In their recent update, the Sia team has announced that they will be shipping their first official ASIC the first two weeks of July. This is for batch 1; batch 2 will be shipped a couple of weeks later.
Sia Coin is used by Sia Tech, a decentralized P2P storage network. The latest is the most appealing for people who appreciate privacy and data safety. The mined coins can be either used in the network or sold in exchangers for cash/other cryptos.
What to Expect from the Obelisk SC1
Most of you know what happened to Sia ASIC mining – the delay of Obelisk and the introduction of the Antminer A3 that took everyone by surprise. Most people don’t know what to expect from the Obelisk – there is a lot of negativity and bias on the forums, which is why I would like to talk about this topic here.
Let’s start by briefly reviewing everything we know so far – this will be the most interesting for those of you who have not been paying too much attention to Sia ASIC back when this all happened.
A Brief History of SIA ASIC Mining (Skip if you already familiar with it)
Sia coin originally could be mined by renting your free HDD space to the decentralized network. GPU mining was possible too, though it has never been too profitable.
Then, a year ago, the team behind Sia Tech has announced the pre sale of the first ASIC for Sia coin – the Obelisk SC1.
Back in the day, the miner only existed in blueprints. There were only estimates on its hashrate, power consumption and shipping date. That being said, anyone willing to get that miner had to preorder it, pay $ 2500 USD in advance and then wait about a year while the developers hire more people, create the first prototypes and basically take the ASIC from a blueprint all the way to mass production.
Several hundreds people have decided to take the risk and support the creation of the first Sia Coin ASIC. This is understandable because the reward was quite high too – it’s very profitable to be among the first people who own the first ASICs in a network.
It all made sense until January of this year when Bitmain has announced their first Blake(2b) ASIC (the algorithm behind Sia Coin). The Antminer A3 is more efficient than the Obelisk and the units were shipped to customers in a span of 10 days! No need to wait a year to get the miner.
The first people who have got their Antminers A3 were enjoying about $400 USD profit per day (in Sia currency, of course).
Basically, people who have purchased the Antminer A3 have reaped everything the people who have preordered the Obelisk were aiming for. Now that the network hashrate is high, the Antminer A3 is no longer profitable since it mines $ 80 USD worth SIA every month and consumes $ 128 USD in electricity. Will Obelisk miners be profitable once they reach their owners? I doubt it!
What happened raises a lot of questions and I will be focusing on two that I believe are the most relevant.
Question #1: Can Sia Tech be Trusted?
There is something that makes people doubt whether Sia Tech is a trustworthy company. In the past months, Sia has been labeled as a company with lack of professionalism or even as scammers. The reason is simple.
During the pre-order week, Sia advertised the Obelisk SC1 to hash about 800 GH/s or more. Then, in January, Sia posts an update and says that the SC1 will be hashing about 550 GH/s, which was about 40% less than what the Antminer A3 was delivering.
Later in May, Sia Tech has clarified that the 550 GH/s mark is the lowest mark and that in reality, the Obelisk should be able to hash way higher. Every board of the miner has 30 chips, each of which is clocked at ~300 MHz. They have added that
our team has reported that they are seeing performance variances from 350 MHz to 600 MHz per chip
. This means that, depending on the variance of our production chips, there is a good chance that we will be able to meet or exceed our unit hashrate targetsSia Tech
Basically, by overclocking the chips, they might get way better performance. That’s something we do to our GPUs and I’ve seen people overclocking certain ASICs too. In addition to that, the author of the official update claims that their chips work even faster when heated to 85-100 C, which coincidentally is the normal operational temperature of the device.
So to answer the question – can we trust Sia Tech when future ASICs will be released? If they manage to get the SC1 to hash as announced during the pre-sale, I’d say that there is no reason to not trust those guys. After all, people were aware of the risks by preordering an ASIC that would take one year to be designed, manufactured and shipped.
Now, what if Sia’s intentions were good and they deliver as promised, though despite that, the end result was disastrous for their customers? In other words…
Question #2: Is it the Obelisk SC1 Outdated?
This topic might be interesting for those of you who have preordered your Obelisks, as well as for those of you who have Antminers A3 ASICs. Our takeaway from this will also affect our final conclusion: did Sia Tech screw their customers over?
Simply put, if we plan on immediately selling any coins we mine then yes, the Obelisk SC1 is definitely a piece of expensive junk.
On the other hand, if you mine to hold (“hodl”) then you might want to think twice before posting your SC1 on ebay once you receive it.
The cloud storage market is anticipated to hit the $88 billion mark in 2020. If Sia Tech manages to capture a fraction of that market, the price of the coin will explode. To put things into perspective, as for today, the amount of generated Sia tokens is around $18 million per year. A quarter of a percent of that market share would make the coin price skyrocket.
This is a quick ROI calculation based on price history with current reward/dificulty at 800 Gh/z mining hashrate
Results looks pretty good to me 🙂
Another factor that should positively affect the coin price is that block reward size is decreasing. It is estimated that block reward should go from 140000 SC per block down to ~ 30000 SC per block by mid 2020.
Can mining and holding Sia coin be a good idea? Probably, yes. A risky one too, though risk and cryptocurrencies are close related anyway.
While what happened is bad news for those users who want to mine and immediately sell their coins, the situation might not be as grim for those of you who are mining to hold.
For some reason I believe that people will be getting their Obelisks in time in some weeks. Yeah, the device is definitely not going to make you any money in the short run, though it might pay off in a year or two. In fact, it might bring you way more profit than we can imagine now.
Once again, we are talking about a risk that Obelisk owners can decide to take – to spend money on electricity bills and hoard Sia coins or try to resell their units to those who are willing to take risks. What is your take on this? Have you preordered the Obelisk SC1 back in 2017?
Thank you for reading. As always, your comments, suggestions and questions are welcome.
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