Introduction to the Lumerin Protocol: FAQs
Frequently asked questions about the Lumerin Protocol and how it works
What is the Lumerin Protocol?
The Lumerin Protocol is a decentralized, peer-to-peer blockchain network that allows exchanging, rerouting, and redirecting hashrate effectively. In it, users can transfer crypto mining hashrate ownership and control like any other commodity.
Through a simple architecture that pairs a TCP/IP proxy router with an EVM smart contract engine, Lumerin can route data streams — such as hashrate — based on immutable rules written on the blockchain.
If you want to read more about why Lumerin is important, check out our article:
How does Lumerin work?
The Lumerin Protocol architecture consists of:
- A messaging layer to allow transmission and routing of information between nodes
- An EVM compatible component to allow the implementation of smart contracts
The cooperation of these points will allow new types of information to be shared and used on a blockchain network.
What is the difference between Titan and Lumerin?
Titan is a commercial software company that provides powerful services for crypto mining at scale. On the other hand, Lumerin is an open-source and community-driven project for a peer-to-peer solution that enables the decentralized control of hashpower.
Titan kickstarted the Lumerin project and is providing significant effort and resources to its development, but it doesn’t own it. On the contrary, as other blockchains networks, Lumerin is entirely public and decentralized.
What does the future look like for Lumerin short and long-term?
As we mentioned, any asset transferable through TCP/IP protocols will be deliverable through the Lumerin Protocol. However, our first priority is to build a decentralized hashpower marketplace. Hashrate commoditization will be Lumerin’s first use-case, attainable through the Lumerin token.
Nevertheless, it doesn’t end here. Lumerin will be a fully-decentralized, open-source, programmable protocol. As such, developers will be able to deploy their own smart contracts on Lumerin’s blockchain.
We want to encourage the community to build on top of the network and develop new ways to harness the full potential of hashpower.
What is the Lumerin Hashpower Marketplace and how does it work?
The hashrate marketplace platform will be hosted in the Lumerin Protocol. Through it, users will be able to buy, sell, and trade hashpower in a decentralized manner with no intermediaries involved.
First, miners will create a smart contract where they will set the conditions for the trade, namely:
- How much hashrate they are offering.
- For how long they will provide that hashrate.
- How many LMR tokens they are asking for.
Buyers will be able to view these terms in advance. Should they accept, they will lock their LMR tokens into the contract as payment. The smart contract will act as an escrow service.
Then, the seller will start routing their hashrate to whatever mining pool the buyer indicates.
What is the difference between the Lumerin Protocol and Hashpower Marketplace?
The Lumerin Protocol is a programmable, EVM compatible, and decentralized blockchain platform that establishes a peer-to-peer network on which developers can build applications for users to transact with each other.
The Hashpower Marketplace, on the other hand, is one of those decentralized applications — dApps — built on top of Lumerin, in which users can buy and sell crypto mining hashpower.
What is hashrate?
“Hashing” refers to converting any data input to a fixed-length hexadecimal output — a hash.
Essentially, crypto mining consists in finding block hashes. However, the only way to do this is through trial and error. Miners have to “guess” one hash after the other until they find one that meets the network’s difficulty parameters. The amount of guesses a miner can make per second is what we know as hashrate.
In other words, hashrate — or hashpower — refers to the rate of calculations a miner can perform to solve a block.
If you want to learn more about Bitcoin mining, check out our educational article:
Why do we need a decentralized hashrate marketplace?
With the institutionalization of mining over the last years, concerns for centralization have risen.
Large-scale mining operations usually point all their hashrate to one single pool. This is a linear dynamic that creates only one decision-maker for that large amount of hashrate: the pool operators.
As a result, the top 3 mining pools currently control ~50% of the total Bitcoin hashrate. If we expand to the top 10, then these few groups concentrate 97% of the network’s hashrate. This centralization, not of geographical location but of control of hashrate, poses a risk to Bitcoin.
A decentralized hashrate marketplace enables a new proof-of-work dynamic that favors decentralized ownership of hashrate. Instead of selling their hashpower to a single mining pool, miners can create different offers to put their hashpower up for sale in the form of smart contracts.
When miners split up their hashpower in different contracts and offers, they facilitate access to hashrate for retail and small investors.
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Do you want to learn more?
Lumerin is still in early stages. Make sure to follow us on Medium so you don’t miss any news and content. You can also subscribe to our blog and visit Lumerin.io for more information. We’ll be glad to have you!
Join the Lumerin community!
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