For someone who frequently discusses the importance of passive income, I have put quite a bit of thought this week into my overall investment strategy. Earlier this week, I blogged about compound interest (which is a great idea) and Rollercoin (which is a slightly-less-good idea unless you love mini-games or don't mind waiting half of a decade to break even).
Now, I'm going to crunch the numbers to show why only one of HashShiny's six cryptocurrency mining offerings is a worthwhile investment.
THE MATHEMATICS OF DISMAY
I'm not saying that HashShiny is terrible. I'm just saying that five of its six offerings aren't profitable.
And HashShiny itself proves it.
One of HashShiny's strengths is that it is feature-rich. I personally appreciate the Re-Invest functionality. One of the features on their mobile app is a hashrate calculator, which takes either dollar amounts or hashrates as input and displays how much the investment will return after one day, one month, one year, and two years.
Unfortuantely, the hashrate calculator shows what a lousy investment HashShiny can be.
Before I show the numbers, I need to mention HashShiny's greatest flaw: its electricity fees. With every payment, HashShiny charges an electricity fee that is both random and large. The electricity fees that I have seen on my transactions are always over half of my payments. There does not seem to be any consistency with the payment and fee amounts, but multiple calculations give me a relatively safe assumption that I get 44% of what HashShiny reports as a payment.
Let's get back to HashShiny's hashrate calculator.
For simplicity, I'll use a starting investment of $100 for all six cryptocurrencies that HashShiny offers. I'll multiply HashShiny's values by 0.44 to apply their electricity fees. I've also factored in HashShiny's frequent coupon codes that apply a 6% discount for purchases.
As of 2021-03-05 9:00am PST, ~$94 invested in HashShiny results in:
- 1,246 GH/s for BTC
- $0.31/day -> $0.1364/day
- $9.41/month -> $4.1404/month
- $112.94/year -> $49.6936/year
- $225.88/2 years -> $99.3872/2 years
- 6,667 KH/s for ETH
- $0.26/day -> $0.1144/day
- $7.67/month -> $3.3748/month
- $91.99/year -> $40.4756/year
- $183.99/2 years -> $80.9556/2 years
- 5,500 sol/s for ZEC
- $0.24/day -> $0.1056/day
- $7.10/month -> $3.124/month
- $85.19/year -> $37.4836/year
- $170.37/2 years -> $74.9628/2 years
- 815 GH/s for DCR
- $0.44/day -> $0.1936/day
- $13.09/month -> $5.7596/month
- $157.11/year -> $69.1284/year
- $314.21/2 years -> $138.2524/2 years
- 13750 MH/s for DASH
- $0.32/day -> $0.1408/day
- $9.56/month -> $4.2064/month
- $114.68/year -> $50.4592/year
- $229.36/2 years -> $100.9184/2 years
- 88 MH/s for LTC
- $0.33/day -> $0.1452/day
- $9.88/month -> $4.3472/month
- $118.56/year -> $52.1664/year
- $237.13/2 years -> $104.3372/2 years
Buying ETH and ZEC hashpower will lose money for customers. BTC, DASH, and LTC return lackluster returns for a two-year commitment.
However, DCR looks promising.
RED DECRED REDEMPTION
Turning $94 into $138.25 is approximately a 47% ROI. Assuming that DCR doesn't become a trash token, using HashShiny to mine for DCR seems like a good long-game investment.
What happens when we apply automatic reinvestments?
When a HashShiny customer opts in for automatic reinvestments, HashShiny makes an automatic hashpower purchase when a mined coin's balance reaches or exceeds $1.
(Note that the following calculations are purposefully rounded down; I'd rather lowball than exaggerate.)
A 815 GH/s, 2-year DCR mining contract currently generates about $0.19/day after electricity fees. In six days, auto-reinvest will kick in, buying a 9 GH/s, 2-year DCR mining contract. This would raise the calculations to:
- $0.44/day -> $0.1936/day
- $13.29/month -> $5.8476/month
- $159.50/year -> $70.18/year
- $319.01/2 years -> $140.3644/2 year
Six days after that, 833 GH/s would yield:
- $0.45/day -> $0.198/day
- $13.47/month -> $5.9268/month
- $161.59/year -> $71.0996/year
- $323.19/2 years -> $142.2036/2 year
And six days after that, with 842 GH/s...
- $0.45/day -> $0.198/day
- $13.58/month -> $5.9752/month
- $162.92/year -> $71.6848/year
- $325.84/2 years -> $143.3696/2 year
When the post-fee daily amount reaches $0.20/day, auto-reinvestments will happen every five days.
When the post-fee daily amount reaches $0.40/day, auto-reinvestments will happen every four days.
Buying DCR hashpower and letting it sit for two years may lead to a 47% profit. However, letting it build could lead to far more for investors willing to gamble on DCR's value.
I did some quick calculations on the other five cryptocurrencies that HashShiny offers. DASH and LTC offer break-even-esque rates for their auto-reinvestments, and the other three currencies lose money with auto-reinvestments. (A $1 auto-reinvestment in BTC yields roughly $0.94 two years later after electricity fees.)
I've already shut off auto-reinvestments for my BTC and ETH mining operations. As for DCR, I'm more inclined to give it a higher investment priority. I'll continually monitor the mining operations with the hashrate calculator; if it starts to perform worse than my other investments, I'll adjust accordingly.
For the time being, I'll stick with HashShiny as long as their DRC investments are worthwhile. However, I'll refrain from linking to it since I have serious qualms about promoting a company that eats 56% of its customers' returns.