As you’ll know from my other recent posts, I’ve invested some money with GAW Miners and their Hashlets for cloud mining altcoins. These pay out about 0.9% (just under 1%) per day, so they look to be a good place for long-term investment. They also have a thriving community and it’s there that I first learned of LTCGear, the subject of this review.
Litecoin Gear (LTCGear) have been around for well over a year, a pretty long time where Bitcoin/cryptocurrency companies are concerned. Initially the owner sold FPGA (Field-Programmable Gate Array) scrypt mining hardware to customers. But since June 2014 he has, instead, sold shares in his mining farm.
He designs and builds his own equipment, so he is not buying mining hardware from other firms such as Bitmain, Butterfly Labs, etc. He comes from a chip design background, so obviously knows what he’s doing. He is ploughing his own furrow in the altcoin mining world. He is only known as “Chris” but also as “beekeeper” on the Bitcoin forums.
So What Do You Buy?
You buy shares in his Litecoin mining farm. He primarily mines LiteCoin (LTC) and FeatherCoin (FTC) but with additional mods you can buy, also mines DarkCoin (DRK) and VertCoin (VTC). He does not build Bitcoin mining hardware so doesn’t mine it directly. He may also mine other Scrypt-N, X11, X13 and X15 based coins (whichever is the most profitable). Cloud mining companies never reveal what their mining strategies are – they are essentially trade secrets.
Payouts can be in LiteCoin, Fethercoin or Bitcoin (you pick) or in VertCoin or DarkCoin if you have the mods to mine those.
I have only bought the basic shares and none of the mods, so I can’t provide an opinion on how they perform though anecdotal evidence from mod owners suggest that they can significantly boost payouts, at least in the short term.
The fly in the ointment is that VertCoin will be changing their coin’s algorithm in late November to make it more resistant to the new Scrypt-N ASIC mining hardware, so Chris has said he doesn’t know if his setup will be able to continue mining VTC past that date.
- Payouts happen regularly every week, on a Friday.
- If you buy a share package part way through the week, you get paid for a full week, so buy on a Thursday and you get paid for that full week rather than just for one day.
- Payouts are good, being (currently) 0.01955602 LTC per week per share. That equates to 31.29 LTC per week for a 1K6X share pack. That’s roughly 0.32 BTC per week (LTC/BTC exchange rates will cause the BTC equivalent to vary from week to week).
- Payouts will decrease as time goes by due to the increasing network difficulty in all altcoins (Bitcoin suffers from this too). To counteract this, every 6 weeks there’s a share multiplication. Your existing number of shares is increased by a factor of about 1.3 (again it varies depending on different factors), so a 1,600 share pack would be boosted to 2,080 shares. Just to clarify, this doesn’t mean that you’ll start seeing bigger payouts after 6 weeks; the multiplication is designed to keep your payouts from decreasing rapidly over time.
- A new payout option has just been introduced which allows you to reinvest your weekly payout into buying more shares. This is the easiest way to buy additional shares.
- This is a completely hands-off investment opportunity. You pay for shares and then collect payouts every week. It’s that simple.
- Payouts are paid directly to your coin wallet. So there’s no danger of losing those payouts if Litecoin Gear should go out of business. Other mining companies store your payouts in local wallets that you have to initiate withdrawals from and if one of these companies goes bust and you still have funds stored with them, you’ll lose those funds. LTCGear’s direct payouts to you wallet protect you from that.
- If you pay for share packs with Bitcoin (rather than with altcoins), you get an 8% discount.
- The minimum number of shares you can buy is 830 (the ASIC Share 830x) though these are seldom in stock. The other available package is for 1,600 shares (the ASIC Share 1K6X Anniversary). It’s not always in stock, so you may need to reload the sales page a few times during the day to catch them when they do come into stock (they sell out fast).
- The share packages are not cheap, so if you don’t have a thousand dollars or several hundred euro to spend (and that you can afford to lose), then this venture is not for you. The 830x pack is $1,005 (approx. 2.65 BTC) and the 1K6X pack is $1,805 (approx. 4.75 BTC).
- If you want payouts directly in Bitcoin, then the altcoins mined are converted to Bitcoin at the exchange rate at the time of payout. This can work in your favour or against it, depending on the LTC/BTC exchange rate. You could get payouts in LTC and hold on to them till they rise in price and sell them on an exchange for a higher profit.
- Payment options are limited. While there is a PayPal badge on the site, LTCGear does not take PayPal payments. Nor is there an option to pay by credit card. You can only buy shares (and mods) with Bitcoin or altcoins. If you don’t have enough (or any) of these already, then you’ll need to buy some first.
- Payouts will decrease over time; this will happen with all mining companies. The increasing difficulty is the prime cause of this though changing exchange rates also play a role. The share packs have a 1 year lifetime and, since they’ve only been available for 5 months, it’s hard to predict what return they’ll give in another 7 months. That’s why some level of reinvestment is necessary to slow down the rate at which payouts will decrease.
- The website is basic so don’t expect bells and whistles there. It may not inspire confidence as it doesn’t include slick marketing spiel or language designed to get you to spend your money. You get the basic information you need to make a decision about whether to buy or not. Sales are mostly by word-of-mouth rather than by people happening across the site.
Altcoin mining is a risky business. While Litecoin Gear has consistently paid out on time each and every week, it’s best to assume that past performance is no guarantee of future results. If you want more information, check out the LTCGear FAQ.
My LTCGear Experience
I’ve only bought the 1K6X share pack and none of the mods (so I can’t comment on them). I bought on October 1st and have had three payouts so far (Oct 1st, 10th and 17th). I got paid on the 1st because I managed to pick up the pack before the payouts for that week ran.
So 19 days into my LTCGear investment, I’ve received 1.02028903 Bitcoins (at today’s exchange rate, that’s worth $393/€313). At this rate, I’ll have recouped my initial investment in 14 weeks.
In fact, I was able to get a half-price deal on the shares I bought, plus the 8% discount for buying with Bitcoin, so I only paid 2.2 BTC (approx $850) for 1,600 shares.
Since I got the discount on the shares, that means it will only take 7-8 weeks to recoup my investment. After that, any money paid out will be pure profit. I do have a reinvestment strategy I’ll be following to reduce the drop-off in payouts over time.
Buying Bitcoins To Purchase With
Buying Bitcoins isn’t too easy if you’re outside the USA (and maybe Canada).
In Europe, only Bittylicious will take credit card payments though you have to provide a ton of verification documents before they’ll take that form of payment.
Otherwise, you have to use SEPA (inter-bank wire transfers) to pay. Banks being what they are, will only do same-day transfers between different branches of the same bank. Otherwise, you’ll have to wait a business day or more for a transfer to go through (the banks collect the interest on your money while it’s sitting in limbo in the meantime).
Depending on who you’re buying Bitcoins from, you may get them at the rate they were on the day you sent the transfer or on the day the money is received by your supplier. And, since Bitcoin can significantly fluctuate in value over a couple of days, you could end up with less than you intended to order. So it’s a good idea to order a bit more than you think you’ll need.
I used Eircoin (Irish Bitcoin broker) to buy my coins as it turned out to be the easiest solution and no messing with having to send in proof of identity and all that. The EUR/BTC exchange rate is also much better (including the fees). Fees are 4.99%, so high in comparison to fiat currency exchange commissions, but still lower than some other online brokers charge. It takes 1 business day for a transfer to go through if you do not have an Allied Irish Bank account.
Lesson: Don’t initiate a transfer on a Friday. It won’t go through till the following Monday and Bitcoin’s value can change a lot in 3 days!
If you look at the numbers on this, it looks too good to be true. That was my initial reaction and I held off for about a month before committing funds to it. Other forum members had jumped aboard in June when the shares first became available and have received 4x their initial investment. No one quite knows how Chris is doing it. Could it be a ponzi scheme? Possibly, but Chris has a solid track record as a chip designer and hardware manufacturer. He may just have hit on a winning formula that’s profitable for both him and his customers.
Like I said above, this is a risky venture. If you’re risk averse or don’t have funds you can afford to lose, then don’t get involved. It’s not for you. However, from where I stand, it does look like a great opportunity to earn some Bitcoin (and convert to USD or EUR as and when needed). I’ve already recouped about 40% of my investment (including various fees) after 3 weeks, so even if LTCGear went out of business tomorrow, it wouldn’t be a total loss – a loss yes, but not a total one.
Each month using my reinvestment strategy, I expect to get, on average $500-520 (about €400). That amount will decrease over time but, very conservatively, I expect to at least get double what I initially paid. It’s risky, yes, but where else can you hope to double your money in so short a period of time?
So, for me, LTCGear looks to be a winner. Stay tuned over the coming months to see if this pans out as I hope of if it all comes to a sticky end!
Tagged with: Bitcoin • Bitcoin mining • buying Bitcoins • DarkCoin • FeatherCoin • fiat currency • GAW Miners • Litecoin • litecoin mining • LTCGear • mining altcoins • mining Bitcoin • network difficulty • Scrypt-N • VertCoin • X11 • X13 • X15
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