how does it work?
who is this for?
bitcoin Miners
Miners can hedge their hashrate and make money even if they do not mine the next block. Miners can bet against their own pool or bet on dominant pools like Foundry or AntPool.
bitcoin Speculators
Speculators can bet whenever there are favorable odds in the market. Favorable odds occur whenever the market odds (bets) differ from the actual event probabilities (which corresponds to % of total hashrate of the pool).
Why should people bet?
Miners can reduce cashflow volatility caused by block reward variance. Betting on dominant pools mitigates risk, especially for solo miners and small pools with low hashrate.
Speculators can make money by betting when the market odds are favorable. As long as the market odds differ from the event probabilities, there exist profitable betting opportunities.
why now?
Mining pools have become critically centralized due to variance based pooling pressure.
Variance is inherent to the probabilistic nature of mining and cannot be eliminated. Aggregating hashrate into pools is currently the only way that miners can reduce variance. However, pool centralization poses the biggest censorship threat to the Bitcoin network.
Betting markets enable hashrate hedging, empowering miners to join smaller pools with higher variance. Providing liquidity to the market by betting can be profitable and help catalyze mining pool decentralization.
PIONEER THE FUTURE OF MINING FINANCE
Bitcoin mining is a provably probabilistic computational lottery, and miners and pools have been the only ones directly exposed to the variance of the rewards thus far.
Betting in Bitcoin Prediction Market now enables anybody to profit from the entropy of the Bitcoin network. Providing liquidity to the market enables speculators to profit and enables miners to de-risk variance.
