Hedging hashrate enables miners and pools to reduce their variance while maintaining ownership over their hashrate and block templates.
Currently the only mechanism to reduce variance is hashrate aggregation into pools. Variance based pooling pressure incentivises mining pool centralization.
Hedging hashrate enables a sustainable decentralization of hashrate. The DLCs can be structured to incentivise pools to maintain lower global hashrate because a smaller probability pool yields a higher variance reduction.
BitcoinAlchemist / James Pierog
npub1u8…xjcky
2024-09-16 13:11:19
Author Public Key
npub1u8r69esh5r7jt29nj9ufmz4yvuwp6cwl5xqp4e3d46vl8wla5smsexjckyPublished at
2024-09-16 13:11:19Event JSON
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"content": "Hedging hashrate enables miners and pools to reduce their variance while maintaining ownership over their hashrate and block templates.\n\nCurrently the only mechanism to reduce variance is hashrate aggregation into pools. Variance based pooling pressure incentivises mining pool centralization.\n\nHedging hashrate enables a sustainable decentralization of hashrate. The DLCs can be structured to incentivise pools to maintain lower global hashrate because a smaller probability pool yields a higher variance reduction.",
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