Hashrate tokens represent a predetermined amount of computing power controlled by the token issuer. These tokens are created for investors who want indirect exposure to mining.
Unlike hashrate contracts sold by traditional cloud mining companies, hashrate tokens offer investors the ability to more easily buy and sell tokenized hashrate on secondary markets. Staking is also available for some hashrate tokens.
Similar to cloud computing contracts, hashrate token owners do not own any mining hardware. Instead, they own tokenized shares of a mining operation and receive payouts based on the amount of hashpower they purchase from the operation. The entity issuing the tokens is responsible for procuring, operating and maintaining mining machines to power the tokenized hashrate.
Mining activity behind a particular hashrate token will general specify two parameters for the asset prior to its launch:
- How much computing power backs each token represents (e.g., 1 TH/s);
- And the targeted efficiency of the miner’s hashing power (e.g., 40 J/TH).
Compass has not issued a hashrate token. Compass miners buy their own mining machines, which are then placed in a Compass verified facility of the customer’s choice.