James Pierog's avatar
James Pierog 1 year ago
Hedging hashrate reduces Bitcoin  mining pool block reward variance. This chart shows the expected earnings of a pool if they bet against themselves every block for one difficulty epoch. By hedging hashrate every block, pools reduce 2 standard deviations of risk to less than 1. image

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James Pierog's avatar
James Pierog 1 year ago
If the pool has 15% of global hashrate then hedging is still a good idea. By hedging miners and pools can eliminate payout swings due to pure randomness. Making money most of the time reduces the risk of not making money sometimes! image