A new protocol called Arbitrum has opened up a revolutionary way to mine Bitcoin without the need for expensive ASIC machines. Lumerin, a decentralized data stream routing project, has developed a platform that allows Bitcoin hash power to be traded as a liquid asset in a peer-to-peer marketplace utilizing smart contracts.
In a press release shared with Decrypt, Lumerin describes how this new approach benefits both miners and non-miners. Miners can now easily buy and sell mining capacity without any friction, while non-miners can also participate in the marketplace. This opens up new opportunities for individuals to generate revenue from Bitcoin mining without the need for costly equipment.
The Lumerin Hashpower Marketplace provides options for miners to sell their capacity by specifying the amount of hash rate, the duration of services, and the price. This creates a predictable revenue stream for miners, enabling them to navigate the volatility of Bitcoin prices.
On the other hand, existing miners can purchase additional capacity to boost their revenue without the need to invest in fast-depreciating equipment. This flexibility allows miners to adapt to changing market conditions and optimize their mining operations.
Cloud mining and colocation services offered by industrial mining firms have been around for years, allowing individuals to rent ASICs through tokenized securities. In contrast, Lumerin aims to decentralize the process by streaming actual hash rate directly to buyers’ own devices.
Founder of Lumerin, Ryan Condron, explained that Lumerin acts as the digital piping that connects the flow of hash rate from ASIC to a smart contract to the buyer’s device. The nodes provide information to the smart contract, which acts as an escrow, securing the buyer’s funds and releasing them to the seller in real-time as the hash rate is delivered. This method ensures that buyers can receive a refund if the hash rate seller fails to fulfill their contract, providing added security and trust in the marketplace.
One crucial advantage of Lumerin’s approach is that it helps distribute the ownership of Bitcoin’s hash rate to retail investors, improving the overall health and decentralization of the network. Currently, the top three mining pools control approximately 50% of the total Bitcoin hash rate. By allowing miners to distribute their hash power through smart contract offers, Lumerin provides an alternative to the dominant mining pool, reducing the risk of centralization.
The centralization of mining pools has raised concerns among Bitcoin developers like Luke Dashjr. They argue that this concentration of power could increase the risks associated with proposals like Drivechains, making it easier for miners to potentially steal users’ coins after the proposed upgrade.
In conclusion, Lumerin’s Arbitrum protocol presents an innovative solution for Bitcoin mining by facilitating the direct trade of hash power in a decentralized marketplace. By eliminating the need for expensive ASIC machines, Lumerin opens up new opportunities for both miners and non-miners to participate in the Bitcoin ecosystem while improving the network’s decentralization.
