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How Miners Can Hedge Their Inventory to Increase Return on Investment

imageCryptocurrency17 hours ago (Aug 09, 2020 09:00PM ET)

How Miners Can Hedge Their Inventory to Increase Return on Investment

To a newcomer, crypto mining may sound deceptively easy — essentially, a way to switch on a machine, walk away and watch the lucrative crypto rewards roll in. But the reality is a little more complicated.

The oldest and most powerful crypto out there, Bitcoin (BTC), uses a proof-of-work algorithm to ensure it’s blockchain’s security, and plenty of other influential cryptos have followed suit. Miners in PoW protocols receive a crypto reward whenever they’re the first to submit a correct answer to the cryptographic math problem that seals each new block of data on the blockchain. The more miners there are operating on one blockchain network, the stiffer the competition becomes to solve this problem and win a crypto reward.

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How Miners Can Hedge Their Inventory to Increase Return on Investment

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