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Shebin John

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ICO Analysis: Electrominer 30 Oct 2018

ICO Analysis: Electrominer

Today we are going to look into Electrominer. One of my friend Guilherme Mück asked this review.

Idea

“ Electrominer is a self-powered Mining Platform where users rent hashing capacity to mine various coins on various algorithms. Electrominer was created to address the challenges of mining PoW based cryptocurrencies. We have our own data centers equipped with ASIC and GPU miners to mine profitably and effectively, our own solar power station to efficiently power our equipment, and Electrominer platform’s mining capacity will be available for anybody to rent and utilize for mining through the web portal.”

A great idea indeed. The main problem of mining includes heating, electricity usage, etc. And they are trying to get one of the problems solved to make it sustainable through Solar Power.

MVP

There is currently no MVP provided on the website. Though they offer an APK, which I don’t feel secure to run.

Team & their experiences

Image: https://cdn-images-1.medium.com/max/1000/1*rLPtni1nZ9blLtMSLzJvXw.png
Source: Website

Some of the team members indeed look experienced through their Social Media.

But

Some of the team members look a bit inexperienced.

Flags

1. What about old ASIC’s and Mining Devices?

Though Electrominer can reduce the cost of mining by introducing Solar Panels. That is not going to change the fact that, if a new ASIC is created (which is not new, considering a new launch of the device every few months), the old ones are kind of obsolete.
Though GPU’s can be reused, the profitability can be marginal. Thus, even though they save money on one part, they can (not a must)lose on the other one.

2. Problem #1 Electricity, Solved! Problem #2 Heat?

Image: https://cdn-images-1.medium.com/max/800/0*CA9B9XZXjOpdaldj.png
Source: 

While they are using Solar Power for electricity, another problem for mining farms is the heat produced. And as they are going to work on Southern California, the heat problem remains.

3. The increase of Hashing Power will increase Profit! How will this increase happen?

They say at many places that the increase of hashing power will increase the profit. But have not specified how they will increase the hashing power.

  • Will they buy new devices selling 24% of the token held by the company?
  • Will they buy new devices from the profit earned from the 24% of the hashing power the company owns?
  • Or there is any other way?

And in any of the above cases, what happens to ASICs? As they become obsolete and give negative returns? ASICs are specific to a particular token, making it useless with time.

4. Price of solar photovoltaic module prices in the U.S. increases.

Image: https://cdn-images-1.medium.com/max/800/1*X-nVyyP-0C3B2rDJ381-oQ.png
Source: Statista
Though the price of Solar Photovoltaic module had a decrease in Q1 of 2017, it has increased from that since then, to have just a slight decline in Q1 of 2018.

5. Location and the problems along with it.

Quoted according to their own Whitepaper:

«Although the theoretical total power capacity is considerable, the developable potential is significantly smaller due to proximity to transmission lines, land access, financing, and utility demand, among other factors.»

And…

«While this capacity may be hypothetically possible, concentrated solar power development is also constrained by numerous factors such as its high level of economic competition and potential impact on avian mortality. Capacity for CSP technologies vary widely, with a range between 25% and 49%»

6. Mobility vs Expense

Though at first, I liked the idea of Mobile Data Centers, later on, the different problem popped up!

  • Container > Metal > Sunny Day + Mining Heat > More Energy Utilized on Cooling
  • Individual Cooling Unit for each Container
  • Individual “ digital, multi-level access control” for each Container

So, though they bring up mobility as an advantage, it brings up the above disadvantages.

7. Cloud Mining Platform, where?

Though they talk a lot about their web portal (Cloud Mining Platform), there is no MVP or beta version out there right now. Except for some screenshots, which according to them, quoted:

«All pictures shown are for illustrative purposes only. The Electrominer Cloud Mining Platform is still under development, and the figures displayed in such example images do not represent exact numbers or prices. The website’s design and range of tools are subject to change.»

8. Purchase Membership Status

Whitepaper Quoted:

«To start placing mining orders, you will be required to purchase an annual Electrominer Membership subscription set at the rate of 1% of the total amount of ELM held by all members.»

Considering if they are successful in selling 70% of the total ELM, then to place a mining order, one has to spend around 700,000 ELM, which according to their Price per Token: $0.7142 amounts to approximately $500K

Again quoting them:

«Cloud mining services commonly provide long-term mining contracts for an average of 24 months. The high level of unpredictability the cryptocurrency market is known to make a two-year contract very unappealing for miners for many reasons»

I think a two-year contract was unattractive; they changed the contract word to subscription and two years to one year.

Great business model indeed!

9. Liquidation of Company ELM in five years

Whitepaper Quoted:

«Electrominer management team does not intend to liquidate any cryptocurrency generated during the first five years from Mining and Membership revenue. It emphasises Electrominer’s business model and a commitment to the long-term success of the Electrominer brand.»

Can the company emphasise the same through a smart contract rather than just mere words?

10. Electrominer is an existing mining company. Any proofs about that?

Whitepaper Quoted:

«Electrominer is an existing mining company which already shares 22% of the total mining capacity among Cloud Miners.»

Can the company provide any proof of the hash rate?

11. August 15, 2018 — Land Purchase. Any Proof of the same?

Can the company show any proof of the Purchase of the land?

Verdict

Until the above Flags can be answered clearly by the team, I would like any investors to be cautious about these things.

Please, let me know if you want to see more parameters to be added to my analysis or want to give me some tips or want to correct me on my findings or even want to share some secret regarding the companies I would be writing in time.

The above was just an analysis for those who don’t want to spend their time on facts about this project. But please don’t consider this as investment advice.

The above article was not paid for. And the respective company didn’t know about the same.

For the readers:

Thank You for reading till now and hope you like what I wrote.

For the respective company:

If you see anything written above is not true, please let me know about the same through comments, or you can contact me through Telegram.

 

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