What is the Lumerin Hashpower Marketplace?
Decentralizing hashpower creation from control
The need for hashpower commoditization
Bitcoin adoption is accelerating. More and more people, institutions, and even countries are realizing the benefits of hard money and a decentralized, peer-to-peer, electronic cash system.
In that scenario, Mining isn’t an exception. Everyone wants to run their own cryptocurrency miner. Demand for hashpower has increased significantly during the last years, and it shows no signs of stopping.
Unfortunately, the market for hashpower is subject to many factors that add considerable friction: component shortages, industrial bottlenecks, supply chain delays, etc.
But what if we had a DEX for hashpower? A platform where people could not only buy and sell, but actually reroute and control the computing power produced by someone else? The Lumerin Protocol will provide a network where such a marketplace can exist.
How are Lumerin and the hashpower marketplace built?
The Lumerin Protocol architecture consists of two fundamental aspects:
- 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 — such as hashpower — to be shared and used on a blockchain network. Essentially, any “asset” that can be transferred through TCP/IP protocols will be deliverable through the Lumerin Protocol.
However, initially, we are implementing our first-use case to support a hashpower marketplace.
How does the marketplace work?
Miners willing to sell their hashpower in the Lumerin Hashpower Marketplace will be able to create specific offers in the form of smart contracts. These contracts will require them to determine the conditions of the deal, namely:
- How much hashpower they are offering.
- For how long they will provide that hashpower.
- 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 that will gradually deliver the funds and hashpower to the respective parties.
Once the deal is locked, the seller will start routing their hashpower to whatever mining pool the buyer indicates.
The Lumerin nodes will facilitate the hashpower routing from the mining rigs themselves to the actual location of the pool, enforcing honest behavior. They will verify and prove hashpower delivery to ensure the contract terms are fulfilled and both the hashpower and funds are delivered accordingly.
Did you know there’s a demo of the Lumerin Hashpower Marketplace live on the Ropsten Testnet? Visit the tutorial below to try it out!
Unlocking the full potential of hashpower
Through blockchain technology and smart contracts, the Lumerin Protocol unlocks access to a global, frictionless, and decentralized hashpower marketplace.
Miners will enjoy better access to larger markets for their hashpower, while buyers will have the chance to acquire it at reduced risk.
The commoditization and tokenization of hashpower will provide additional opportunities for the entire mining industry through financial derivatives and services. Miners will be able to create financial products on top of the hashrate they’re generating.
Additionally, the Lumerin Protocol will be completely open source, so develeopers will be able to deploy their own applications on the blockchain. Every platform and smart contract will be accessible for everyone to review and audit.
Final thoughts
The hashpower marketplace hosted by the Lumerin Protocol will not only provide frictionless access to hashpower as a commodity at a global scale. It will also enable the development of several hashpower-based derivatives and financial products and services.
Security and honest behavior will be enforced by smart contracts that everyone can audit and verify, and every single transaction or trade performed by users will be recorded on the blockchain. All this is necessary for the marketplace to be fair, transparent, and effective.
However, the most essential benefit this technology will provide is decentralization. The Lumerin Protocol will enable decoupling hashpower production from control, allowing global distribution regardless of hardware location.
Do you want to learn more?
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