How Crypto Miners Can Fund Their Operations Without Liquidating Their Assets
he advent of Bitcoin in January 2009 marked the beginning of a new era of finance. It set the world moving toward a more secure, decentralized, and people-centric financial system — one where people are in full control of there funds. And no financial oligarch or government sat at the center of this financial system to control the flow of funds or approve or monitor transactions.
As Bitcoin cut out the necessity of a central entity facilitate the transactions, it needed a system that could aid the flow of funds between people and businesses. For that, the Bitcoin network relies on a computer algorithm called the proof-of-work (PoW). PoW is a decentralized blockchain protocol that creates a cryptographic puzzle to prove the authenticity of each transaction.
We depend on random guessing to solve these extremely complex puzzles and find the correct solution, which is an alphanumeric phrase called the hash.
To guess the right hash, we need high levels of computing power so we can run through as many random phrases per second as possible to find the solution at the earliest. Cryptocurrency miners or nodes on a PoW-based blockchain network handle this.
What Crypto Miners Do?
Cryptocurrency miners use high computing power GPUs and application-specific integrated circuit (ASIC) miners to solve these puzzles and approve the transactions on the network.
There are thousands of miners running these random hashes and competing against each other to be the first to find the solution. Once a miner finds the correct solution, they share the hash with all the nodes on the network who then approve the solution and add the transaction on the blockchain.
In return for solving the puzzle, the network rewards the winning miner in Bitcoins.
The whole mining process is an expensive affair and it can take thousands of dollars worth of equipments and electricity every month to turn the whole operation profitable. To afford it, the miners often liquidate a considerable portion of the earned Bitcoin to pay for the mining equipments and electricity.
However, if miners could afford loans to run the operations instead of instantly liquidating their assets, they can very well make better profits from the earned cryptocurrencies.
Let’s see how Hybrid Bank can help miners do that.
Hybrid Bank: Instant Loans for Miners
Miners make great profits in Bitcoin and other cryptocurrencies. But to keep their operations profitable, they need to consistently invest huge sums to buy new equipment and pay for electricity.
To help miners afford that without liquidating their cryptocurrency funds, Hybrid Bank provides flexible loan options on its platform. They can opt for the loans instantly by fixing a collateral amount without having to liquidate their assets.
Hybrid Bank also provides credit ratings for companies dealing in digital assets, such as cryptocurrency mining firms. This will allow such companies to present their creditworthiness of traditional financial institutions and opt for loans at lower rates of interest.
