Connect with us

Uncategorized

Luxor’s Aaron Forster on Bitcoin Mining’s Growing Sophistication

Published

on

Luxor Technology wants to make bitcoin mining easier. That’s why the firm has rolled out a panoply of products (mining pools, hashrate derivatives, data analytics, ASIC brokerage) to help bitcoin miners, large and small, develop their operations.

Aaron Forster, the company’s director of business development, joined in October 2021, and has seen the team grow from roughly 15 to 85 people in the span of three and a half years.

Forster worked a decade in the Canadian energy sector before coming to bitcoin mining, which is one of the reasons why he’ll be speaking about the future of mining in Canada and the U.S. at the BTC & Mining Summit at Consensus this year, May 14-15.

In the lead-up to the event, Forster shared with CoinDesk his thoughts on bitcoin miners turning to artificial intelligence, the growing sophistication of the mining industry, and how Luxor’s products enable miners to hedge various forms of risk.

This interview has been condensed and edited for clarity.

Mining pools allow miners to combine their computational resources to have higher chances of receiving bitcoin block rewards. Can you explain to us how Luxor’s mining pools work?

Aaron Forster: Mining pools are basically aggregators that reduce the variance of solo mining. When you look at solo mining, it’s very lottery-esque, meaning that you could be plugging your machines in and you might hit block rewards tomorrow — or you might hit it 100 years from now. But you’re still paying for energy during that time. At a small scale, it’s not a big deal, as you scale that up and create a business around it.

The most common kind of mining pool is PPLNS, which means Pay-Per-Last-N-Shares. Basically, that means the miner does not get paid unless that mining pool hits the block. That’s also due to luck variance, so it’s no different from that solo miner’s situation. However, that creates revenue volatility for those large industrial miners.

So we’re seeing the emergence of what we call Full-Pay-Per-Share, or FPPS, and that’s Luxor is operating for our bitcoin pool. With FPPS, regardless of whether we find a block or not, we’re still paying our miners their revenue based on the number of shares they’ve submitted to the pool. That gives revenue certainty to miners, assuming hashprice stays the same. We’ve effectively become an insurance provider.

The problem is that you need a very deep and strong balance sheet to support that model, because while we’ve reduced the variance for miners, that risk is now put on us. So we need to plan for that. But it can be calculated over a long enough period of time. We have different partners in that regard, so that we don’t bear the full risk from our balance sheet.

Tell me about your ASIC brokerage business.

We’ve become one of the leading hardware suppliers on the secondary market. Primarily within North America, but we’ve shipped to 35+ countries. We deal with everybody from public companies to private companies, institutions to retail.

We’re primarily a broker, meaning we match buyer and seller, mostly on the secondary market. Sometimes we do interact with ASIC manufacturers, and in certain cases we do take principal positions, meaning we use money from our balance sheet to purchase ASICs and then resell them on the secondary market. But the majority of our volume comes from matching buyers and sellers.

Luxor also launched the first hashrate futures contracts.

We’re trying to push the Bitcoin mining space forward. We’re a hashrate marketplace, depending on how you look at our mining pools, and we wanted to take a big leap and take hashrate to the TradFi world.

We wanted to create a tool that allows investors to take a position on hashprice without effectively owning mining equipment. Hashprice is, you know, the hourly or daily revenue that miners get, and that fluctuates a lot. For some people it’s about hedging, for others it’s speculation. We’re creating a tool for miners to sell their hashrate forward and use it as a basic collateral or a way to finance growth.

We said, ‘Let’s allow miners to basically sell forward hashrate, receive bitcoin upfront, and then they can take that and do whatever they need to do with it, whether it’s purchase ASICs or expand their mining operations.’ It’s basically the collateralization of hashrate. So they’re obligated to send us X amount of hashrate per month for the length of the contract. Before that, they’ll receive a certain amount of bitcoin upfront.

There’s a market imbalance between buyers and sellers. We have a lot of buyers, meaning people and institutions wanting to earn yield on their bitcoin. What you’re lending your bitcoin at is effectively your interest rate. However, you could also look at it like you’re purchasing that hashrate at a discount. That’s important for institutions or folks that don’t want physical exposure to bitcoin mining, but want exposure to hash price or hashrate. They can do that synthetically through purchasing bitcoin and putting it into our market, effectively lending that out, earning a yield, and purchasing that hashrate at a discount.

What do you find most exciting about bitcoin mining at the moment?

The acceptance and natural progression of our industry into other markets. We can’t ignore the AI HPC transition. Instead of building these mega mines that are just massive buildings with power-dense bitcoin mining operations, you’re starting to see large miners turning into power infrastructure providers for artificial intelligence.

Using bitcoin mining as a stepping stone to a larger, more capital intensive industry like AI is exciting to me, because it kind of gives us a bit more acceptance, because we’re coming at it from a completely different angle. I think the biggest example is the Core Scientific-CoreWeave deal structure, how they’ve kind of merged those two businesses together. They’re complimentary to each other. And that’s really exciting.

When you look at our own product roadmap, we have no choice but to follow a similar roadmap to bitcoin miners. A lot of the products that we built for the mining industry are analogous to what is needed at a different level for AI. Mind you, it’s a lot simpler in our industry than in AI. We’re our first step into the HPC space, and it’s still very early days there.

Continue Reading
Click to comment

Leave a Reply

Ваш адрес email не будет опубликован. Обязательные поля помечены *

Uncategorized

Nasdaq Composite Saw One of Its Worst Days Since 2000 While Bitcoin Held Steady

Published

on

By

The U.S. stock-market slide prompted by President Donald Trump’s global tariff announcement on Wednesday sent the Nasdaq Composite Index into one of its biggest funks since the start of the century.

The tech-heavy index lost 5.5% on Thursday, just outside the top 20 worst single-day drawdowns since 2000, according to Investing.com. Most of the largest drawdowns occurred during the dot-com crash of 2000-2001 and the 2008 global financial crisis. Other equity measures also suffered, with the S&P 500 index falling almost 5%.

In contrast, the bitcoin (BTC) price, which is typically correlated with U.S. equities over short timeframes, bucked the trend. The largest cryptocurrency, which tumbled immediately after the announcement while stock markets were closed, rose 0.7% the following day, with momentum carrying into Friday, according to Glassnode data.

Bitcoin is now trading above $84,000 compared with about $87,000 before Trump started speaking. Nasdaq futures, meanwhile, are lower ahead of the U.S. jobs report due later in the day.

Bitcoin made its 2025 low in mid-March at around $76,000, whereas the Nasdaq hit a low on Thursday. Year-to-date, bitcoin is outperforming the Nasdaq, losing 10% against the index’s 11%.

Analyst Caleb Franzen highlighted bitcoin’s relative strength compared with the S&P 500 in this risk-off environment, noting its resilience around the 200-day moving average.

«It’s pretty remarkable to see that bitcoin is up +3.4% today relative to the S&P 500, particularly in a risk-off environment. As I’ve recently pointed out, BTC/SPY continues to hold above its 200-day moving average cloud,» Franzen said in a post on X.

Continue Reading

Uncategorized

March Jobs Report a ‘Heads I Win, Tails You Lose’ Moment for Bitcoin Bulls

Published

on

By

As the pivotal U.S. nonfarm payrolls (NFP) report for March approaches, bitcoin (BTC) bulls find themselves in a situation reminiscent of the character Two-Face (Harvey Dent) from the movie «The Dark Knight,» who flips coins to make decisions, confident of controlling the fate irrespective of the outcome.

It’s a classic case of «heads I win, tails you lose,» which means that bitcoin bulls will likely come out on top after the impending jobs report, regardless of whether the data reveals labor market strength or weakness.

This situation arises from President Donald Trump’s Wednesday announcement of sweeping tariffs affecting 180 nations, prompting forward-looking markets to price in recession risks and expectations of Federal Reserve rate cuts.

Consequently, stronger-than-expected jobs data, which typically strengthens the dollar and pressures risk assets like BTC, may be dismissed as outdated, overlooking the recent developments resulting from Trump’s policies. Therefore, any dip in BTC following a potentially hot NFP report could be swiftly reversed, leading to gains.

On the other hand, weak data would only add to recession fears and bolster Fed rate cut bets, supporting increased risk-taking in financial markets.

At press time, bitcoin changed hands at $84,190, having hit lows below $82,000 Thursday, per CoinDesk data. The fact that prices have stayed well above the $77,000 March low despite peak tariff uncertainty indicates seller fatigue and potential for a price rise.

Volmex’s bitcoin one-day implied volatility index stood at an annualized 65%, indicating an expected price swing of 3.4% in the next 24 hours.

The jobs data is due at 12:30 UTC. According to FactSet, the median estimate for total nonfarm payroll employment in March is 130,000, down from February’s 151,000 tally. The jobless rate is forecast to have risen to 4.2% from 4.1%.

Ahead of the data release, rates traders are pricing 100 basis points of Fed rate cuts this year, with the first move expected to happen in June, according to the CME’s FedWatch tool.

Continue Reading

Uncategorized

Solana’s SOL Could See Nearly 6% Price Swing as Whales Dump Coins Before U.S. Jobs Data

Published

on

By

Solana’s SOL token is poised for a potential price swing of almost 6% after some large investors, or whales, dumped their holdings ahead of the U.S. non-farm payroll (NFP) report due later Friday.

This estimate comes from Volmex’s one-day implied volatility index (IV) for SOL. At press time, the index showed a one-day reading annualized at 109.70%, indicating an expected 24-hour price volatility of 5.74%. (The daily figure is derived by dividing the annualized volatility by the square root of 365, the number of trading days in a year.)

A movement that size represents moderate volatility, especially considering that the cryptocurrency has experienced several days of 6% or higher volatility since early March, according to data from CoinDesk.

In other words, the market is likely to be volatile, but nothing out of the ordinary.

Whale selling

Data tracked by blockchain sleuth Lookonchain shows several whales unstaked and dumped SOL worth $46.3 million into the market.

Large offloading of coins by whales often leads to bearish price action. However, the amount sold early today equates to 0.97% of the cryptocurrency’s 24-hour trading volume of $4.7 billion.

So, it’s no surprise that SOL is trading little changed at around $116, having printed a low of $112 on Thursday. Broadly speaking, the cryptocurrency has been in a downtrend since reaching a high of $295 on Jan. 19.

Focus on payrolls

The U.S. jobs data, scheduled for release at 12:30 GMT, is forecast to reveal that the economy added 130,000 jobs in March, slowdown from February’s 151,000 and well below the 12-month average of 162,300, according to FactSet.

The median estimate for the jobless rate for March is is 4.2%, the highest since November and up from February’s 4.1% reading. Average hourly earnings are forecast to have risen 0.3% month-on-month, matching February’s pace.

A weaker-than-expected figure will likely validate renewed pricing for four 25-basis-point interest-rate cuts this year, potentially sending risk assets, including cryptocurrencies, higher.

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.