A new protocol has been launched on the Arbitrum One network that allows users to directly mine new Bitcoin (BTC) without having to run their own expensive ASIC machines.
Lumerin, a decentralized data stream routing project, has turned Bitcoin hash power into a tradable, liquid asset that can be bought and sold in a peer-to-peer marketplace using smart contracts.
Lumerin’s Hashpower Marketplace is built on Arbitrum, a layer-2 scaling solution for Ethereum that offers low fees, high throughput, and compatibility with Ethereum smart contracts.
It now allows users to specify the amount, duration, and price of the hash rate they want to buy or sell.
Arbitrum also uses optimistic rollups to bundle transactions on a sidechain and then periodically post them on the main chain. This reduces congestion and costs on Ethereum while maintaining its security and decentralization.
The transactions are trustless and secure, as the smart contracts act as escrows that release the payments in real time as the hash rate is delivered.
Along with that, the buyers can use their own devices to receive the hash rate and mine new Bitcoin blocks.
Lumerin’s founder, Ryan Condron, explained that the protocol aims to democratize Bitcoin mining and make it more accessible and profitable for retail investors.
In an interview with a news publication, he also stated that Lumerin will serve as the digital piping that connects the flow of hash rate from ASIC to the smart contract, and then to the buyer’s device.
He further added that Lumerin also helps decentralize the ownership and distribution of Bitcoin’s hash rate, which improves the health and security of the network.
“The top 3 mining pools control approximately 50% of the total Bitcoin hashrate,” he noted.
“Instead of directing their hashpower to one dominant mining pool, miners now have the flexibility to distribute their hashpower through various smart contract offers.”
Lumerin’s protocol is now operational on the Arbitrum One network, which is open to the public and accessible on the marketplace through Lumerin’s website.
Furthermore, Lumerin is also planning to launch its own token, LMRN, which will be used for governance and incentives on the platform.