For a long time now, Bitcoin mining has been extremely centralized as only a handful of miners have control over most of the hashing power. Crypto mining becomes centralized when single communities have total control over the rights for crypto hash power distribution. In such a situation, the process of mining becomes less efficient. One such case was when one coal mine flooded in Xinjiang and resulted in Bitcoin’s hash rate dropping by 35 percent.
Why is GMT the solution to the problem?
GMT stands as the primary solution to this concern, bringing together experts from the digital mining space with an abundance of knowledge and experience. Cognizant of how expensive mining can be, the team has developed a token tailored to making users’ mining journey a lot easier and simpler. You may have heard of the GMT Token, which is backed by computing power which is deployed to mine bitcoin. To manage the expansive infrastructure, developers have created a dedicated ecosystem that contains everything requisite for top-tier project execution within the crypto space.
According to unconfirmed reports, GMT Token is set to change things by introducing a whole new mining capacity. To do this, the project employs infrastructure from different players in the market and integrates them into the bitcoin mining market ecosystem.
What measures of protection against decentralization are included in the project?
As part of its efforts to solve the issue of centralization, GMT will offer Bitcoin miners a chance to bring in their own equipment to serve within the company’s data spots. In exchange, the company will offer these miners GMT tokens. The amount of GMT tokens a miner receives depends on the capacity of the infrastructure they provide.
Among these equipment include application specific integrated circuits (ASIC) miners. These are extremely powerful and once a particular ASIC has been introduced for mining a particular crypto, mining without them becomes unprofitable.
Traditionally (it really has already become a tradition for GMT holders) a portion of new GMT tokens gets burned. The remaining ones are distributed as circulating tokens. And the released power from the burned tokens is redistributed among all the tokens in circulation, thereby increasing the mining reward.
This is how GMT aims to solve the issue of centralization. Making them part of the token structure; the company makes GMT an infrastructure-based unit that links every player within the GMT mining ecosystem. We have reached out to GMT for comment on this, but they are yet to respond.
Why won’t the project lead to centralization even by controlling over 20% of the hashrate?
We can assume that GMT will put the third party equipment in the company’s many data centers located in various countries. When this happens, an increased number of equipment will run in a decentralized fashion (in different countries).
Additionally, owing to the fact that GMT is still not operational within the United States, increasing the number of big miners from different countries to be part of the project promotes decentralization. This has the potential to withdraw some of the hashing rate from the United States. GMT’s goal of accounting for 20 percent of Bitcoin mining in terms of global market share is one of the ways to achieve the desirable outcome of a reshuffled and reallocated geographical world hashing rate power.
20% of the world’s bitcoin mining hash in one project
GMT aims to acquire up to 20% of Bitcoin mining, a goal that may in fact prove successful even before their other plans are actualized. From an optimist’s point of view, their third party involvement strategy will be actualized in almost half the time that it would take for them to secure the 20% stake. With this knowledge, GMT was tactical in their reluctance to approach giants like Binance, but gave priority to the more local platforms.
Benefits of participation, which gives the next evolutionary step in mining strategies
- Increased future collateral capacity
Should GMT token’s strategy succeed, this will increase the company’s future collateral capacity many times over. In fact, the GMT token could hit a price of $1.5 over the next year.
- Geographical reallocation of hash rate
Bringing in third-party places and setting up operational bases that have equipment and infrastructure is one of the ways to reallocate resources. This is a good outcome as it eliminates centralization and the risks involved.
GMT therefore introduces a new evolution into mining strategies, ushering in a new model of decentralization where all community members have defined roles. The company solves the challenge of centralization-related risks such as inefficiency and the collapse of token hash rate. With miners bringing in their own infrastructure and getting GMT tokens in return, a self-sustaining system is achieved.
GMT has also committed to giving this growing space a chance to grow through a custom ecosystem featuring the necessary infrastructure for individual project implementation. The ecosystem is defined by integrated market structures fashioned to establish one effective and efficient structure.