- Crypto Dividends Portfolio Analysis — Envion
Recently I started a series chronicling my journey to try and make a passive income in dividends from cryptocurrencies.
I currently have a portfolio of nine cryptocurrency investments that pay — or will pay — dividends.
I will now be taking a look at each of these cryptocurrencies in turn and explaining what each of them is about and why I have chosen to take a position in them.
First up we have Envion and this is a new cryptocurrency mining project that will place mining units directly at the source of renewable energy plants.
These mobile mining units will be placed in shipping containers and be located in various places around the world that have the lowest energy costs.
By placing them directly next to renewable energy projects such as solar and wind farms, Envion will benefit from very low electricity prices, as many of these projects produce excess energy that is either lost or exported to the grid at a marginal rate. Now however Envion can use that excess electricity for mining, which is a benefit both for them and the operator of the renewable energy plant.
Envion recently completed its ICO and raised the equivalent of $100m, making it the sixth largest ICO of all time by funds raised.
It has an impressive team behind it and the White Paper was very thorough in terms of the plans it set out.
On the website they were projecting returns of over 160% per year on investments made in the ICO.
At the same time they are planning to reinvest 25% of the proceeds of mining back into new mining units on an ongoing basis, thus potentially increasing the mining revenue over time.
All of that sounds very promising if they can deliver on those targets.
Since the ICO though I have had some concerns over the project.
Firstly, the crash in cryptocurrency markets means the amount raised is quite a bit less than $100m, as most of the funds raised were in Ethereum and Bitcoin.
This means they won’t be able to build as many mobile mining units as when Bitcoin was close to $20,000 and Ethereum was $1400, unless the prices get back to those levels.
However, the problem is that if they wait for prices to return to those levels, it will delay the start of mining and of course prices may not return to those levels, or could even fall further from their current levels.
Secondly, and perhaps more importantly, there have been significant increases in the difficulty of mining over the last couple of months, which combined with the drop in the crypto market, means mining is a much less profitable activity now than when Envion launched their ICO back in December.
The rise in difficulty is indicative of more players entering the mining market and it appears this trend is not due to change any time soon. There are too many new competitors to list here, but suffice to say there are a raft of new players entering the market, both massive outfits and small niche businesses, all wanting a piece of crypto-mining pie.
Even contracts with sites like Genesis Mining and Hashflare, which were wildly profitable just a few months ago are now no longer profitable at all.
What will happen to the difficulty —as well as the crypto markets in general — in the coming months and years remains to be seen. But it means the returns on mining are now much more uncertain.
Thirdly the communication from Envion since the ICO ended has been somewhat disappointing, with no details released of their progress or their plans going forward.
So given these concerns, I have trimmed my position in Envion to 10,000 tokens from the 15,000 I purchased during the ICO and have spread my funds a little more widely into non-mining projects.
Hopefully Envion will still be profitable and do well, but it will be a few months before we find out, as they are estimating it will be July before they have all of their estimated 600 mobile mining units up and running.
In the meantime I am hoping some of my other cryptocurrencies will start paying out some decent dividends to pick up the slack.
So anyway that is Envion, but I will be back soon with the lowdown on the next coin in my portfolio.
N.B. I am not a financial advisor and the above article and those in this series should not be taken as financial advice. I am simply recording my own experience in cryptocurrency for educational and entertainment purposes. If you intend to invest in cryptocurrency, please do your own research and take professional financial advice. All cryptocurrencies carry risk and your entire capital could be lost.
- Date of publication:
- Wed, 02/14/2018 - 15:36
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