What are Hashlets?
We kind of presume that you already know this and that’s why you’re here. In any event, a Hashlet is a virtual mining product that you own for life. (It’s kind of in a grey area between a product and service; there’s a good case to be made for either.) It allows you to mine for Bitcoins virtually without any need to manage hardware and its associated upkeep costs. Typically, it’s sold in units called Hashlets (GAWMiner’s marketing term).
What are the advantages of using a Hashlet vs buying my own hardware?
Buying your own hardware has significant investment risks, especially in the case of Bitcoin mining. The economics of scale in order to achieve proper ROI require you to buy thousands of dollars worth of hardware, service that hardware, and pay for the power required to run your setup.
With Hashlets, GAWMiner has basically done that large investment cost and is leveraging that economy of scale by letting you buy into a small fraction of the company’s setup. For example, a Radeon 280X roughly runs $200 and has a hashrate of 650-700 KH/s. A single ZenHashlet costs ~$15.00 and has a hashrate of 1 MH/s.
What are the disadvantages of using a Hashlet vs using DIY hardware?
Because you’re using a virtual product GAWMiner is footing the bill for electricity. As the company gives you Bitcoin payouts every day, they can’t really disassociate the real-time costs of electricity. This means they need to charge a daily maintenance fee with every payout. Currently, it’s set to $0.08 USD for Script Miners per 1MH/s and $0.01 USD for SHA Miners per 5 GH/s.
This means payouts are kind of at the mercy of the current Bitcoin exchange rate. (GAWMiners uses Coinbase’s exchange for USD at the time of payout).
Does this mean there’s a chance I can lose money when I buying a Hashlet? Can I end up owing GAWMiners if the exchange rate goes too low?
That’s a very legitimate concern. Yes and no. You can lose money in the sense that you never break even; not make back enough to cover the amount you originally spend on the Hashlets. However, you can’t actually go into the red and end up owning GAW.
In the case where, payouts < maintenance fees, the payout system triggers a safeguard. This safeguard automatically sets your payout to equal the maintenance fee for that miner on that date. This leaves you with no gain but also no loss. Recently, the new safeguard as of 11/1 makes payout = maintenance fees + 0.01 µBTC. This technically leaves you ahead, but the value is so small that it’s a negligible number.