The Metaverse Podcast - Commodifying Hashpower, with Ryan Condron of Lumerin Protocol
Primer: Ryan Condron is the CEO at Titan Industries, a next-gen mining pool, and the creator of Lumerin Protocol, a peer-to-peer data stream routing protocol. In this episode of The Metaverse Podcast, he shares how both projects synergize with one another and become more than the sum of their parts.
Background
CEO at Titan Industries
A next-gen efficient, transparent mining pool
Provides software for monitoring, managing, and optimizing mining operations at any scale
Creator of Lumerin Protocol
A peer-to-peer protocol that enables data stream routing based on smart contract rules
History Of Bitcoin Mining
Got involved in mining in 2012 as a hobby
Over the past ~7 years, mining is moving from mining as an industry to mining as core infrastructure
As Bitcoin continues to scale, more institutions and governments have started to get involved
"People are realizing that it [mining] is core infrastructure for the future of not only currency, identity, data security, Web3, and of course, the Metaverse." - Ryan Condron
The "Proof-of-Work Is Bad" Debate
When people start with such a question, they have already made multiple assumptions
When we unravel the logic behind these assumptions, we will realize that there's a lot of fallacies that they are founded on
One of the first fallacies he encountered was that people don't actually understand how an electricity grid works or how electricity works
For electricity generation, load always has to equal production — you can't produce electricity unless there's someone actively using the electricity
When demand for electricity goes up, they have to increase production
When demand for electricity goes down, they have to decrease production
When too much/too little electricity is produced, the frequency at which electricity is transmitted is changed, damaging the power grid
If we were to move to renewables, we can no longer do load following, but production following
In production following, we have to provide electricity 100% of the time for the max amount of load
Have to ramp up/down the Proof-of-Work mining to counteract the renewables grid
Shift In Hash Rate From China To Elsewhere
Fascinated by what El Salvador is doing by mining Bitcoin using a volcano. Thinks that countries that have embraced crypto early on will end up becoming very wealthy
The El Salvador example highlights the concept of stranded energy
In Iceland, geothermic energy can be used for mining or data centre type of operations
When the China crackdown on mining happened, Bitcoin's hash rate fell in half. Realized the amount of Hash Rate that China actually had
"It is absolutely fascinating that what we've done with Bitcoin mining is we've essentially put a trillion dollar bounty on finding cheap energy. And so you have people inventing new ways of producing energy, you have people finding all this stranded energy all over the globe." - Ryan Condron
In China, the electricity used in Bitcoin mining comes from hydroelectricity and coal. Hence, there is heavy carbon production
As hash rate flows out of China, the assumption is that there will be a better environmental outcome
Personally knows a lot of miners have landed in Texas, where there is cheap electricity and facilities using renewable sources of energy
Centralization Of Hash Power
💡 There's a narrative where people are concerned that there could be too much hash power in China such that the Chinese government could capture Bitcoin if it wanted to. After China's crackdown on Bitcoin mining, this narrative is less of a concern.
As early as 2013, China has made edicts against different aspects of crypto
He thinks that the centralization of mining pools and how much hash rate they have is more of a growing concern than the geolocation of the miners themselves
The top 3 pools control the majority of the Bitcoin hash rate. They essentially can collude to adopt/block BIPs or to whitelist/blacklist addresses
Realized early on that we are not going to be able to keep the actual physical mining devices decentralized
Created the Lumerin Protocol to decentralize the control of hash rate by decoupling where the hash rate is created from where the hash rate is controlled
For example, a large facility could run several 100,00 mining devices all pointed towards a single mining pool
Lumerin's vision is to own such a facility where they put the devices up for sale in an open market. Anyone can purchase the control of those devices through a decentralized network and point those devices at any mining pool. Thus, removing centralized control from the top pools
Why Would A Facility Want To Tokenize Their Hash Power?
Large-scale miners would want to tokenize their hash power/put it for sale to hedge their risk
In a bull market, they could create a futures market for hash rate. Future hash rate could be sold for a guaranteed price to capture liquidity for the miner and to transfer risk to someone else who would like to take that risk
Another reason is that miners are profit-driven. They would want to sell their hash rate for a premium to institutions who would like to purchase them to mine transactions
Eventually, people would start treating hash power as a commodity
Lumerin Protocol
💡 Lumerin is a peer-to-peer protocol solution that enables data stream routing based on smart contract rules. Initially, they will be introducing a P2P decentralized hash power commodity marketplace.
Two months away from launching stage 1 of the Lumerin Protocol
The initial launch will be on Ethereum
The public token sale will be held on Tokensoft next week
Shortly after, users will be able to put up their hash power for sale. Buyers can purchase the hash rate with a Web3 wallet like MetaMask
Once they purchased the hash rate, the holder can point it to their own pool or endpoint to collect it
Subsequently, they plan to launch their own chain so as to control gas costs and transaction throughput
Lumerin will be using a Merge Mine Network with Bitcoin
💡 Merge Mining refers to the act of mining two or more cryptocurrencies at the same time. It re-utilizes proof-of-work from one blockchain to secure another.
To have a merged mine network, you need to have pools that are willing to produce Bitcoin blocks to actually anchor your network
This is how Titan Industries come into play. Titan is working with large miners and they will be presenting Lumerin to them to get them as their initial backers and to secure their network by merge mining with their Bitcoin pools
How Does It Work?
A smart contract lays out the terms and a data link between the buyer and seller is established
Team is starting with hash power. It does not have to stop there. Lumerin Protocol could be used to stream videos, audios, compute power, and any type of digital commodity
Lumerin could be used to broker Voice over Internet Protocol (VoIP) calls through a smart contract
"Which means now, rather than having phone numbers, when Lumerin is at scale, we can actually broker communication between two individuals through a decentralized network. And you want to talk Metaverse, you want to talk like blowing people's minds of what you can do with stuff like that. You know, that's when we start getting excited." - Ryan Condron
Lumerin In The Context Of The Metaverse
Can be used to broker communications based on rules in a smart contract
For example, our phone numbers have become part of our identity, but we don't actually own that phone number. Our phone number is actually linked to a SIM card
There have been SIM Swap attacks where people got their accounts broken into or crypto stolen because someone else stole their phone number
In the future, Lumerin could broker communications by allowing users to issue a NFT that defines the rules around communication between different parties. There is no need to provide an email address or a phone number for communication
In the context of the Metaverse, people can open a socket from their Lumerin node to another person's Lumerin node for communication
"With something like Lumerin, and using smart contracts, and decentralized identity, we actually take that back, we actually can build an entire communication ecosystem, and define the control of who can access me, when they can access me, according to my rules. And it's all through my own digital identity." - Ryan Condron
How Can Listeners Get Involved?
To get involved on the Mining Pool side, listeners can find their whitepaper and docs at https://titan.io/
To get involved with Lumerin, check out https://lumerin.io/
All information presented above is for educational purposes only and should not be taken as investment advice. Summaries are prepared by The Reading Ape. While reasonable efforts are made to provide accurate content, any errors in interpreting and summarizing the source material are ours alone. We disclaim any liability associated with the use of our content.