Months ago when I was still buying specialized hardware for mining altcoins (digital currencies other than bitcoin), I purchased a hardware product from GAW Miners. At the time, they had just launched their cloud mining service, called ZenCloud, which lets customers interested in mining bitcoin purchase “hosted” mining solutions. So, rather than buying physical hardware and operating it at home or in your own leased data center space, they sell you the hardware and host it at their dedicated data center. They charge a daily maintenance fee to cover their overhead (electricity being a major cost), and you “manage” your mining rigs through a web interface.
A “Hashlet Prime” – the most sought-after cloud mining product at ZenCloud
Being a hardware enthusiast, and having already set up my own dedicated space in early 2014 for bitcoin and altcoin mining at a small industrial space I leased on the other side of town, I didn’t pay much attention to GAW’s cloud offering; I just ordered the hardware I wanted to add to my existing operation. However, as part of a promotion, they gave me mining power on their cloud platform equivalent to the physical hardware I had purchased, which was activated immediately. That was fun, I kept an eye on it, and it actually paid pretty well. As the months went by, GAW expanded their cloud mining operation significantly, and I bought a few more “miners” here and there when they would send out a coupon or run a promotion or whatever.
Before I knew it GAW became very popular among digital currency miners and investors. Their platform underwent a series of upgrades and improvements, and each time they offered an upgrade path for “early adopters” (which included me, despite my initial disinterest), I took it and upgraded my cloud mining products.As GAW’s service increased in popularity the demand for cloud mining products became so great that they built and released their own marketplace where customers could buy and sell their cloud miners. The prices kept rising, and when they announced plans to launch their own digital currency, with promises of never-ending profits and, frankly, an absurd target value for the new asset, I figured it was probably a good time to cash out. When someone begins making promises that are just obviously too good to be true, that’s when I tend to start looking for the exits.So I started investigating their "hash market" where I could unload my cloud miners and recoup my initial investment (which was very small) along with the yet-unrealized profit I had accumulated (which was substantial relative to my investment). Seeing the pressure building inside this little cloud mining bubble, I decided to list my miners for the lowest price on the market, so I could get out fast. But each time I listed one for sale, I could never see it on the market. A friend in a chat group where I keep in touch with other digital currency miners and traders told me the system doesn’t allow you to see your own listings in the market. “That’s odd,” I thought. So I created a new account in order to view the marketplace as my potential buyers see it, and discovered that my listings were priced quite a bit higher than I had specified. After doing a little math and experimentation, it became clear that GAW was tacking an extra 5% onto whatever price at which sellers were listing their cloud miners.
Here’s how it works:
1 – List a “Hashlet” for sale on the Hash Market
The system takes you through a series of steps where you set your price and agree to the terms.
There is even one final step where they reiterate your sale price. They tell you multiple times that you will be selling your miner for a specific price, giving you every impression that this is the price your miner will be sold for.
2 – Use a different account to see your listing on the market
And you will see that the price is 5% higher than what you specified. No wonder they don’t want users seeing their own listings! Then they would all know that GAW is taking 5% on both sides of the transaction!
3 – Discover the shadiness
So, now it’s clear that something shady is going on. GAW leads you to believe that you’re selling something you “own” for a specific price, but then they jack the price up by 5%. They don’t want you to know they are doing this – and they certainly haven’t disclosed this detail anywhere during the process of listing a miner for sale, nor in their terms of service – so they remove your ability to see your own market listings. They’re already taking 5% from the seller, so this is obviously a way to double that profit by charging another 5% to the buyer. This would all be perfectly fine if they were transparent about it.
4 – How to price your GAW Hashlets on the Hash Market
Here’s a little diagram covering the whole process. Basically, take the price you want to list your miner for on the market – the price you want potential buyers to see – and divide it by 1.05. That is the value you need to enter into the “Selling Price” field when you’re ready to list a miner on the hash market.
This is my first post on digital currencies. I’m actually highly involved and interested in this emerging technology, and I believe it has the potential to change the world in ways we haven’t seen since the internet became the ubiquitous instantaneous communication and information sharing network it is today. While I have much to say on the topic, and quite a bit of experience and knowledge in general regarding crypto currencies, I have not yet made time to put my thoughts in writing on the various sub-topics of the industry. Needless to say, expect more from me on bitcoin, altcoins, and digital currency-related topics here in the future.
As for GAW, I’ve been using their services for quite some time, as I described above. However, I hold the opinion that their lack of transparency and endless promises of infinite profits for their customers are massive red flags. Due to what pretty much amounts to dumb luck and good timing, I happen to have profited pretty well from my involvement with GAW’s products and services, and now that this involvement has led to Paycoin being added to my digital currency portfolio, I’ll be watching closely in the coming weeks and months to see how it all turns out.