After a testnet period, the Lumerin hashpower marketplace will be launched on the Arbitrum One network, which provides a decentralized platform for buying, selling and trading Bitcoin mining hashpower.
Lumerin’s new platform, officially launched on September 26, is designed to smooth out the ‘peaks and valleys’ in Bitcoin mining operations, allowing both miners and non-miners to buy and sell hashrate computing capacity via smart contracts, with parameters set set such as hashrate amount, duration and price, according to a statement.
All transactions are reliable and peer-to-peer, with payments made in real time upon completion of the contract, Lumerin noted.
Lumerin said the market helps companies manage operational risks, allowing them to set fixed prices that provide predictability to their revenues. It also reduces the need to invest in rapidly depreciating equipment, allowing miners or other participants to dynamically add or reduce their Bitcoin hashpower. Another use case would allow miners in low-cost electricity areas to arbitrage their cheaper Bitcoin mining production by selling their hashpower at global market rates.
The decentralized data routing protocol project said the decision to select Arbitrum for its hashpower marketplace came down to user experience, faster transactions and lower gas fee benefits, making Bitcoin hashrate trading more liquid and accessible.
Lumerin hashpower marketplace. Image: Lumerine.
Decentralization of Bitcoin Mining
The overall hashrate on the Bitcoin network is currently at record highs, according to The Block’s data dashboard, consistent with a decline in average miner revenue since a peak in May as the market becomes more competitive.
Bitcoin mining pools consist of multiple entities and are distributed globally, but there is some concern about the amount of hashpower concentrated in a few top mining pools. This has fueled fears of centralization, with Foundry and AntPool currently together accounting for more than 50% of the network’s total hashpower.
However, when the share of miners joining a particular pool has risen too high in the past, miners have voluntarily sent their hashpower to alternative pools, improving distribution.
Distribution of Bitcoin mining pools. Image: BTC.com.
Lumerin claims its platform can help decentralize Bitcoin mining by opening the market to anyone to buy, sell and trade hashpower without needing their own expensive specialized mining hardware or long-term hosting and energy commitments.
Via the Lumerin walletusers can purchase hashpower contracts, which direct hashpower to their preferred pool and earn mining revenue instantly, the project said.
“Today marks a milestone in our journey to redemocratize mining,” said Lumerin founder Ryan Condron. “Now that the Lumerin Hashpower Marketplace is live, we are beginning to restore decentralization to the Bitcoin mining landscape by providing a direct, accessible path for everyone to become part of the mining ecosystem.”