Bitcoin mining firm Luxor Technology says its hashrate-backed product offering up to 13% returns on Bitcoin is different to failed lending products by now-bankrupt firms BlockFi and Celsius.
) hashrate-backed product that could offer 10% to 13% returns shouldn’t be compared to failed products by BlockFi or Celsius as its returns come from proof-of-work, not “ponzi schemes,” claims the product’s creator Bitcoin mining firm Luxor Technology.. Host Peter McCormack expressed concern at Luxor's upcoming offering and discussed what a worst-case-scenario for Luxor’s product would look like.“There is actual proof-of-work and demonstrable economic activity happening .” Williams said.
Luxor’s product works through investors receiving a cut of loan repayments by posting Bitcoin as collateral to Luxor — which will then loan it to other miners to fund their operations. “It can be a more economically viable option for miners because they can receive funding upfront while retaining ownership of their mined Bitcoin,” he added.
We understand your concern regarding rehypothecation, but to be clear again, there is NO rehypothecation with this product. The yield comes from mining rewards as stated in the podcast.But those interested in making a return on their Bitcoin should tread with caution, says Joe Kelly, CEO of Bitcoin lending firm Unchained."Any investment or loan that requires a Bitcoin holder to part control with their Bitcoin should receive tremendous diligence and scrutiny,” he said.
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