What is GAW miners?
In simple terms GAW miners is a cloud mining company. It offers “hashlets” which are digital cloud miners. They are available in 1 MH/s (Scrypt) or 10 GH/s (SHA256) slices and do not have an expiration date. They also sell hashstakers which is “the word’s first cloud staking wallet”. For coins using Proof of Share it allows for the staking of these coins in the cloud. Currently they are being investigated by the SEC for their questionable business model and their operations.
The problem
First and foremost lets discuss what the hashlets actually are. Hashlets are simple ASIC miners just like the ones sold by the now bankrupt Butterfly Labs. On the website GAW miners advertises the hashlets for the following prices:
Rememeber these are only available on the cloud and will not be shipped to you. They are also obviously out of stock because of the raging demand (cough cough). Furthermore, apparently you can buy them on Amazon except instead of the advertised $10/Mhs or $6.95/Mh you can get them for a whopping $109.99. For that price you can get 1.3Mhs of Scrypt mining power. But look! right next to it is our beloved Gridseed ASIC miner which offers 340 KH/s on Litecoin/Scrypt only, using just 5-7 watts of electric! So if you buy 5 Gridseeds you will be able to mine 5*340 = 1.7Mhs of scrypt mining which is a much better deal.
Going back to our hashlets, at this point I am going to give GAW the benefit of the doubt and assume that they are just selling mining power coming from their mining warehouse. That is all good and dandy but the only problem is the business model does not make sense. Let us go over what is actually happening.
Lets say that GAW miners has a warehouse running 100Mhs of Scrypt power. Now, GAW can either use it’s mining power to mine on a multipool that mines the most profitable coin OR sell “hashlets” to customers for a premium and make more than mining a random altcoin. The problem is that the mining network is so big that the profits are only slightly above the electricity cost, so mining is only profitable for large scale operations located in areas where electicity cost is below average. Those sheep that buy single hashlets will never make their ROI simply because the amount of mining power they rented is not enough to make profit before the next difficulty increase/ before the next generation ASIC comes out. GAW miners will trick you to buy hashlets and even give you free hahspoints or mining power in order to give you an illusion that you are making money from mining. I personally mined back in the day and even then I never broke ROI. The math might make sense now and will look like you are going to be generating massive ROI on your investment, but the truth of the matter is if it was as simple to make money as to buy a hashlet and let it sit there then everybody would do it.
Let me be clear, I am NOT saying that mining is obsolete and is not profitable. There is a way to make money through mining but it requires risk and is a gamble. The most realistic way to make money from mining is to gamble on new altcoins and either mine then when they just come out on bitcointalk.org (altcoin section) OR gamble on already existing altcoins which have a feature coming up or are running a PR campaign. Customers should be aware of that risk before investing their coins into buying a virutal miner which will never break ROI if you use a simple multipool.
Another great point made by a fellow redditor is the following:
The issue here isn’t that the ROI makes them suspect – or even that their Paycoin’s ICO is a bad sign.
It’s that they don’t actually sell you anything – The Hashlet you purchase isn’t a “share in a mining farm” – as their own T&Cs state it uses no electricity. Its a “virtual miner” – in that its a concept that acts as if its mining (at least to the end user).
Next, Paycoin, oh lawd. Paycoin is just another altcoin, there is no real innovation its just branded by GAW miners to attract more buyers. I will not go in depth about all the false statements that Josh Garza has made because apparently his company’s legal firm is taking action against anybody who says anything bad about GAW miners. Here is the letter sent to coinfire who wrote an article about Garza’s false claims.
In the meantime, GAW demands that Coin Fire immediately cease and desist from disseminating suchgrossly false and misleading information by removing the article from its website. Although GAW is afirm believer in free speech and a free press, Coin Fire has crossed the line with this article, and anyonein GAW’s position would understandably make similar demands.
Why paycoin is a scam
Paycoin was launched by GAW miners with an ICO (initial coin offering) which is the first sign of an elaborate scam, those of you form bitcointalk.org know what I am talking about. Secondly, the currency was launched in order to make GAW’s mining operation more profitable since now instead of mining random altcoins them and their customers can mine their own coin – Paycoin. It is only a matter of time before GAW miners trades paycoin to bitcoin and leaves it’s customers with nothing. If you are looking for a cloud mining company do not waste your time with GAW miners, checkout leaserigs.net which offers better rates, freedom to use any mining pool you want, and a transparent operation where you can see that you are renting actual mining hardware from fellow miners. After all, bitcoin is a decentralized currency and cloud mining companies only make it more profitable to mine for the big centralized corporations, do you want another BFL or MtGox to taint bitcoin’s reputation. Stay as far away from GAW miners as possible it is not worth the risk.
Furhtermore, GAW miners also sell hashstakers which mine POS – proof of scam – oops I mean proof of share coins. Those apparently are the worlds first online staking wallet. That is simply ridiculous, you do not need any hardware to stake coins all you need is a staking wallet which all POS altcoins already have. It is ridiculous how they take advantage of unknowing customers.
Disclaimer
The above is my personal opinion which is protected under the first amendment, in the case that GAW miners tried to take down this post because it exposes their elaborate scam. For those of you in support of GAW miners I apologize for my no bullshit approach to their operation but I am sick and tired of all the scams which happen with cloud mining companies, somebody needs to step up and say enough!
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