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09/14/2023
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1. This BTC mining project attracts users with new tokenomics and DeFi opportunities
Bitcoin mining is a tricky business. It requires expensive hardware equipment, cheap and stable electricity and a lot of maintenance to keep the facility in shape, like cooling systems and hardware updates.
These days, starting Bitcoin mining operations from scratch as an individual is not a good business plan. Many factors need to align perfectly, including geography, energy costs, regulation, weather and the Bitcoin price itself. Still, the upfront costs are too high for regular people.
Beginners can start mining by joining specialized mining pools. However, due diligence is needed because mining pools charge fees and split the rewards between participants. The problem with these pools is that they are centralized entities that may not always be transparent or expose participants to risks. For example, during the Crypto Winter of 2022, a mining pool operator halted Bitcoin withdrawals due to liquidity issues.
Bitcoin mining for beginners
Some Bitcoin mining services eliminate the entry barriers for beginners. One example is GoMining, which offers various features that give Bitcoin miners more control and opportunities.
By joining GoMining, users don’t have to buy and set up hardware or maintain the equipment. All processes are conducted online, while GoMining does all the behind-the-scenes work. The mining service has been around for over six years and currently has a power capacity of 350 megawatts across its nine data centers dispersed worldwide. This translates into a total hash rate of 2.1 million terahashes per second.
For more than two years, GoMining has been allowing individuals to access its mining data centers and paying out rewards, even during the crypto winter of 2022 and other bearish markets. Moreover, GoMining is a member of the Bitcoin Mining Council and has MMA legend Khabib Nurmagomedov as its ambassador.
New tokenomics ensure transparency
Recently, GoMining rebranded and introduced new tokenomics to simplify access to Bitcoin mining, while its native token changed its ticker from GMT to GOMINING to avoid confusion with other projects. The latest upgrade introduced the so-called liquid Bitcoin hash rate (LBH) protocol, which borrows from liquid staking platforms in decentralized finance (DeFi), such as Lido.
GoMining LBH tokens, which come in the form of NFTs, enable users to transparently and securely own hash rate. Holders of these tokens have to pay for electricity while receiving mining revenues, so they end up in a better financial position than traditional miners. On top of that, these LBH tokens can be used in DeFi for borrowing and lending purposes or trading on secondary markets.
With the new tokenomics model, LBH token holders can pay for electricity with GOMINING and benefit from a 10% discount. Also, the model uses a burn and mint mechanism, in which all tokens used to pay for the electricity expenses are burned algorithmically, while the system redistributes minted tokens for community rewards and to service providers, VeTokenomics stakers and the GoMining team.
The new tokenomics brings more transparency while ensuring the NFTs are directly linked to the data centers.
2. Crypto Community Torn on Huge Paxos Bitcoin Fee: Return It or Give to Miners?
On September 10, an unidentified entity paid a whopping fee of 19.89 BTC worth around $500,000 at the time to move just 0.008 BTC.
Paxos Fingered in Fat Finger Bitcoin Fee Mistake
The massive fee has sparked discussion among the crypto community. Furthermore, Paxos has been identified as the culprit for the huge fee. The transaction was initially thought to be linked to payments giant PayPal.
A company spokesperson confirmed this, “Paxos overpaid the Bitcoin network fee on September 10, 2023.”
The transaction has been labeled as a “fat finger” mistake, which is a human error caused by pressing the wrong key when using a computer to input data.
The big fee was “due to a bug on a single transfer, and it has been fixed,” according to Paxos. The firm added that it is in contact with the miner to recoup the funds.
On September 14, mining pool F2Pool co-founder Chun Wang said he regretted agreeing to the refund. His comments also referenced the confusion with the time zone. F2Pool processed the BTC transaction.
50/50 Split an Amicable Outcome
He added a poll asking the crypto community what he should do with the BTC. At the time of press, around 36% of the 1,400 respondents said it should be distributed to the miners. Around 29% said that it should be refunded to Paxos.
Cosmos developer “chjango.cosmos,” said 50/50 seems reasonable. They added that 50% should go to the network miners who would have gotten it otherwise.
3. Senator Ted Cruz: Bitcoin Mining Is Benefitting The Grid And The U.S. Economy
“What makes Texas different than the rest of the world is that Texans love freedom, and so do digital asset bulls,” Texas Senator Ted Cruz said in our interview about the growing role of bitcoin in the Texas economy.
He said that he was especially bullish on bitcoin because it enhances freedom by being uncontrollable. Cruz believes this is the characteristic which has triggered governmental resistance, referencing China’s bitcoin ban as an example. Bitcoin’s uncontrollability is achieved through the way the network is secured.
The Bitcoin network is secured through proof-of-work where a geographically distributed network of computers expend energy in order to solve a cryptographic puzzle. This method was intended to serve as a fair issuance mechanism. As an open-source software and network, anybody is free to opt into the network and contribute their computing power.
In return for contributing computational power to the network, these computers are rewarded with the newly issued bitcoin, as well as the transaction fees for propagating confirmed transactions across the network.
While some may criticize the amount of electricity consumed, the Bitcoin network has unique attributes which are providing some positive externalities in the energy sector.
Grid Balancing And Demand Response
“Texas is a hub for jobs, innovation, and freedom, and those things make it the natural oasis for the digital asset industry worldwide,” Cruz said in our interview, alluding to the drastic growth of bitcoin mining in his state due to inexpensive and abundant electricity.
Cruz spoke to the positive benefits bitcoin mining is having on the Texas grid this week on Fox News Radio. Cruz said that bitcoin mining can operate like a battery, describing bitcoin miner’s role in demand response programs.
Bitcoin miners are able to monetize the excess capacity that would go to waste on an average day, but that capacity can be curtailed in seconds, releasing the energy back to the grid when needed.
“It’s essentially an emergency reservoir of power. I think that’s one of the tools we can utilize to enhance resiliency in the grid,” Cruz concluded in the Fox interview.
The emergency reservoir was on full display this August as Riot, a large bitcoin mining company in Texas, curtailed 95% of their power consumption in order to release power back to the grid during a recent heatwave.
Bitcoin miner electricity consumption allows for an economically viable way to keep excess capacity on line that may only be needed occasionally throughout the year.
