I bought into Gawminers’ ZenHashlets a while back. When opportunity knocks… it is one of the better deals in the coin business.
In case you are not familiar with it, you buy a ‘digital miner’, the Hashlet. ZenHashlets mine altcoins on multipools, that way you are not tied to one particular coin like bitcoin with its heavy competition and biweekly 15% difficulty increase (and yield drop).
They cost 21.95 dollars and come with an 80% buyback guarantee (in dollars, paid in bitcoin). The top pools it can mine on yield 0.0006 btc a day, roughly 24 dollarcents, and each miner has an 8 dollar cent daily general fee. That’s 16 dollarcents net yield a day, 0.8%.
Currently with the miner at 21.95 (20.95 for existing customers) and an 80% buyback with 16 cents a day yield, after about 30 days a customer cannot lose a dime on the miner, your max loss on day 1 is 4.50 dollars and after 30 days, 0 dollars. After that it is all yield, and the Hashlets do not expire.
But what is more interesting : this setup creates an elastic ‘gold standard’.
That is a side effect of a basic fee in dollarcents and a buyback guarantee in dollars, paid in bitcoin. If (yield * bitcoin exchange rate in dollars) drops to 8 dollarcents, the miner is no longer profitable. At 0.0006 btc daily yield, once the bitcoin exchange rate versus dollars, through lack of market demand, drops to 133 dollars, the daily return is 0 cents.
At that point, people will opt for the 80% buyback and GAWminers will have to acquire enough bitcoin to pay back the equivalent of 16.50 dollars in bitcoin. With a large enough userbase, that could add enough demand to drive the bitcoin price back up. A form of ‘pegging’, an elastic ‘gold standard’.
This kind of mechanism creates automated buy support on bitcoin, in this case at 133 dollars. Effectively it eliminates the chance of a flashcrash in the bitcoin market.
Nice move by GAWminers. It is the first time I see something like that in the coins market. It isn’t perfect but the concept is sound. It part inverts the existing business model in the bitcoin market, the security they offer the customer secures the market. GAWminers announced their plan to reveal their Project Prime by october 23rd, and hint at a similar move, a gamechanger that will end the ´downward spiral´ of bitcoin. If it involves a similar mechanism, they might actually pull that off.
By the way, this is not an endorsement.