Public Canadian mining company Hut 8 is teaming up with Luxor to use the technology firmâs software to power its new fleet of Ethereum and altcoin mining machines.
The Canadian miner recently purchased $30 million worth of Nvidiaâs crypto-focused graphics cards (GPUs) to mine Ethereum and other cryptocurrencies. Hut 8âs Cryptocurrency Mining Processors (CMPs, as Nvidia has branded them), will utilize Luxorâs Switch software to flip between Ethereum and other coins that use the SHA-256 hashing algorithm (same thatâs used for Bitcoin).
Hut 8 will host the hardware themselves but will rely on Luxor for software and hashrate management, per the agreement.
âInstitutional miners are looking for profit-switching algorithms to access deeper hashrate liquidity and get best point-in-time execution for their hashrate. Leveraging multiple blockchains, venues and MEV opportunities, Luxor Switch can deliver top miners, such as Hut 8 with extra return for their hashrate,â Luxor CFO Ethan Vera told CoinDesk.
Ethereumâs DeFi summer of 2020 and NFT spring of 2021 have been boons for miners, as transaction fees on the network ballooned alongside token valuations.
Developers recently approved an Ethereum Improvement Proposal for activation this July which would burn ETH transaction fees, a change that has been met with celebration from ETH users and exasperation from miners.
Even with some of their rewards capped by EIP 1559 and Ethereum migrating to proof of stake, miners are still putting money into their Ethereum mining infrastructure. Companies like Hut 8 expect the investment will pay off in the time it takes Ethereum to make the upgradeâand that it will probably pay some more after that.Â
âCompanies mining Ethereum are betting they will be able to get a return well ahead of a full-switch,â Vera told CoinDesk.Â
Some miners believe that Ethereum 1.0, the current network which runs on proof-of-work, will last a few years still even after Ethereum 2.0âs launch, Vera continued.
