evanbaer on Nostr: 2 years ago, I started building a hashrate marketplace and learned a few things about ...
2 years ago, I started building a hashrate marketplace and learned a few things about #bitcoin mining, money laundering and KYC.
When I started Rigly.io in 2022, I wanted to offer a way to mine #Bitcoin w/o buying hardware.
I wasn't the first person to have this idea, there are 2 other hashrate markets (NiceHash and Mining Rig Rentals)
Both sell hashrate for more btc than it will earn via mining...
This struck me as odd.
Who trades hard-earned bitcoin .... for hashrate to earn less bitcoin?
My first thought: This must be money laundering🚫
And then I did my own research and learned about KYC (Know Your Customer)
Whenever you buy bitcoin, you must verify yourself with the same level of ID as opening a bank account..
If you are treat your bitcoin like a bank balance (and trust your exchange) maybe KYC is no big deal..
But let's take a closer look at what KYC means:
1) Do you want your personal info stored forever in the exchange's database? 📸📄
2) Do you trust the exchange to keep this info separate from your bitcoin? 🙅♂️
Many answer "No" and choose to self-custody🔐
However the KYC data - including purchase history (!) - is still on the exchange.
This means your personal info is still tied to your bitcoin even when you self-custody (!)
And so many people choose to mine *new* bitcoin and get their privacy back⛏️
These are the people who are buying hashrate.
It isn't money laundering.
It's people taking their privacy back (by mining bitcoin)
^ I know this is all probably old news to a lot of bitcoiners, but it was new to me.
When I started Rigly.io in 2022, I wanted to offer a way to mine #Bitcoin w/o buying hardware.
I wasn't the first person to have this idea, there are 2 other hashrate markets (NiceHash and Mining Rig Rentals)
Both sell hashrate for more btc than it will earn via mining...
This struck me as odd.
Who trades hard-earned bitcoin .... for hashrate to earn less bitcoin?
My first thought: This must be money laundering🚫
And then I did my own research and learned about KYC (Know Your Customer)
Whenever you buy bitcoin, you must verify yourself with the same level of ID as opening a bank account..
If you are treat your bitcoin like a bank balance (and trust your exchange) maybe KYC is no big deal..
But let's take a closer look at what KYC means:
1) Do you want your personal info stored forever in the exchange's database? 📸📄
2) Do you trust the exchange to keep this info separate from your bitcoin? 🙅♂️
Many answer "No" and choose to self-custody🔐
However the KYC data - including purchase history (!) - is still on the exchange.
This means your personal info is still tied to your bitcoin even when you self-custody (!)
And so many people choose to mine *new* bitcoin and get their privacy back⛏️
These are the people who are buying hashrate.
It isn't money laundering.
It's people taking their privacy back (by mining bitcoin)
^ I know this is all probably old news to a lot of bitcoiners, but it was new to me.