# Why 99% of Tokens May Crash Down to Zero Dollars While SFIL Will Never?

Honestly speaking, 99% of tokens may crash down to zero dollars, which will never happen with SFIL because it was backed by real value.

Each SFIL has a certain cost. It is like a cheque that can always be exchanged for gold and equivalent hash power assets. Though SFIL’s price may go up and down, it will always fluctuate along with its corresponding value.

SFIL is Filecoin hash power in nature, and it is also the tokenization of Filecoin mines. Like BTC hash power, each SFIL will have a certain cost as it is pegged to 0.01T FIL hash power. Therefore, the price of SFIL will fluctuate up and down along with the encapsulation cost of Filecoin hash power.

So, how to calculate the cost of Filecoin hash power?

Filecoin hash power cost = Mining machine cost + FIL charged for encapsulating hash power

The cost of a mining machine for 1T hash power is around $250, and the amount of FIL charged with encapsulation fluctuates with the Filecoin network. You can check all those data via the Filecoin blockchain explorer.

As you can learn from the chart, it took 4.74 FIL to encapsulate 1T Filecoin hash power. The current price of FIL is $40, so the overall cost is:

The cost of 1T hash power = $250 + 4.74 * $40. = $439.6

1 SFIL = 0.01T Filecoin hash power. Therefore, the cost of 1 SFIL is:

$439.6/100 = $4.39

If you buy hash power from providers, the price will go up by 30%. Therefore, the price of SFIL in the secondary market should be:

$4.396 * (1 + 30%) = $5.7

Even when SFIL’s price in the secondary market is lower than the cost of hash power, numerous investors will bulk purchase. If the current price of Bitcoin is $60,000, and you have a chance to buy it at $55,000, we believe that no one would hesitate.

Therefore, SFIL has strong price support in the secondary market.

So, how does the price of SFIL fluctuate?

We can learn that SFIL’s price fluctuates up and down along with the cost of Filecoin hash power.

Filecoin hash power cost = mining machine cost + Filecoin cost charged for encapsulating hash power

The cost of the mining machine fluctuates slightly over time, so it mainly depends on hash power encapsulation cost. To calculate it, we have to figure out the price of FIL and the amount of FIL charged for encapsulating 1T hash power.

Eg:

One year later, it takes 4 FIL to encapsulate 1T hash power, and the price of FIL is 200 USD at that time.

The cost of encapsulating 1T hash power is:

250 + 4*200 = $1050

Then, the cost price of SFIL is 1050/100 = $10.5

Currently, the price of SFIL is $7. Therefore, you bought 1000 SFIL at the cost of $7000. The mining efficiency is 0.0002 FIL/SFIL/day, and you can get 58.4 FIL a year later. Meanwhile, SFIL’s price went up from $7 to $10.5 and you have earned $3,500 on the side.

According to SFIL’s cost structure and historical data, we can learn that SFIL’s price fluctuates with that of FIL.

This is the valuation model of SFIL and the price logic of the secondary market.

Therefore, SFIL is a mining token with a price guarantee, stable returns, and a clear valuation model.

**Just
as Warren Buffett once said, the most important thing for investors is
capital preservation. It also holds water for crypto investments.**

**In
the crypto market, it’s quite normal that the price of tokens swings
wildly and even crashes down to zero. To conclude, investing in cryptos
was quite risky. **Therefore, we strongly recommend you to hold some tokens with stable earnings when making investments, such as SFIL.