Lumerin’s Protocol Allows for Direct Bitcoin Mining
A new protocol developed by Lumerin, a decentralized data stream routing project, enables individuals to mine Bitcoin without the need for expensive ASIC machines. The Lumerin Hashpower Marketplace allows miners to sell their mining capacity through smart contracts in a peer-to-peer marketplace. This opens up the opportunity for non-miners to participate in the same marketplace as well.
How Does It Work?
The Lumerin protocol allows miners to specify the amount of hash rate, duration of services, and price when selling their capacity. This creates a predictable revenue stream for miners in an environment where Bitcoin’s price can be volatile. Existing miners can also purchase more capacity without having to invest in costly equipment that depreciates quickly.
Decentralization and Benefits
Lumerin’s approach decentralizes the process by directly streaming the hash rate to buyers’ devices. The nodes feed information to smart contracts, acting as escrows that secure buyers’ funds and release them in real-time as the hash rate is delivered. If a seller fails to fulfill their contract, buyers can receive a refund. This method also helps distribute ownership of Bitcoin’s hash rate to retail investors, improving network health and reducing centralization risks.
Impact on Mining Pools
Currently, the top three mining pools control around 50% of Bitcoin’s total hash rate. By allowing miners to distribute their hash power through various smart contract offers, Lumerin’s protocol aims to mitigate centralization risks associated with mining pools. This could have implications for proposals like “Drivechains,” which developers warn could become riskier with increased pool centralization.
Hot Take: Lumerin Revolutionizes Bitcoin Mining
Lumerin’s innovative protocol has the potential to revolutionize the Bitcoin mining landscape. By enabling direct mining without the need for expensive hardware, Lumerin opens up opportunities for both miners and non-miners to participate in the hash power marketplace. The decentralized approach ensures secure transactions through smart contracts, while also distributing ownership and reducing the dominance of mining pools. With its potential to improve network health and increase participation, Lumerin’s protocol could reshape the future of Bitcoin mining.
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