FTX Launches Bitcoin Hashrate Futures
- Three such contracts are now up for trading on the derivatives exchange.
FTX, a Binance-backed crypto derivatives platform, is now offering futures contracts for Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Hash Rate Hash Rate A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain Read this Term, enabling miners to hedge on the mining difficulty.
The launch came nine months after the derivatives exchange first floated the idea of launching such a futures contract tracking the mining hashrate.
Announced on Friday, these contracts, upon expiry, will settle on the “average” BTC mining difficulty over a period of time.
“Each Hashrate Future has an expiration start and end time. The start at the beginning of a quarter and end at the end of the quarter,” FTX explained.
Unlike the futures contracts of any assets and commodities, determining Bitcoin mining hashrate is difficult.
“It's impossible to exactly measure hashrate--the best you can do is approximate it from block times and difficulty,” the derivatives platform stated. “However, given that difficulty adjustments attempt to maintain 10m block times, over long periods of time the average hashrate will be proportional to the average difficulty. So that means that, roughly speaking, difficulty futures should behave similarly to hashrate futures.”
The exchange has already listed three such contracts - the first will expire on Q3 2020, while the other two will expire on Q4 2020 and Q1 2021 respectively.
With the recent halving of Bitcoin mining rewards, the mining hashrate is hovering around its peak and the mining difficulty has also seen a record high. Given this uncertainty, there is also a demand among the miners to hedge on their business to minimize risks.
Going beyond crypto
Launched last year, FTX has become one of the well-known crypto derivatives exchanges with its perpetual contracts. It also raised $8 million last year and is backed by giants like Binance, Consensus Lab, and Proof-of-Capital.
FTX also recently introduced a futures contract based on the oil prices as the futures prices for Western Texas Intermediate (WTI) index went negative last month.
FTX, a Binance-backed crypto derivatives platform, is now offering futures contracts for Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term Hash Rate Hash Rate A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain Read this Term, enabling miners to hedge on the mining difficulty.
The launch came nine months after the derivatives exchange first floated the idea of launching such a futures contract tracking the mining hashrate.
Announced on Friday, these contracts, upon expiry, will settle on the “average” BTC mining difficulty over a period of time.
“Each Hashrate Future has an expiration start and end time. The start at the beginning of a quarter and end at the end of the quarter,” FTX explained.
Unlike the futures contracts of any assets and commodities, determining Bitcoin mining hashrate is difficult.
“It's impossible to exactly measure hashrate--the best you can do is approximate it from block times and difficulty,” the derivatives platform stated. “However, given that difficulty adjustments attempt to maintain 10m block times, over long periods of time the average hashrate will be proportional to the average difficulty. So that means that, roughly speaking, difficulty futures should behave similarly to hashrate futures.”
The exchange has already listed three such contracts - the first will expire on Q3 2020, while the other two will expire on Q4 2020 and Q1 2021 respectively.
With the recent halving of Bitcoin mining rewards, the mining hashrate is hovering around its peak and the mining difficulty has also seen a record high. Given this uncertainty, there is also a demand among the miners to hedge on their business to minimize risks.
Going beyond crypto
Launched last year, FTX has become one of the well-known crypto derivatives exchanges with its perpetual contracts. It also raised $8 million last year and is backed by giants like Binance, Consensus Lab, and Proof-of-Capital.
FTX also recently introduced a futures contract based on the oil prices as the futures prices for Western Texas Intermediate (WTI) index went negative last month.