Bitcoin Standard Hashrate Project Insight: Bringing Exchange-Grade Liquidity to Bitcoin Mining

The BTCST Project has succeeded in interfacing miners with traders by tokenizing mining hash rate. This has opened up the mining sector to broader community participation.

By
Ahamdi Abarikwu
on
March 13, 2021
Category:
Project Insight

Introduction

Bitcoin, like many cryptocurrencies, is generated by using specialized hardware to verify transactions. This is due to Bitcoin relying on a Proof of Work (POW) model. Miners who receive BTC for verifying transactions often find it challenging to convert their mining potential to liquidity readily. Offsetting the cost of mining equipment and breaking even to make a profit takes time. Miners are compelled to hold onto their mining gear for a long time, inadvertently exposing them to unfavorable fluctuations in the price of both Bitcoin and mining equipment.

The technicalities of mining and its high start-up costs often scare those who are interested in mining from doing so. Bitcoin mining thus seemed to be reserved for those who can afford the mining gear plus energy costs. It became controlled by a few making it difficult for many people to participate in mining Bitcoin.

Standard HashRate Group (SHG) address the issue of low liquidity and opens up mining to greater public participation. SHG is a consortium of experienced Bitcoin miners who created a crypto solution, the Bitcoin Standard HashRate Token (BTCST).

Bitcoin Standard HashRate Token

The Bitcoin Standard HashRate Token is a project deployed on the Binance Smart Chain. The protocol tokenizes standardized Bitcoin mining hash power into tradable BTCST tokens. These tokens provide ready liquidity to miners and make it possible for anyone to participate in Bitcoin mining. Users simply purchase BTCST tokens and stake them in required mining pools.

Each BTCST is pegged to 0.1 Terahash/second of BTC mining power. Holding 1 BTCST in the mining pool for one day entitles the holder to the net amount of Bitcoin mined by that hash power in the same period. Miners can also contribute their mining power to the pool and receive liquidity in the form of equivalent BTCST tokens.

Features of BTCST

1. It makes it easy for anyone to join or quit mining by simply staking/unstaking BTCST tokens.

2. It decentralizes BTC mining and shields participants from impermanent loss. When a user leaves the mining pool, the staked BTCST tokens are received and the accumulated Bitcoin mined by the equivalent hash power of the tokens.

3. BTCST provides exchange-grade liquidity by directly connecting miners to traders/the market.


How Does it Work?

First, there needs to be a mining pool for tokenization. Any miner that intends to commit its mining power to the pool expresses interest to the project's governance board. A detailed assessment of mining equipment is done to ensure they meet the project's set standards. Upon successful examination, the miner contractually transfers ownership of the mining equipment to the project and receives BTCST tokens in proportion to the contributed mining hash power.

All mining power is centrally pooled. A part of the mining rewards for each day is traded for the settlement of running costs, while the remainder is stored in the project's yield-farming dApp; distributed to the pool's participants.

For BTCST holders to take part in mining, they must stake their tokens in the dApp for at least one full day. Mined bitcoin can be withdrawn at any time. More details about the approval process for miners and rudiments for staking can be found here and here. Here is also a stepwise guide to staking BTCST on the DeFi dApp.

BTCST Tokenomics

The BTCST is the native utility token of the platform. It is a BEP-20 token with a maximum supply of 1.5 million tokens and a circulating supply of about 600 thousand tokens. When the project launched on the Binance Launchpad platform, 4% of the total supply was set aside for launchpool rewards, while 96% is for tokenization. Details of the market performance of BTCST can be seen here on its page on the market aggregator website, Coinmarketcap.

Future Plans

Currently, the project is enlarging its user base through a series of community-focused public relations activities. Extensive effort is being made to diversify the community's reach and onboard more miners as partners.

Last Words

Bitcoin mining used to be the exclusive preserve of a minority due to the cost and technicalities; it is no longer so. The BTCST Project has succeeded in interfacing miners with traders by tokenizing mining hash rate. This has opened up the mining sector to broader community participation.

Here are the project's media links for more information and project documentation.

Website

Whitepaper

Medium

Twitter

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Ahamdi Abarikwu

Ahamdi Abarikwu is an Electrical Engineer and a lover of anything crypto. He is also an avid writer, proofreader and editor. He loves to play Scrabble in his spare time.