In early March, Luxembourg-based technology company OnMiners unveiled a line of powerful cryptocurrency mining rigs. The startup revealed in a press release that it has developed a three-rig line of miners, which it claims showcase the highest hashrate currently available in the market.
However, after OnMiners’ announcement was distributed by Business Wire, PRNewswire, and Venturebeat, and covered by a number of technology and blockchain media outlets, including BTCManager, members of the cryptocurrency community started to voice their concerns about this new crypto mining venture potential being a scam.
How Are Things Looking in the Crypto Mining Market?
Things move fast in the cryptocurrency mining industry. At the height of the bitcoin bull run, digital currency mining was one of the most profitable and news-making portions of the cryptocurrency sector.
One of the most notable names in the mining sector, Bitmain, announced it had generated almost $3 billion in profits in 2018. Additionally, reflecting the substantial demand for mining devices a number of firms developed and released different types of devices which are designed to mint new units of digital currencies in a wide array of market conditions. For instance, Electroneum released its low-cost smartphone, which also doubles up as a mining device.
While a number of firms were entering the market due to its perceived profit-making potential, the reality is that the sector faces two main challenges. The first of these is the rising electricity costs. Second, most digital currencies have an inbuilt mechanism through which it becomes increasingly difficult to create new units of the currency. The difficulty adjustment algorithm is also affected by the number of nodes connecting to the network. Thus, the more parties participating as miners, the harder it is to successfully win a new unit of the cryptocurrency.
As a result, firms that produce mining equipment, such as the aforementioned Bitmain and others, continuously refine and release newer versions of their devices in order to keep up with the adjustment algorithm as well as the demands of their customers. For both individuals participating in the mining sector as well as the firms producing the mining machines, it is in their best interest to always have the latest, most powerful and effective mining rig.
OnMiners is a supposed mining equipment manufacturer entering the market and according to data provided by the firm, the devices produced by the company are able to achieve the highest hashrates available in the market. Additionally, OnMiners claims that the rigs also minimize energy consumption as well as heat and noise generation.
OnMiners claims that its devices employ endothermic chip technology, which helps the rigs require less energy to effectively function as well as reduce the heat produced during the process. The three OnMiners mining rigs are called On2U, On4U, and OnTower and users can mine Bitcoin, Litecoin, Ethereum, Monero, Dash, as well as Zcash with the devices.
For ease of use, the units are said to be plug-and-play. The hashrates offered by the products for mining different coins are the highest currently available in the market. To mine bitcoin, the On2U device can reportedly achieve 140 TH/s for Bitcoin mining. The On4U rig showcases 270 TH/s while the OnTower has 1620 TH/s.
Hisao Saito, the supposed CEO of OnMiners, believes their devices are poised to disrupt the market due to their superior features. In a press release, which has been removed by BusinessWire, he claimed:
“With hash-power rates like never before, we are extremely confident that our mining rigs will have a game-changing impact on the market.”
Are OnMiner’s New Mining Machines Too Good to be True?
In short, the answer is ‘yes’. The alleged miners promoted on the OnMiners website, come with unrealistic hashrates combined with a supposed new endothermic chip technology that enables the machines to “absorb heat energy from the surroundings instead of releasing it,” to lower power consumption.
Crypto YouTuber MrSotko was one of the first community members to flag concerns about OnMiners and its suspiciously powerful new mining hardware. In a video posted on March 19, 2019, he said:
“I have come to the conclusion that [OnMiners] is definitely a scam.”
MrSotko went on to point out that the company’s team member images are all stock images and, thus, it is very evident that OnMiners is a scam.
Additionally, a Reddit user, named starlight8888, commented on an article posted by ITWeb, stating:
“This is a scam. They claim their On4U unit does 270 TH/s at 1200 W. That’s equivalent to 225,000 MH/J. To put that into perspective the latest Bitmain Antminer S15 does 28 TH/s at 1600 W which is roughly 17,500 MH/J. In other words, these miracle miners are almost 13 times more efficient than the industry standard. This would be a game changer if it were true.”
He also highlighted that all of the OnMiner’s team’s photos are stock images and that its alleged CEO does not have any social media presence at all, which would suggest that the person does not exist. The images of the miners are also fake and are simply housing with the company logo photoshopped on.
Finally, he concluded that their claim that “their tech produces no waste heat […] is in blatant disregard of the 2nd Law of Thermodynamics.”
At the time of writing this article, the OnMiners website has been taken down, which is a sign that the individuals behind this scam are trying to cover their tracks as quickly as possible and acts as a confirmation that OnMiners cannot possibly be a legitimate venture.
In Crypto, Scams Are Everywhere
The unfortunate reality of the cryptocurrency industry is that there are scams around every corner. From fake cloud mining operations, MLM schemes and ICO exit scams to pump and dump coins, phishing scams, and hard forks only aimed at making a quick buck for its backers.
The OnMiners scam is somewhat new and targeted novice and intermediate miners who would like to get their hands on more efficient mining equipment to get their mining operations back into the green. With slowly moving north again, bitcoin mining could soon become profitable again so the scammers behind OnMiners likely saw this as an opportunity to launch their fraudulent operation.
Members of the cryptocurrency community, especially those who have recently joined, need to stay vigilant and retain a certain dose of skepticism about new crypto projects and ventures to ensure that they do not fall victim to scams.