One of the main challenges for Bitcoin miners is the volatility of mining difficulty and revenue. Mining difficulty is a measure of how hard it is to find a valid block on the Bitcoin network, and it adjusts every 2016 blocks (about two weeks) based on the total network hashrate.
When the difficulty increases, miners need more computing power and electricity to mine the same amount of bitcoins, which reduces their profit margin. Conversely, when the difficulty decreases, miners can mine more bitcoins with fewer resources, which increases their revenue.
To hedge against this uncertainty and access immediate liquidity, some Bitcoin miners are turning to innovative financial solutions that allow them to sell exposure to their future revenues at a discount. One such solution is Block Green, a Switzerland-based Bitcoin liquidity protocol that connects digital asset holders with sustainable mining operations in need of financing.
Block Green leverages Bitcoin script and custodial solutions to facilitate mining rewards streaming agreements, which are smart contracts that enable miners to stream a portion of their future mining rewards to investors in exchange for an upfront payment in bitcoins. This way, miners can receive cash flow in advance and hedge against mining difficulty fluctuations, while investors can enjoy an attractive bitcoin-denominated return.
The Block Green Partnership Will Help Miners Navigate Crypto Storms
Block Green’s platform also aims to contribute to the green transformation of the global Bitcoin mining industry by prioritizing renewable-powered mining operations. By providing liquidity and risk management tools to sustainable miners, Block Green hopes to incentivize the adoption of clean energy sources and reduce the environmental impact of Bitcoin mining.
One of the first public trades on Block Green’s platform was executed in collaboration with Merkle Standard, a US Bitcoin mining company that operates with 100% renewable energy. Merkle Standard sold exposure to 100 PH/s of hashrate over 30 days, receiving 7.5 BTC in immediate upfront liquidity.
This partnership demonstrates the potential of Block Green’s platform to create new market opportunities for Bitcoin holders and miners, as well as to support the transition to renewables in the Bitcoin mining industry.
