, November 10, 2014

Hashlet ROI Projections with HashCoin ICO

I had an email from a reader that I just responded to, and after running the calculations I figured this was worth sharing. The first question was easy enough: does the amount invested right now affect the time to ROI? The simple answer is that, generally speaking, the amount invested initially doesn't really change the ROI. Whether you invest $250 or $10,000, if you do the same thing with the money you will hit ROI in the same amount of time. The much bigger factor is the time of investment, difficulty/payout rate from Hashlets, and the current price of Bitcoin (and future price of HashCoin).

These are of course very difficult to predict with any sort of accuracy, so what you end up doing is making a guess. The reader said he had $250 to invest (or "risk" if you prefer), so here are some numbers I put together using the information from the past few posts as well as projections made by GAW. Note that the Hash Market prices can fluctuate quite a bit, so I just took the current minimum prices for Hashlet Prime and Zen Hashlet for these estimates.

Let's say you go and buy six Hashlet Primes right now with $255 on the Hash Market ($42.50 per Prime, though it's been as low as $35 or so in the past week). The hope is obviously not to hit ROI strictly through mining but to get there via Hashbase and HashCoin. Starting with an optimistic forecast, let's say HashCoin really does sell for $4 to early purchasers who mine HashPoints, and then it goes up to $20. In ~30 days when HashCoin is supposed to launch you would have roughly 3000 HashPoints (worth nominally $30 -- note that you might be able to Double Dip on the HashPoints Pool to earn as many as 4500 HashPoints), so you can use those to buy 7.5 HashCoins. Those HashCoins then end up being worth $150 when the fiat ICO takes place. You would have $150 in HashCoins plus your six Primes, and the Primes could very well go up in value also -- maybe to $50 or even $75 each. So best-case, in a month -- more likely two, as I expect HashCoin/Hashbase launch won't happen in exactly 30 days -- you could end up with $450 to $600 off of an initial investment of $255.

As a second alternative, since Zen Hashlets can also do HashPoint and are far cheaper (around $13.50 each on the Hash Market, though I've seen them priced as low as $11 or so in the past week), you could use $256.50 and buy 19 Zen Hashlets. Using the same numbers as before, in 30 days you have ~9700 HashPoints, which you can use to purchase 24.25 HashCoins at $4, and those go up to $20 and so you have $485 worth of HashCoin at that point. You also still have the 19 Zen Hashlets, but I wouldn't expect those to hold value as much so let's say they're worth $12 each; that's another $228, so all told you might get $715 out of the initial $256 investment.

Those are both "best-case" options, however; a less optimistic scenario is that HashCoin's launch is pretty rough and the price doesn't actually stay anywhere near $20 for fiat but drops to $2-$4. With the less successful launch, Primes and other Hashlets are not as viable so they don't hold their value as well -- let's say Primes drop to $25 each and Zens drop to $5 each.

Using these "pessimistic" numbers ("worst-case" as usual is that HashCoin/GAW ends up as a massive failure and you lose everything, but this is highly unlikely), scenario one gives you $15-$30 worth of HashCoin and $150 in Primes, so in one month you would have a potential value of $165-$180 from your $255 investment. Going forward from there, if you continue to make $10-$30 per month, you'd hit ROI in ten months total ($2 HashCoins and $10 per month) or potentially as soon as three and a half months ($4 HashCoins and $30 per month).

Scenario two gives you $48-$96 in HashCoins with $95 in Zen Hashlets, so you're at $143 to $191 in one month, and then $10-$30 per month from continued mining with the 19 Zen Hashlets. ROI would occur in twelve months ($2 HashCoins), but you might hit ROI in as little as two months ($4 HashCoins and $30 per month).

Given the above, "risking" $250 or so isn't a bad idea -- if you can't afford to potentially lose $250 then you've got much bigger problems to worry about, right? I wouldn't necessarily go crazy and invest your life's savings into Hashlets right now, but back in August I had about $7000 worth of cryptocurrency holdings (mostly in Darkcoin at the time) that I ended up exchanging for Bitcoin and buying ASICs and then Zen Hashlets. If I had lost everything, it would have been a bit painful, but I could continue living without too much trouble -- I just wouldn't have any Bitcoin savings left. Instead, I've nearly doubled the value of my investment, and I continue to earn about $400 per month -- and that's if I do nothing but mine for Bitcoin.

By the time HashCoin actually launches, if all goes well I should be able to buy close to 800 HashCoins (give or take). That means in a month I should have at least another $1600 earned (at a value of $2 per HashCoin) and potentially as much as $16000 if HashCoin really hits the "projected" $20 per coin. Not bad for a $7000 investment. And I'm still kicking myself for not buying Hashlets when they first launched at $14.95, back before they became Hashlet Primes. I could have had about 450 Primes, which even now would be worth close to $20,000. Hindsight is always 20/20, though.... :-)

Short summary: if you're interested in getting in on Hashlets, it's not "too late". Estimated returns are lower now than what you would have made if you had the foresight to invest back in August, but you could still easily double (or triple, or even quadruple) your value in the next year. You could also lose everything, yes, but that's very unlikely -- maybe losing half would be a better estimate of the real floor. If you haven't joined already and are interested, drop me a note and I'll send you an invite, and you can get started. I'd love to see some of you take the $250 challenge outlined above and see if you can hit ROI in as little as a month or two, or if it ends up taking six months or more.

Last note: HashCoin is officially supposed to launch in just 14 days. If it really launches at that time and the HashPoints Pool is turned off for Zen Hashlets, that will obviously change the ROI projections outlined above, making Primes a safer bet. HashCoin will start with the ICO (Initial Coin Offering) for HashPoints, then open up to fiat investment. I don't know how long that will actually last, and it's still not clear when precisely HashCoin mining will be opened up to the public. I guess we'll know in a couple weeks! I'm guessing 30 days before it really gets going, which is why I used that figure for the above calculations.

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