April 19, 2024
Revolutionizing Bitcoin Mining: Lumerin's Protocol Allows Direct Hashpower Trading
Bitcoin News

Revolutionizing Bitcoin Mining: Lumerin’s Protocol Allows Direct Hashpower Trading

A new Arbitrum protocol makes it possible to directly mine new Bitcoin (BTC) without having to run your expensive ASIC machines.

Lumerin—a decentralized data stream routing project—has turned Bitcoin hash power into a tradable, liquid asset that can be bought and sold in a peer-to-peer marketplace using smart contracts.

“Bitcoin miners will have a frictionless path toward buying and selling mining capacity, and non-miners will be able to participate in the same marketplace,” wrote Lumerin in a press release.

According to the statement, miners may define the hash rate quantity, service length, and pricing when selling their capacity through the Lumerin Hashpower Marketplace. In a situation where Bitcoin’s occasionally unpredictable price mainly determines miners’ income, this aids in the creation of a stable revenue stream.

On the other hand, current miners may buy greater capacity to boost profits without having to buy quickly depreciating machinery.

Industrial mining businesses have long provided centralized cloud mining and colocation services, allowing users to rent their ASICs using tokenized securities. For instance, Blockstream provides access to its mining equipment to anyone via the Blockstream Mining Note (BMN), a security token on the Liquid network.

Lumerin, in contrast, decentralizes the procedure by directly transmitting actual hashrate to customers’ devices.

“Lumerin is the digital piping that connects the flow of hash rate from ASIC to the smart contract to the buyer’s device,” Lumerin founder Ryan Condron explained. “The nodes feed the information to the smart contract, which acts as an escrow that keeps the buyers’ funds secure, releasing them to the seller in real-time as the hashrate is delivered.”

Condron said that if a hash rate supplier breaches their whole contract, purchasers may use Lumerin’s method to obtain their precise money back. By assisting in its distribution to small investors, it also contributes to the decentralization of ownership of Bitcoin’s hash rate, enhancing the network’s stability.

“The top 3 mining pools control approximately 50% of the total Bitcoin hashrate. Instead of directing their hash power to one dominant mining pool, miners now have the flexibility to distribute their hash power through various smart contract offers.” He concluded.

Bitcoin innovators like Luke Dashjr have cautioned that the contentious “Drivechains” Bitcoin concept might become riskier as a result of the concentration of mining pools since there is a higher possibility that miners will steal users’ coins following the update.

Image: Unsplash

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