Market study

- Study of the centralized paradigms

Already some big mining corporates started to raise fund through pre-sale of their **hashrate **in the framework of a token economy system. For instance, Blockstream, one of the biggest and pioneering company in Bitcoin mining, And has launched BMN token, Blockstream Mining Notes, to allow individuals and institutions participate in mining through renting hashrates or investing in the BMN token. This is the way to expand Bitcoin mining exposure to more investors and institutions. Moreover, the Blockstream itself can also benefit from this raise-fund and spend the fund in developing more and more facilities in their suitable locations. Therefore, it's a win-win cooperation or co-investment between miners side (Blokstream) and investors side (institutions or big individual investors).

Normally, Bitcoin mining involves high-risk investments in specialized hardware and facilities. Actually, the BMN token can lower the barriers to entry for qualified investors, providing exposure to Bitcoin mining through a simple token purchase. (BMN website)

1.00 BMN token entitles the holder to BTC mined by up to 2,000 TH/s of hashrate. BTC mined by the BMN is secured in cold storage and delivered upon a contract of three-year term. They succeeded to raise fund of 4 million $.

Setting up a Bitcoin mine is no easy task. Aspiring miners face many challenges, including gaining access to low-cost energy sources, building specialized facilities, procuring ASICs, and ongoing maintenance.

In the above example, Blockstream Mining eliminated many of these challenges by providing a Bitcoin mining colocation service (based on Token economy) that helps many institutions get their Bitcoin mines online without hassle of entering into technical issues! Although this is a useful solution and an step forward, it lacks several important features.

What is the defect of Blockstream solution?

1- Not any invetsor can participate to buy hashrate contracts since the minimum threshold is 200k$.

2- The total economy system of BMN is governed by Blockstream so it's centralized and it means invetsors should have trust in Blockstream.

3- Not all miners can participate in this token hashrate rental service since it's administered and managed by Blockstream facilities.

4- It needs investors to verify their identity and perform KYC

5- Blockstream as the manager of this ecosystem needs to promote their services and facilities to demonstrate their reputation to attract more investors

6- This token ecosystem is not worldwide cannot onboard many other miners around the globe to feed more hashrates and benefits from the raised funds. (closed source system)