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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I bought hashlets and have got my return on investment back, so far they have done as advertised.
I have already made big profits. Your story is lies
Thank you for writing this article. More people need to get informed about the coming collapse of GAW
Who said people never made money in ponzi schemes, just because you got your money back doesn’t mean the biz is legit.
The only way people make money there is from joining early on cheap prices, then selling for much higher and leaving. As someone who was a first week zencloud user, I saw almost the whole thing unfold and collapse.
Uhh.. don’t use LeaseRig – use maybe BetaRigs or MiningRigRentals. Because GAW controls LeaseRigs.
Same here, hashlets were really profitable 2 -3 months ago. GAW used to be great hardware resellers too. What they are planning now is unknown, even the biggest company can go bankrupt.
Thank you for the truth! I have lost respect for many people that praise GAW, Scott from CCN, Crypto Mining Blog, Badbitcoins, BitJane and some others, I thought they were good people at 1 time and tried to help the community from this type of mess. Thank you and Coinfire for exposing them. I hope they get shut down soon.
The owner of this site is deleting negative coments… all about free speech, right?
I am just deleting comments which use foul language. As long as you can express your feelings coherently I have no problem leaving it.
More people need to get facts correct about GAW before posting things like this and do there own thorough Due diligence. Clear to see they are not a scam if you take the time to look at facts and not the crap on some hate forums.
Has anyone noticed Paycoin is real and after not only 2 days has a massive market cap bigger then LTC. This is even before paybase and all major exchanges start accepting the coin. How can this be a scam???
the author of this “article” needs to come out from under the bridge. I just installed new wood flooring with the profits I have made at GAW…#success-envy
Josh promised the following on hashcoin talk:
“Hashlet Primes will get every single amp in HashStore FREE, forever!
That’s right. Take a look at some of what’s to come.
• Want the Reduced Maintenance Boost? Free on Primes.
• Want to the Pool Rate Lock-in Boost? Free on Primes.
• Want the % Increase Payout Boost? Free on Primes.
And we’ve only scratched the surface! I cannot emphasize that enough.”
Not one of the above promises was delivered, Truth is the only people who ROI’d were those in at the very beginning during the bait phase impossibly high GAW virtual zenpool payouts.
Why Josh allows even non-customers to gain profits and rape XPY price before loyal customers get their share from long-mined hashpoints?
I’ve actually made 1.2 BTC profit since two months and it’s not a scam.
Actually it will be available for those who still have Primes when hashbase launches.
BOUGHT FROM GAW AND LOST LOST LOST……I JUMPED OUT TO SAVE SOME DIGNITY AND MONEY LOST!!!!
The author of this article I believe has an intrest in gaws collapse..which I doubt is going to happen. I have already posted a profit and his method of making money mining is NOT the only way as this guy claims.
Everyone is understandibly wary of anything new…but the funny thing is this entire industry is new and
growing…there will be scammers and losers just as there is on Wall Street, that is the nature of investing.
Also he seemed to imply that the miners did not pay for electricity which is not true , there is in fact a maintenance fee, that covers that. At times the profits were great and at times they sucked. This is also the nature of ANY business. There seems to be a group that does not want anything to be succesful except bitcoin…sorry thats not going to happen…nor is paycoin going to be the only success. So get used to the competition and truly help the altcoin community by bringing postives to the table..new ideas..innovations, instead of Fud. That is what Gaw seems to be trying to do and I hope it works before the fiat world and their banking industry finishes us off and lays us to waste as they have been doing to people for decades.
That is only if you are intrested in profiting on trading hashlets…which can be done…that does not make it a ponzi as your statement seems to imply….altcoin profit is low right now….that should not surprise you, there are to many coins without the proper marketing and infrastructure to survive.
great points mate, appreciate the article
i like your comment. especially the part where you don’t actually address the blatantly obvious issues with GAW presented by this article. really makes you look intelligent and clever (and not some useless piece of shit zombie that got scammed by — literally — a professional scammer)
now now tankjr, what have you done since besides dump xpy for btc. You bought your floors with btc. Not xpy… you might be able to get some chilli sauce.. and I know that was posted a month ago but nothings changed, gaw is still a scam.
Are you dumb? its a 97% pre mined coin, its worth fuck all. Even less now that nothign works..but go buy chilli sauce though, I bet you sold out anyway at least by now.
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