1.ICO Overview
The landscape in which HomeMine are playing is the ‘passive mining’ space.
Passive Mining can take the form of anything from buying & holding coins, trading currencies to make profit on the margins, in-game tasks to earn coins, clicking captchas to earn coins, investing in ICO’s (pump and dump strategies), running a Masternode, staking, lending, airdrops, blogging, etc.
It can also take the form of cloud mining where you rent capacity in server farms you don’t own or your own devices that have a dual function, one being to passively mine whilst you do other stuff on that device.
The device side of passive mining belongs to the IoT (Internet of Things) or M2M (Machine 2 Machine) sector. It would seem the most obvious approach for successful passive mining but due to high costs to manufacture devices, and high prices to acquire these devices, the return on investment didn’t deliver. One example is Qarnot, who came out with a heater that mines in 2018 but it costs $3,600.
However, the sector is now rapidly evolving and recently a Chinese manufacturer (Midea Group) filed a patent that will enable passive mining inside everyday household appliances like air conditioners or coffee makers. If manufacturers decide to cut out the speculators and develop reasonably priced appliances directly, this could see an enormous shift in the mining sector. It would be mining put back into the hands of everyday people.
This is the area HomeMine wants to address with its $42 plug extension lead that passively mines.
2.ICO Proposition
Ticker : MHT
Token Type : Utility
Token Price : $42
ICO Hard Cap : $38.4m
ICO Soft Cap : $5.2m
Total Tokens : 1m
Tokens for sale : 1m
Here’s how it works:
- You buy a HomeMine device online for $42 using their utility token or by investing in their ICO
- HomeMine sends you the device. You receive it and plug it into the mains electric at home.
- Every time you use a home electrical device or appliance, you plug this into your HomeMine device
- The HomeMine device has eight sockets (like an extension lead/cord), so you can have multiple appliances running at the same time
- The HomeMine device is pre-fitted with an ASIC microchip for Cryptomining
- To monitor your mining output, you download the HomeMine app
- The App shows you how many coins you’re earning from your mining in real time
- The App shows you how hot the device is getting in real time
- You can withdraw the HomeMine crypto coins you’ve earned, exchanging them for a fixed price in the 1st year into FIAT money, into your chosen bank account. However, before withdrawing, you must pay HomeMine 1% of the total coins mined.
- You are also not allowed to withdraw more than one day’s worth of mined coins at a time.
So, it’s fairly simple to use. Even an ‘ICO advisor’, sorry, a ‘small child’ could use this!!
Keys things to note:
- You do not pay extra electricity for the mining while your appliances are running on HomeMine.
- HomeMine only works when your appliances are active, so it does not mine when your appliances are switched off or not operating.
Here are the product components HomeMine plan to build:
- HomeMine Mining Device with eight sockets to plug appliances into + WIFI/Bluetooth to send mining usage to the App
- Crypto coin
- Wallet
- Mining Pool
- Mining account management app
- Utility token / to pay for the HomeMine device
3.Feasibility of idea/business model in the current market
Pros
- It’s an entry level device priced ($42) for the mass market
- ROI on the device itself seems quick, like 30 days approx
- Ability to generate enough mining income to cover most of your energy costs if not all of them
- White Paper shows they understand the business model and market
- You can withdraw your mining income into FIAT to your bank account
- The Smart Home market is set for enormous growth
- Their solution allows you the flexibility to choose which appliances you want to mine, at any time, on any given day. Appliances with mining built into them won’t offer this choice. In other words, if you only use your washing machine once a week, what’s the point in having mining built in?
- They are utilizing a stratum protocol which means lower latency and lower overhead transport protocol compared to HTTP (in bitcoin's case)
Cons
- It would have been good to see some of the test results from the current ten configurations they currently have running to give investors confidence
- If the network gets so big, it gets harder to mine enough income to make it pay you can’t switch to mining other coins. You’re stuck in their closed mining pool.
- How does opening a physical shop in Belarus help a product that is clearly designed to be sold online?
- You’re restricted, coin withdrawal wise, to the amount you mined in a day. Does this mean you have to remember to withdraw everyday otherwise you have coins stuck in the system indefinitely?
- There is a question mark around managing the temperature of HomeMine’s device. They are currently testing device parts to ensure it doesn’t overheat, which could be dangerous, but they also state heat monitoring will be in the app. Why is this needed if they spec the hardware correctly?
- They laid out the ROI for different appliances in different countries, but I want to know how their device copes with multiple appliances being plugged into it all running and mining at the same time.
Feasibility of the Business Model
The initial six months from launch for the business model look viable, as you can earn an ROI for buying the device within 30 days. Based on HomeMine’s projections of 1m units working by the end of month 1, the ability to generate enough revenue to almost cover energy costs looks good.
But in the White Paper, HomeMine give the same warning a number of times. They warn that as the network grows, as they sell more devices, add more miners, and the ability to generate the same levels of income will get harder. As someone thinking about investing in their ICO, or acquiring a HomeMine device, that worries me. Just how difficult will it get if they have 100m devices running out there? Will it mean my ability to cover my energy costs went from 87% down to, say, 12%?
I think they need to clarify this issue on their ICO website, for investors. It’s key to the sustainability of their business model.
The other thing troubling me is, you have to pay HomeMine 1% of all coins mined out of your earnings but they don’t clarify if that’s 1% of the total coins you specifically mined or 1% of the total coins mined by everyone? Because if it’s total coins mined by everyone, that could seriously eat into your earned revenue disproportionately.
Again, it needs clarifying by the HomeMine team.
4.ICO Team
OK, here’s where I stumble. Everyone knows I’m tough on ICO teams in my reviews but for good reason. As VC’s will tell you time and again, ideas are common, but it takes a great team to build a unicorn.
When I went looking for this team on Linkedin, I couldn’t find them!
I couldn’t even find their website on Google (NASDAQ:GOOGL).
Their website address is buried in their Twitter page.
It was only when I went to their website and clicked their Team LinkedIn (NYSE:LNKD) icons that I managed to find profiles. Warning: it looks like they threw these professional profiles up overnight. Why? Because no one's endorsed them.
I couldn’t find any record for the company (Sequoia Cryptotechologies) the founder is meant to have previously run for four years. Their Blockchain Engineer doesn’t seem to have ANY Blockchain experience on his Linkedin profile.
They don’t have one single advisor.
So the calibre of this team makes me nervous, more so because I think they are potentially holding a great idea. Their website looked so amateurish, so awful, it made me fearful for their ability to market this product - to shift units.
5.SWOT
Strengths :
I think the idea has a lot of potential, if they can deliver it and market it properly.
They are a mission Startup, and mission Startups have a far greater chance of becoming Unicorns. Customers who love products, sell products.
Weaknesses :
I’m not totally convinced this is the right team to execute this idea. I’m also concerned about the mid- to long-term viability of the business model for miners.
I’m also not sure it’s such a smart idea to get HomeMine pre-installed in manufacturers’ appliances. This limits the miner to using specific appliances when the existing unit HomeMine has specified eight sockets, any appliances, which gives the miner total freedom. So from a business strategy side, I’m not clear on what the upsell is for moving to this pre-installed model.
Opportunities :
I think a smarter B2B strategy would be to get the HomeMine unit pre-installed in business machinery, business technology, that the employee is unaware of as they use that equipment but the company is using to offset their energy bills.
Threats :
I think if someone comes out with a unit that allows more appliances to be connected or sells a bundle of 5 units for the price of 2, whilst also allowing miners to mine any coins they want, i.e., lite coins, this would undermine (pardon the pun) HomeMine’s current proposition.
I also think it’s worth watching what that Chinese manufacturer plans to do. If they can do retail appliances with mining chips pre-installed with no additional retail cost to the consumer, it could be game over for HomeMine.
6.Conclusion
I like this White Paper. It makes a proper attempt at defining a business model (although it would have been nice to see their income stream in amongst that data). It also lays out a competitor landscape. Very few white papers do this.
I really like the concept. In theory it’s a no-brainer. But the outstanding questions around their business model and ability to execute, to market this product, leave me worried.
I almost feel like they are going to ICO too soon. As a potential investor I want them to have finished selecting a mining chip and hardware components before they ask me for money. I want them to have tested this thing so they know it will work without overheating and burning down someone’s home.
I want them to have completed building a prototype.
I want them to have engaged major online retailers like Amazon (NASDAQ:AMZN) about selling this unit. But I recognize they can’t do that without having built and tested a prototype first.
Hence, why I think they are a little early for ICO.
But we are where we are. They are going to ICO now. So am I going to have a punt, absolutely, because if they fail, I’ve only lost $42, if they succeed, I wait a year for a device to arrive that offsets my regular energy costs. That’s got to be worth a gamble.
7.Score 0 – 5
- Idea/Business Model 4
- Scope/Potential 4
- Team/Advisers 1
- Token Economy 4
- Marketing 0
- Community/Communication 0
This article appeared first on Cryptovest
