Analysis of Giga-Watt Token - Crush Crypto

Analysis of Giga-Watt Token

Summary

  • Project Name: Giga Watt
  • Token ticker: WTT
  • Website: https://giga-watt.com/
  • Whitepaper: https://cryptonomos.com/wtt/white-paper.pdf
  • Hard cap: $30 million
  • Soft Cap: No soft cap
  • ​Number of tokens issued to investors: 30 million
  • ​Total supply of tokens: 34.5 million
  • ​Maximum market cap at ICO: $34.5 million
  • ​Bonus structure: $1 / token in week 1-2, $1.05 / token in week 3-4, $1.1 / token in week 5-6, $1.15 / token in week 7-8, $1.2 / token in week 9
  • Timeline: ​June 2 to July 31, 2017

Project Overview

Giga Watt, a cryptocurrency mining company, is issuing tokens which represent mining equipment power consumption. Each token costs $1 and represents 1 Watt’s worth of mining equipment power consumption.

Tokens can be either rented out or used by the token holder if he wants to mine coins himself. Token holders make a return on their investments by collecting income from renting the token out or having the tokens appreciate in value and bring down the yield.

The construction will be completed in phases starting from July 2017. The earlier token holders contribute, the earlier they can start utilizing their tokens.

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Team

- Dave Carlson, CEO
   - 4 years as CEO and founder of MegaBigPower, one of the largest single-operator mining facilities in the world

- Kyle Sidles, CTO
  - Built and launched over 200 various software projects in USA, India, and China. Builds and runs large-scale Blockchain data centers since 2013.


Opportunities

- Annual yield of at least 36% if the tokens are rented out

- Savings can be even greater than 36% of token value per year if the tokens are being used for mining coins

- Company is legit – one of the biggest mining company in North America. Founder has been around the mining game for 4 years

- Company is transparent – it hosts open tour twice a month which allow the public to visit the facilities at WA, USA. This is done presumably because there were instances of cryptocurrency mining scams in the past.


Concerns

- The general trend is moving away from Proof-of-Work – once Proof-of-Stake can be proven that it is scalable, all the coins should move towards Proof-of-Stake which render Proof-of-Work and mining obsolete

- Even though mining is profitable now, mining difficulty is going to increase dramatically in the near future

- Asked the company on slack channel about the % of facility being rented out right now – only 23%
  - If the demand is as high as they say, how come only 23% of the facility is rented out?

- Obtained opinions about Giga Watt’s services from several cryptocurrency miners – Giga Watt’s pricing is average to high. It sells miners at above retail price.

- Don't really understand the rationale of having this ICO and issuing tokens. If the mining operations is as profitable as it shows on their website, then it is better off for Giga Watt to just renting the facilities out for mining operations.

- Unlike most of the other ICOs, the tokens are not going to be used to facilitate anything (creating a network, a community, used as a virtual currency, etc.). I really don't see a need to issue blockchain tokens.


Conclusion

I don’t like the ICO because there are several risks that are too great to ignore: 1) the risk of not being able to rent out the tokens, 2) the risk that Proof-of-Stake will replace Proof-of-Work, which makes Proof-of-Work obsolete.

Also, the ICO lasts for nine weeks which is longer than most ICOs. If the hard cap is not reached, then your contributions will be locked up during the entire period. Opportunity cost can be high given that cryptocurrency prices fluctuate so much recently.

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