Luxor -Technology wants to make Bitcoin -mining easier. That’s why the company has rolled a panot of products (mining, hashrate derivatives, data analysis, ASIC broker) to help Bitcoin mine workers, big and small, develop their operations.

Aaron Foster, the company’s director of business development, ended in October 2021 and has seen the team grow from approx. 15 to 85 people during three and a half years.

Foster worked for a decade in the Canadian energy sector before coming to Bitcoin Mining, which is one of the reasons he will talk about the mining’s future in Canada and the US at BTC & Mining Summit on consensus this year, 14-15. May.

In the construction of the event, Foster shared with Coindesk his thoughts on Bitcoin my workers turning to artificial intelligence, the growing sophistication of the mining sector, and how Luxor’s products allow miners to uncover different types of risk.

This interview is condensed and edited for clarity.

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

Aaron Foster: Mining is basically aggregators that reduce the variation in solo mining. When you look at solo mining, it is a lot of lottery-sque, which means you can connect your machines and you can hit block pay in the morning or you can hit it 100 years from now. But you still pay for energy during that time. On a small scale, it’s not a big deal when you scale up and create a business around it.

There is a kind of mining pool called PPLNs, which means payment-pr.-load-n-Shares. Basically, this means that the miner is not paid unless this mining pool hits the block. It’s also due to luck variance, so it’s no different from the situation of the solo mining. However, it creates the turnover valley for the large industrial miners.

So we see the emergence of what we call full payment per. Stock or FPPs and it’s Luxor works for our Bitcoin pool. With FPPs, whether we find a block or not, we still pay our miners their income based on the number of shares they have sent to the pool. It provides miners revenue security assuming hashprice remains the same. We have effectively become an insurance provider.

The problem is that you need a very deep and strong balance to support this model, because even though we have reduced the variance of miners, this risk is now set on us. So we have to plan it. But it can be calculated over a long enough period. We have different partners in that regard so that we do not carry the full risk of our balance.

Tell me about your ASIC brokerage.

We have become one of the leading hardware suppliers in the secondary market. Primarily in North America, but we have sent to 35+ countries. We deal with everyone from public companies to private companies, institutions for retail.

We are primarily a broker, which means we match the buyer and sell, mostly in the secondary market. Sometimes we interact with ASIC producers, and in some cases we take main positions, which means we spend money from our balance to buy ASICs and then resell them in the secondary market. But most of our volume comes from matching buyers and sellers.

Luxor also launched the first hashrate futures contracts.

We try to push the Bitcoin mining forward. We are a hashrate market space, depending on how you look at our mining pools and we wanted to take a big jump and take hashrate to the Tradfi world.

We wanted to create a tool that allows investors to take a position on hashish without effectively owning mining equipment. Hashprice is, you know, the hour or daily income that miners get and it fluctuates a lot. For some people it is about uncovering, for others it is speculation. We create a tool for miners to sell their hash rate forward and use it as a basic security or way to finance growth.

We said, ‘Let’s allow miners to basically sell out hashrate, receive Bitcoin in advance, and then they can take it and do what they need to do with it, whether it’s buying ASICs or expanding their mining.’ It is basically the collateral of hash rate. So they are obliged to send OS x amount of hash rate per day. Month for the length of the contract. Before it receives a certain amount of Bitcoin in advance.

There is an imbalance between the market between buyers and sellers. We have a lot of buyers, which means that people and institutions who want to earn benefits from their Bitcoin. What you borrow your Bitcoin is effective your interest rate. However, you can also look at it as if you are buying the hash rate with a discount. It is important for institutions or people who do not want physical exposure to Bitcoin mining, but wants exposure to hash price or hash rate. They can make it synthetic through the purchase of Bitcoin and put it on our market, effectively lend it, earn a dividend and buy it hash rate with a discount.

What do you think most exciting about Bitcoin Mining at the moment?

Acceptance and natural progression of our industry in other markets. We cannot ignore the AI ​​HPC transition. Instead of building these mega-mines that are just massive buildings with power-tight Bitcoin mining, you start seeing big miners turn into power infrastructure providers for artificial intelligence.

Using Bitcoin mining as a springboard for a larger, more capital -intensive industry like AI is exciting to me because it kind of gives us a little more acceptance because we come to it from a completely different angle. I think the biggest example is the central scientific-Coreweave-Deal structure, how they have merged these two companies together. They are free for each other. And it’s really exciting.

When you look at our own product schedule, we have no choice but to follow a similar roadmap to Bitcoin mining workers. Many of the products we built for the mining sector are analogous to what is needed at another level of AI. Remember, it’s much simpler in our industry than in AI. We are our first step into the HPC room and it is still very early days there.