The truth about Crypto hardware miners…
Ever since the beginning of blockchain and crypto people were able to collect them using miners. With bitcoin launching in 2009 the era of using machines and hardware to produce said cryptocurrency had started, and many other blockchains and cryptocurrencies would follow bitcoins footprints. A whole plethora of blockchains has evolved in the past 13 years, all using a slightly different way to mine their respective coins.
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First, we only saw minor changes from bitcoins original SHA256 algorithm. New chains tried different mining algorithms that offer some advantages like anonymity (randomx, Monero) or a different design for the same concept (scrypt, Litecoin), but as the Crypto market slowly got flooded with more and more of the same, new innovations had to be made to stay appealing to the hungry investors.
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[insert random application here]
Thats how we ended up with applications that use the blockchain because it is “open” and “decentralised”, where they inevitably don't need it.
Look at WeatherXM, for example, who took an already existing, completely functioning concept that had no need to be decentralised or open (because weather data is already open…) to the blockchain. They are trying to sell the idea that everyone should have a portable weather station in their garden for the sole purpose of “selling weather data and being good for the environment”.
The problem is that weather data already is open, and the stations collecting that data are a lot more advanced than their offered portable weather stations. So then, what is the purpose of blockchains gathering data or offering services using their “mining hardware”?
A surprise…
Money. The world doesn't need to have portable weather stations collecting weather data in every single person’s backyard. The ones out there are already sufficient enough and provide us with enough data and accurate predictions, so why the need for a blockchain?
In the end, they just want to sell you their “WeatherXM crypto token”, and for the people really deep in the crypto rabbit hole you can even sell them your “weather station”! No value is created with the collection and open-sourcing data already available, so their only purpose is to make you believe in their vision so they can profit off of you.
Take a look at the Helium network for example. They took an existing concept (eg. LaRaWan) to the blockchain. I will be honest, it is a cool concept. I even used the Helium technology in our business development company, until we figured out that the technology was too unreliable to do anything remotely the same as with professional set-up LoRaWan networks.
But I digress; To participate and mine Helium (HNT) you need a “Helium compatible router”, so to speak. This device is basically a raspberry-Pi with a LoRaWan shield attached to it. Hardware that would cost ~100$ with off-the-shelve components. So then, what is the catch? The fact that you can ONLY mine helium with one of their partner-approved machines! Yes, you can create your own LoRaWan device and add it to the helium network, but no way that Helium will let you mine HNT with your own device! That would be too open and decentralised, and bad for the profitability of their business…
It is smart, I am not going to lie, but this is how Helium created an artificial market for their own Helium miners. With units selling for around 600$ new, and 1500$ second hand they sold 100’s thousand of raspberry-Pi clones to unsuspecting buyers. The promise was that you would pay 600$ but was able to do an ROI of 3 months by mining 10HNT worth around 50$ at the time. That's how they caught many investors, including me.
The truth
A lot of people bought their HNT miners in the hype of the bull market. The promise to make a short-term profit by running an HNT miner was appealing. However, the note that the delivery would happen only 6 months after the purchase was nowhere to be found! And, with the bear market setting in and the price of HNT going from 55$ to $1,81 (a decline of ~97%) the promise of a 3-month ROI is looking like a fairy-tale.
The current situation is as follows: I paid almost ~600$ for the Helium miner. I mined for half a year and have mined a nice ~8 HNT, with a current value of ~15$. My ROI will be about 20 years! If I tried to sell the HNT miner now I’d only get ~150$ for it.
In the end…
I am in too deep. Selling the miner or HNT will not get me anywhere. But I did learn one thing; (1) don't let the hype get to you, and (2) don't invest in miners of some random blockchain. There's a high chance the token price will plummet, and in the end, you are just paying for the unsustainable business practices of the next crypto startup. There will certainly be people who make money with these miners, but it will be highly likely that you are too late for the hype train and that you will be the one paying for their profit. Stay safe out there. Amen.
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