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Lumerin to Launch Decentralized Bitcoin Hashpower Market on Arbitrum

By
Paul Ugbede Godwin
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0
The Bluesky social media app logo is seen on a mobile device in this photo illustration in Warsaw, Poland on 21 April, 2023. Founder Jack Dorsey of twitter has released the Bluesky application on Android. (Photo by Jaap Arriens / Sipa USA)(Sipa via AP Images)

Lumerin, a startup that aims to democratize access to Bitcoin mining, has announced that it will launch its decentralized hashpower market on Arbitrum, a layer-2 scaling solution for Ethereum. The market will allow anyone to buy and sell hashpower contracts, which are agreements to mine Bitcoin for a certain period of time and receive a share of the rewards.

Bitcoin hashpower market is a term that refers to the amount of computing power that is used to secure the Bitcoin network and process transactions. Hashpower is measured in hashes per second (H/s), which is the number of possible solutions to a cryptographic puzzle that miners have to solve in order to create new blocks and earn rewards.

Lumerin’s vision is to create a more inclusive and sustainable Bitcoin mining ecosystem, where anyone can participate without having to invest in expensive and energy-intensive hardware. By leveraging Arbitrum’s low-cost and high-throughput transactions, Lumerin hopes to offer a fast and secure way to trade hashpower on the blockchain.

Lumerin’s hashpower market will use a novel mechanism called Proof-of-Hashrate (PoH), which verifies the amount of hashpower delivered by the sellers and ensures fair payouts to the buyers. PoH works by requiring the sellers to submit proofs of their mining activity, such as block headers or Merkle proofs, to a smart contract on Arbitrum. The contract then validates the proofs and distributes the rewards according to the terms of the hashpower contract.

The hashpower market is influenced by various factors, such as the price of Bitcoin, the difficulty of mining, the availability and cost of electricity, the innovation and competition among mining hardware manufacturers, and the regulation and taxation of mining activities in different jurisdictions.

One way to measure the hashpower market is by looking at the total hash rate of the Bitcoin network, which indicates how much computing power is being used at any given time. According to Blockchain.com, the Bitcoin network’s hash rate reached an all-time high of 197.6 exahashes per second (EH/s) on October 23, 2021. This means that miners were collectively performing 197.6 quintillion (197.6 x 10^18) hashes per second.

Another way to measure the hashpower market is by looking at the distribution of hash rate among different mining pools, which are groups of miners that share their resources and split the rewards. According to BTC.com, as of September 26, 2023, the top five mining pools by hash rate were AntPool (18.9%), F2Pool (16.8%), Poolin (15.4%), Binance Pool (11.2%), and Foundry USA (7.4%). These pools represent a diverse range of regions, such as China, North America, Europe, and Southeast Asia.

The hashpower market is constantly evolving and changing, as miners seek to optimize their profitability and efficiency. Some of the recent trends and developments in the hashpower market include:

The migration of hashpower from China to other countries, following the crackdown on cryptocurrency mining by the Chinese authorities in June 2021. According to Cambridge Bitcoin Electricity Consumption Index, China’s share of global Bitcoin mining power dropped from 65% in April 2020 to 46% in April 2022, and then to less than 10% in July 2023.

The adoption of renewable energy sources for Bitcoin mining, such as hydroelectricity, solar power, wind power, and geothermal energy. According to a report by the Bitcoin Mining Council, a voluntary organization of Bitcoin miners, 56% of global Bitcoin mining was powered by sustainable energy in Q2 2021, up from 36.8% in Q4 2020.

The emergence of new players and business models in the hashpower market, such as cloud mining services, mining-as-a-service platforms, hash rate futures contracts, and decentralized mining pools. These innovations aim to lower the barriers to entry and increase the liquidity and efficiency of the hashpower market.

Lumerin’s co-founder and CEO, said that launching on Arbitrum was a strategic decision that aligned with their mission of making Bitcoin mining more accessible and efficient. “Arbitrum is one of the most promising layer-2 solutions in the Ethereum ecosystem, and we are excited to leverage its scalability and security features to offer our users a seamless and trustless hashpower trading experience. By launching on Arbitrum, we hope to lower the barriers to entry for Bitcoin mining and create a more decentralized and resilient network,” she said.

The hashpower market is an important aspect of the Bitcoin ecosystem, as it affects the security, scalability, and sustainability of the network. The hashpower market is also a reflection of the innovation and competition that drives the Bitcoin industry forward.

Lumerin plans to launch its hashpower market on Arbitrum in Q4 2023, and will initially support SHA-256 mining, which is used by Bitcoin and other cryptocurrencies. The startup also intends to expand its offerings to other mining algorithms and coins in the future, as well as introduce more features and services for its users.

Understanding Smart Contracts

By
Paul Ugbede Godwin
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0

Smart Contract is a self-executing agreement that is written in code and deployed on a blockchain network. A smart contract can facilitate, verify, and enforce the terms of a contract between two or more parties without the need for intermediaries or trusted third parties.

Smart contracts were first proposed by Nick Szabo in 1994 as a way to extend the functionality of electronic transactions to the digital realm. He envisioned smart contracts as computerized protocols that could enforce the terms of a contract using cryptography and logic. Since then, smart contracts have evolved with the development of blockchain technology, especially on platforms like Ethereum.

Smart contracts are composed of code and data that reside at a specific address on the blockchain. They can receive and send transactions, store and manipulate data, and interact with other smart contracts. They can also have a balance of cryptocurrency that they can use to pay for their execution.

Smart contracts are executed by a network of nodes that run the blockchain. Each node follows the same set of rules and verifies that the smart contract code is executed correctly and consistently. Once a smart contract transaction is confirmed, it becomes part of the immutable ledger and cannot be changed or reversed.

Smart contracts have many potential applications in various domains, such as finance, supply chain, insurance, healthcare, and more. For example, a smart contract can be used to automate the payment of dividends to shareholders, to track the delivery of goods and services, to manage insurance claims, or to verify the identity and credentials of patients and providers.

Smart contracts are immutable, meaning that once they are deployed on the blockchain, they cannot be modified or deleted. This makes it difficult to fix bugs, update features, or resolve disputes that may arise from the contract execution.

Smart contracts are deterministic, meaning that they will always produce the same output given the same input and state of the blockchain. This makes it hard to incorporate external data or events that may affect the contract logic, such as market prices, weather conditions, or user inputs.

Smart contracts are transparent, meaning that anyone can view the code and the transactions of the contract on the blockchain. This may raise privacy and security issues for some users who do not want their data or activities to be exposed to the public.

Smart contracts are costly, meaning that they consume computational resources and network fees to execute on the blockchain. This may limit the scalability and efficiency of some applications that require high throughput or low latency.

Therefore, smart contracts are not a one-size-fits-all solution for every use case. They require careful design, testing, and auditing to ensure their correctness, security, and performance. They also require a clear understanding of the legal and regulatory implications of using them in different jurisdictions and contexts.

A US House Committee advances anti-CBDC Bill despite Democratic Overhang

By
Paul Ugbede Godwin
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0

The House Financial Services Committee has voted to approve a bill that would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) in the US. The bill, titled the “Keep Big Tech Out of Finance Act”, was introduced by Republican Representative Patrick McHenry and co-sponsored by 14 other Republicans. The bill aims to prevent the Fed from creating a digital dollar that could compete with or replace the existing fiat currency system.

CBDC stands for central bank digital currency, a form of money that is issued and regulated by a central authority, such as the Federal Reserve. CBDC is different from traditional fiat currency, which is physical cash or coins, and from cryptocurrencies, which are decentralized and operate on a peer-to-peer network.

The bill also seeks to prevent large technology companies, such as Facebook, Google, and Amazon, from offering financial services or issuing digital assets that could function as money. The bill defines a large technology company as one that has an annual global revenue of at least $25 billion and offers an online platform service with at least 50 million monthly active users in the US.

The bill’s supporters argue that a CBDC would pose a threat to the privacy and security of Americans, as well as undermine the stability and sovereignty of the US dollar. They also claim that a CBDC would give the Fed too much power and discretion over monetary policy, and that it would enable the government to track and control every transaction made by citizens.

One of the main benefits of CBDC is that it can enhance the efficiency and inclusiveness of the payment system. CBDC can reduce transaction costs, increase speed and security, and enable access to digital payments for the unbanked or underbanked population. CBDC can also foster innovation and competition in the financial sector, as well as provide new tools for monetary policy and financial stability.

Another benefit of CBDC is that it can strengthen the international role of the US dollar. CBDC can facilitate cross-border payments and remittances, reduce dependence on foreign currencies and intermediaries, and increase the attractiveness of the dollar as a reserve currency. CBDC can also enhance the US leadership and influence in the global financial system, as well as promote the adoption of high standards and best practices for digital finance.

However, CBDC also poses some challenges and risks that need to be carefully addressed. CBDC can have implications for the banking system, such as affecting the profitability and intermediation function of commercial banks. CBDC can also raise legal, regulatory, and operational issues, such as ensuring compliance with anti-money laundering and consumer protection laws, protecting data privacy and cybersecurity, and managing technical glitches and cyberattacks. Moreover, CBDC can have geopolitical implications, such as creating tensions with other countries that may perceive CBDC as a threat or a challenge to their sovereignty or interests.

The bill’s opponents, mainly Democrats, contend that a CBDC would offer many benefits to the US economy and society, such as increasing financial inclusion, reducing transaction costs, enhancing efficiency and innovation, and strengthening the competitiveness of the US in the global digital economy. They also assert that a CBDC would not necessarily replace cash or bank deposits, but rather complement them as an alternative form of money.

The bill was passed by a narrow margin of 26-25, with all Republicans voting in favor and all Democrats voting against. The bill will now move to the House floor for a full vote, where it is expected to face strong resistance from the Democratic majority. If the bill passes the House, it will still need to be approved by the Senate and signed by the President before becoming law.

Therefore, the design and implementation of CBDC require a comprehensive and collaborative approach that involves various stakeholders, such as policymakers, regulators, financial institutions, technology providers, academics, and the public. The US should also coordinate with other countries and international organizations to ensure consistency and interoperability of CBDC standards and frameworks. By doing so, the US can harness the potential benefits of CBDC while mitigating the possible drawbacks.

Salute to Staff of Nigerian Embassy in Washington DC; Well Done

By
Ndubuisi Ekekwe
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0

Good People, join me to commend the men and women who work in Nigeria’s embassy in Washington DC. I was there yesterday, and I met very happy people. Yes, everyone there was smiling and genuinely happy to meet their fellow citizens.

To the ambassador of Nigeria’s mission in the US (if we have one now), Consul-General, Directors, Head of Immigration and all our fellow citizens working there, a BIG SALUTE.

And the biggest: Nigerian citizens. Everything was organized, people followed the turns and life was just working. I want to thank the leaders and the government for whatever changes they have made on this. When I finished the capture, I was offered to wait for hours to get the passport. I said “really, I had planned it would arrive in 3 months”. Well done, Good People. It was like visiting Ovim.

MicroStrategy Acquires additional 5,445 BTC, As Bitcoin Gets Recognized in Shanghai People’s Court

By
Paul Ugbede Godwin
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0

MicroStrategy, the leading business intelligence and cloud-based software company, has announced that it has purchased 5,445 more bitcoins for approximately $147.3 million in cash. The company said that the average price of the acquired bitcoins was $27,053 per coin, inclusive of fees and expenses.

This latest acquisition brings MicroStrategy’s total bitcoin holdings to 114,042 bitcoins, which were bought for $3.16 billion at an average price of $27,713 per bitcoin. The company has been steadily increasing its bitcoin exposure since August 2020, when it made its first purchase of 21,454 bitcoins for $250 million.

MicroStrategy’s CEO Michael Saylor said that the company remains committed to its bitcoin strategy, which he believes is the best way to preserve and enhance shareholder value in the long term. He said that bitcoin is a superior store of value, a scarce and deflationary asset, and a hedge against inflation and currency devaluation.

Saylor also said that MicroStrategy is not only investing in bitcoin, but also innovating on the bitcoin network. The company recently launched a subsidiary called MicroStrategy LLC, which holds its bitcoin assets and provides treasury services to other corporations that want to adopt bitcoin as a primary treasury reserve asset.

MicroStrategy is one of the most prominent and vocal corporate advocates of bitcoin and has influenced other companies to follow its example. Some of the notable firms that have invested in bitcoin include Tesla, Square, PayPal, and Twitter. According to Bitcoin Treasuries, a website that tracks the bitcoin holdings of public and private companies, there are currently 42 entities that collectively own more than 1.4 million bitcoins, worth over $38 billion at current prices.

In a landmark ruling by the Shanghai People’s Court has officially recognized a unique digital currency as a form of property that can be protected by law. This is the first time that a Chinese court has granted legal status to a digital currency that is not issued by the state.

The case involved a dispute between two parties over the ownership of 3,000 units of a digital currency called “Q Coin”, which is used as a virtual currency in online games and social platforms operated by Tencent, one of China’s largest internet companies. The plaintiff claimed that he had purchased the Q Coins from the defendant for 12,000 yuan (about $1,860) in 2017, but the defendant refused to transfer them to his account. The defendant argued that Q Coins are not real money and have no legal value, and that the transaction was invalid.

The court ruled in favor of the plaintiff, stating that Q Coins are a unique digital currency that can be exchanged for goods and services within Tencent’s platforms, and that they have economic value and marketability. The court also noted that Q Coins are different from other digital currencies, such as Bitcoin or Ethereum, because they are not decentralized and are subject to Tencent’s management and regulation. Therefore, the court concluded that Q Coins are a type of virtual property that can be protected by law and ordered the defendant to transfer the 3,000 Q Coins to the plaintiff within 10 days.

This ruling is significant because it sets a precedent for the legal recognition of digital currencies in China, which has been cracking down on cryptocurrency trading and mining in recent years. While China does not allow its citizens to use digital currencies as legal tender, it does not prohibit them from owning or using them as virtual property. The ruling also shows that China is willing to embrace innovation and technology in the digital economy, as it is developing its own central bank digital currency (CBDC), which is expected to launch soon.

The implications of this ruling are far-reaching, as it could open up new possibilities and challenges for the development and regulation of digital currencies in China and beyond. It could also inspire more people to explore the potential and benefits of digital currencies, as well as the risks and responsibilities involved. As digital currencies become more mainstream and widely accepted, they could transform the way we exchange value and interact with each other in the digital age.

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