Bitcoin hashrate futures coming. Mining boom on the way?

Bitcoin hashrate futures coming Mining boom on the way

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Bitcoin hashrate futures are coming soon. Yes, it seems the sluggish days of the cryptocurrency mining industry are over as news points towards the launch of Bitcoin hashrate futures. These highly specialized derivatives will help support the energy-hungry mining operations.

Even though mining activity has picked up pace slowly, the margins are decreasing, and profits are slim. Bitcoin mining has become an enterprise-only realm and small players have been shifted to the sidelines. Now, ASIC players and big pools are the entities that make some profits.

Bitcoin hashrate futures will reduce mining risks

Currently, miners do not have any protection against the fluctuating Bitcoin prices. So, bitcoin hashrate futures will help prevent any untoward losses and act as a hedge against the constantly changing bitcoin prices. Small mining pools are highly susceptible to the constant shift in the hashrate. Also, big pools can accommodate more resources for mining, handle energy bills and run more ASICs. With bitcoin hashrate futures, they can certainly lower the risks.

Increasing hashrate represents stiff competition and difficult mining operations. After every 2016 blocks, the hashrate difficulty is readjusted, which in turn changes the BTC earnings chances. The difficulty rises sharply and then mellows down abruptly leaving miners in perpetual confusion.

DAG Global already offers Hashrate derivatives

DAG Global, based in London, already offers Bitcoin hashrate derivatives. Robert Andersen of DAG Global says that our cryptocurrency merchant bank that offers protection against the risks associated with cryptocurrency mining. They practically hedge you against losing money too quickly during wild shifts in the bitcoin hashrate.

Since profitability in mining is dependent on the spot prices, many miners often sell a fraction of the earnings immediately to fund their operations. In case the profits are hedged, the spot market price risks can be avoided altogether. Also, this can have an impact on the energy costs relating to mining, as well.

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Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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