The Many Other Reasons to Avoid Siaberry

This post is the second half of my two-post series on Siaberry, a seller of hardware and software tools for earning money on the Sia network. Yesterday’s post discussed several vulnerabilities in Siaberry’s web app.

In today’s post, I’m going to highlight Siaberry’s questionable sales tactics and operational practices.

You won’t make a profit with Siaberry

My biggest issue with Siaberry is that they advertise their product as a way to make money when customers clearly won’t.

Anyone familiar with Sia can tell you that Sia hosts barely earn money. If people have spare hardware lying around, maybe they can earn a few dollars per month by hosting with Sia. Siaberry sells brand new hardware with a price tag so high that it’s a near-certainty that their customers won’t make a profit.

Longtime community contributor Starbuckz8 regularly shares details about the revenue he earns as a Sia host. In his most recent update, he earned 11 SC (~$0.23) per day on a 3.7 TB server. Siaberry sells an 8 TB kit for$500. Even under the generous assumption that the 8 TB Siaberry would earn double Starbucks8’s revenue, it would take 3 years just to break even with the hardware investment. The profitability becomes even more dire when you account for electricity costs.

However, Siaberry assures customers that they’ll make a profit if they buy a Siaberry. You can see this clearly in Siaberry’s recent tech talk, which is basically a 20-minute sales pitch from their CEO, Sebuh Honarchian.

Over the course of the video, Sebuh misstates several key facts about Sia or omits relevant details to give the audience the impression that they can cash in by purchasing Siaberry devices.

3:30 - The data usage is pretty rapid. The Siacoin users have been increasing the amount of data that they’re putting onto the network every day. So it’s kind of like going like this [mimes a steep curve]… the amount of data usage. And it’s constantly getting faster and faster. So there’s going to be a demand for Siaberry in the near future and even now.

At the time of this talk, storage demand was growing, but not as dramatically as Sebuh implied. Usage of the Sia network grew from 74 TB to 221 TB in six months. This represented 16% growth rate month-over-month, which was healthy but hardly the exponential growth rocket ship that Sebuh painted.

Tellingly, Sebuh neglected to mention that Sia’s total capacity at the time was 4 PB, meaning that a staggering 95% of Sia’s existing host capacity was sitting unsold:

Sebuh did make an argument for why customers should buy a Siaberry ahead of renter demand:

4:00 - When you start hosting, the network doesn’t trust you because you have a age penalty, and you’re brand new on the network, nobody trusts you. So, like, after a while, you’ve been on the network online 100%, for like, three months, then your age penalty is removed. So, if you want to be making money three months from now, you have to start today.

Sebuh is correct that Sia applies an age penalty to new hosts, but the penalty reduces to zero after 41 days, not three months:

10:54 - There’s 78,000 active contracts on the network right now. That means there’s 78,000 people that have signed up to use Siacoin as a storage platform.

This statement is entirely incorrect. Storage contracts are not the same as storage users. Each Sia user has 50 contracts minimum, but a user’s contract count can grow to over 100.

I estimate that the 78,000 active contracts represented about 1,000 Sia users. Even that figure is misleadingly high because it includes people who experimented with Sia at any point in the prior three months regardless of whether they continued to use Sia.

11:50 - Our goal at Siaberry Incorporated is to reach 50% of the network’s total storage. The way we’re going to do that is by launching another 895 Siaberries [ed: At the time, only 30 Siaberries were online].

If we double the size of the network, Siacoin will become more appealing for- y’know enterprise-grade clients. That’s what we really want. We want big like companies like Walmart that generate like terabytes and terabytes of just receipt transactions a second.

Again, Sia’s total capacity was 4 PB. If Walmart was generating “terabytes” of data per second (a claim I was unable to verify), that’s at least 86 PB per day. If Siaberry devices doubled Sia’s network capacity to 8 PB, Sia would still be utterly irrelevant to a company like Walmart, whose storage needs are likely measured in zettabytes (millions of petabytes).

$234 of hardware in a$500 box

Siaberry’s flagship product is their “Siacoin Hosting Contract Harvester” kit. It’s a set of hardware parts that allows customers to build their own Siaberry hosting nodes.

If you give Siaberry $500, they’ll send you four items that you could have purchased on Amazon for less than half the price: ItemPrice Raspberry Pi kit$54.99
Seagate 8TB external drive$159.99 SanDisk Ultra 16GB MicroSD card$8.59
SanDisk 32 GB USB 3.0 Flash drive$10.99 Total$234.56

As far as I can tell, the value-add that Siaberry gives their customers in exchange for that \$265.44 profit margin is:

• They put together your Raspberry Pi case for you (a process that takes about 30 seconds).
• They write the (free) SiaberryOS image to the microSD card for you.
• They bootstrap the USB key with the Sia blockchain, so you wait less time for it to download.

Open source, but where’s the source?

SiaberryOS was released almost a year ago, on July 27th, 2017. As savvy cryptocurrency users, /r/siacoin members asked Siaberry to publish their source code. Siaberry developer Kete Tefid responded:

I declare that SiaBerryOS is open source! Exactly like its father i.e., Gentoo. Actually, it is just that I have not finished uploading the project to github.

Rest assured that it was being developed with being opensource in mind from the beginning. It is and will always be.

-Kete Tefid, Siaberry developer

So it’s open source, just without the source?

Note that Siaberry released the SiaberryOS under the GPLv3, which states:

Our General Public Licenses are designed to make sure that you have the freedom to distribute copies of free software (and charge for them if you wish), that you receive source code or can get it if you want it, that you can change the software or use pieces of it in new free programs, and that you know you can do these things.

Users returned to the thread for weeks asking Kete when he would publish the source. A month later, he replied:

The process of creating the repository is going to take time as over months I changed files. Remember that Gentoo is a source-based, meta distribution which means you will not find the source code of most of the programs used in the Siaberry github. It will consist of a directory of ebuilds by which you can manage to replicate the project. In fact, it will just direct you how to build the OS.

-Kete Tefid, Siaberry developer

This response doesn’t make sense. Changing the contents of a file doesn’t make it any harder to publish.

Kete seems to claim that there isn’t any source to publish because building the image is just a matter of tying together existing libraries with the right commands. But this is clearly not the case, as SiaberryOS contains several built-in scripts that are custom-written for Siaberry. That means that the Siaberry team has these scripts somewhere, but has not published them.

In October 2017, Siaberry published the source for the Siaberry web app but continued to withhold the source code of the operating system itself.

Siaberry’s currently published FAQ includes a question about source code availability, but the answer is just more deferrals and excuses:

Q: Is SiaBerryOS open-sourced?

A: Yes, from the developer “The project has been open source from the very first beginning. It is just that I have been very busy developing it further so I have not been able to release the repository.” SiaberryOS can be found on github.

At the time of this writing, there is nothing on the SiaberryOS Github except a compiled image that’s two versions out of date:

Siaberry deploys unstable versions of Sia

In the #siaberry channel of Sia’s Discord server, Kete mentioned that instead of using official Sia releases, Siaberry blindly downloads the latest in-progress code from Sia’s source tree. I checked my Siaberry device and found a weekly cron job that replaces the OS’s copy of Sia with a newly-built binary based on whatever Siaberry finds in Sia’s master branch on Github.

This is a dangerous practice. The code in Sia’s master branch has not gone through rigorous testing. Bugs in pre-release code could lose user funds or corrupt their data.

I reported this to Siaberry on 2018-03-30. Kete claimed that because the Sia documentation includes instructions for building from source, it is, therefore, safe to deploy in-progress versions of Sia to customer devices.

I pointed out that even when the Sia developers invite users to test beta releases, they advise against deploying to production. Kete’s response was, “Sorry but we need official word on this. Of course, if they say so, we will change the behavior.”

At that point, I looped in David Vorick, Sia’s lead developer. He confirmed to Kete that Siaberry should not deploy pre-release Sia builds to production:

This discussion happened more than two months ago. Siaberry still deploys the latest bleeding-edge, untested Sia code to their customers’ devices with no regard to the risks this introduces.

Siaberry markets to the “get-rich-quick” crowd

Siaberry’s Sales Manager, Isabelo Pasqual, recently published a video in which he makes a direct appeal to people interested in multi-level marketing schemes (also referred to as “MLM schemes” or “pyramid schemes”):

1:10 - For those of you who are interested in the crypto cloud mining MLMs that are so popular now, imagine this: instead of being on the 500th tier of a downline, what if you were on the top of your own upline? And then you were controlling the mining pool. So that’s something we can give you.

-Isabelo Pasqual, Siaberry Sales Manager

To be clear, Siaberry does not use multi-level marketing. I have a hard time understanding why they’re mentioning MLMs at all.

In any case, it should give you pause when a company basically says, “Hey! Are you someone who’s easily fooled by get-rich-quick schemes? Then give us your money.”

Final thoughts

I don’t feel that Siaberry hardware or software is a good choice for any customer interested in getting involved with Sia. The quality of the software is low and substantially degrades Sia’s security and stability.

The product’s strategy relies on incorrect assumptions about Sia. Either the Siaberry team is willfully deceiving their customers or they’re saying what they believe but fundamentally misunderstand the technology underlying their business.

If you’re interested in getting involved with Sia through hosting, I encourage you to do your own research. Sia nodes are Internet-facing servers and require technical expertise to manage. If someone tells you that they have a Sia host device that you can simply plug in and collect Siacoin, they’re selling you snake oil.

For unbiased, high-quality information about hosting on Sia, I recommend reading the guides on SiaSetup.info.