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Lumerin Hashpower Marketplace

How Hashrate Contracts Fit Into The Current Bitcoin Mining Ecosystem

Miners and users can take advantage of this technology to create new Bitcoin mining opportunities

The Bitcoin mining ecosystem has transformed completely. Back in Bitcoin’s early days, it was hard to imagine that specialized hardware and entire corporations would sprout from the ground just to find blocks. Yet here we are.

Now, with the launch of the Lumerin Hashpower Marketplace, miners will enjoy a new option for mining Bitcoin: hashrate contracts.

What are hashrate contracts?

Hashrate contracts are a new type of transaction that allows users to effectively trade Bitcoin mining computing power in a decentralized fashion.

Miners can sell their hashpower, redirecting it to buyer’s mining pool accounts. Buyers, on the other hand, can access a constant stream of hashrate that allows them to mine Bitcoin without the burdens of hardware and infrastructure maintenance.

In short, this is a new, different way to approach mining. Let’s dive deeper into the characteristics of mining with hashrate contracts and compare it with running your own ASIC-based hardware.

Unlocking accessibility to Bitcoin mining

One of the greatest advantages of hashrate contracts is accessibility. Starting a mining operation requires an extensive capital investment in hardware and infrastructure. Even when an aspiring miner is committed to get started, the investment required may be too high for them.

Of course, this is far from ideal. Everyone should be able to participate in Bitcoin’s security if they wanted to. Fortunately, Lumerin hashrate contracts enable Bitcoin enthusiasts to do just that.

With only a browser wallet like MetaMask and some LMR, you would be able to mine Bitcoin immediately by purchasing a hashrate contract. You could simply browse the available contracts, pick one, and click purchase.

Through offering their hashrate on the Lumerin Hashpower Marketplace, experienced miners can help bring new people into Bitcoin mining for the first time without renouncing their rewards.

Convenience for one, a premium for the other

Bitcoin mining requires attention and care. To run a profitable operation, miners have to carefully manage their finances, regularly maintain and clean their hardware, and mitigate unpredictable factors such as the price of Bitcoin, the rate of mining difficulty, and more.

Hashrate contracts provide a simpler alternative — they involve one unique payment to the hashrate provider (e.g., the miner). All mining costs and expenses are included in the price set by the miner in the marketplace contract.

This creates a win-win situation for both parties: while crypto enthusiasts gain direct exposure to Bitcoin mining without having to set up an operation or acquire any hardware, experienced miners get to charge a slight premium for assuming the risks and producing that hashrate.

Providing flexibility to miners and buyers alike

ASIC miners are not versatile machines. There are limited options for ASIC models, which have a fixed hashrate output.

Moreover, once you acquire an ASIC, you have to stick with it. As a result, when it comes to acquiring mining hardware, miners often have to adapt to the few options the market offers.

Hashrate contracts have the potential to bring increased flexibility to the table, both for miners and buyers.

Using the Lumerin Hashpower Marketplace, users can take advantage of several options in terms of duratios, price, and hashrate speed.

In the first place, miners can split up their hashrate into multiple contracts of variable durations and amounts, granting them the ability to plan different strategies.

For example, a miner could create several weekly contracts of low hashrate to enjoy some short term income, and a few larger, longer contracts to ensure long term consistency.

On the buyer’s side, hashrate contracts allow them to mine for months, days, and even hours, at different hashrate speeds and costs — it’s up to their personal preferences.

Closing thoughts

As we described in this article, decentralized, peer-to-peer hashrate contracts are a new technology that can bring many advantages to the mining industry, both for aspiring and experienced miners alike.

Lumerin strives to make mining as inclusive, easy, and optimized as possible for everyone. We are confident that the Lumerin Hashpower Marketplace is a huge step into that direction.

We believe that for Bitcoin to scale, we need to keep building to support its infrastructure and ensure decentralization remains the top priority.

Photo by Joshua Woroniecki on Unsplash

In that regard, the Lumerin Hashpower Marketplace and its hashrate contracts will enable new possibilities for mining, making it more sustainable and accessible, in turn helping Bitcoin become more secure and decentralized as it scales.

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