Mining Suckers: Coinmine "Holy Shit" Scheme

-edited

Coinmine offers a $799 mining box. Let's investigate coinmine for obvious flaws.

Holy Shit Experience

Obvious Losers

Not everyone who buys a coinmine will lose money. Rather, the expected return from one of these units is negative from the get-go and will be increasingly negative as mining cards and the competition improves.

Printing Money in Minutes?!

Why not order 20? 1,000?

Digging into the details

Let's dig into the details. Coindesk reports The $799 Coinmine One Will Look Like an Xbox and Mint Crypto Money.

For $799, the Coinmine One will sport a miner that can generate any one of the following out of the box: ether (ETH) at 29 Mh/sec, monero (XMR) at 900 h/sec, zcash (ZEC) at 320 h/sec and ether classic. With updates next year, it also expects to be able to run a stake for a Bitcoin Lightning node, Dfinity or Filecoin.

It uses roughly as much power (120 watts) as a PlayStation 3 during game play and runs at 40 decibels (quiet compared to the cacophony created by other mining products).

If the company is right and consumers love it, don’t look for today’s mining hobbyists to agree. There’s nothing about its specs that compares to other miners sold on the market today that those much more tech savvy users are using. Coinmine One’s hash rate is much lower than those devices, and the price for its hash rate is higher.

Mining Suckers

Here's the deal folks, and it should be obvious.

Yes, coinmine will "mint money", for itself of course. This is called mining suckers.

If Coinmine mining actually turned a profit, the company would not be selling the boxes, they would be running a coin mining operation.

Mike "Mish" Shedlock

Comments (7)
No. 1-6
Carl_R
Carl_R

"If Coinmine mining actually turned a profit, the company would not be selling the boxes, they would be running a coin mining operation."

It depends. If it's making massive profit, yes, they would run them themselves. If it is profitable, but with, say, a 2 year payback, they might sell them, which allows them to make an immediate profit, and avoid the risk of falling crypto prices. So, there are situations where they might prefer to sell it, even though it is still profitable.

Note that in no way am I saying that it is profitable to buy these. I'm only saying that it isn't impossible that it is profitable.

Bardenio
Bardenio

Think of all the kids in the dorm rooms sucking down free electricity from the taxpayers. This is a money maker if dad buys it for that kid.

abend237-04
abend237-04

I have a cold fusion backup power supply for it in a coke bottle. Send money.

Mish
Mish

Editor

"It depends. If it's making massive profit, yes, they would run them themselves. If it is profitable, but with, say, a 2-year payback, they might sell them, which allows them to make an immediate profit, and avoid the risk of falling crypto prices. "

I appreciate that and agree 100%. I recognized that prospect upfront.

But it still presumes a long-term profit. Coinmine takes $900 today for mining profits that take years to recover given its inferior graphics card which I suspect will be totally worthless in a year or so.

The higher Bitcoin goes, the more likely other resources will go into better graphics cards!

Even if Bitcoin collapses, inferior cards will be inferior at mining.

I am confident Coinmine will come out with a pay-for card upgrade. Then another, then another.

Carl_R
Carl_R

Thinking about this, most people that buy this will neglect to factor in the electric use and the extra AC load. They will think it is free to run, so they will think it is far more profitable than it really is.