The Bitcoin mining firm has clarified the details of its hash rate-backed product, which offers 10% to 13% returns to investors. The company said the product is based on proof-of-work and economic production, not a Ponzi scheme.
Luxor Technology has addressed recent reports that questioned the legitimacy of its hash rate-backed product, which promises 10% to 13% returns to investors.
The company stated that the product is not a “pixie dust Ponzi scheme” but a genuine innovation based on proof-of-work and economic production.
How Luxor’s Hash Rate Product Works
The hash rate-backed product offered by Luxor Technology is a new product that leverages the power of Bitcoin mining to generate returns for investors.
The product allows investors to lend their Bitcoin to Luxor, which then loans it to other miners to fund their operations.
In exchange, the investors receive a cut of the loan repayment, as well as a portion of the hash rate purchased from the miners at a discounted price.
The hash rate is then sold at a higher price on Luxor’s upcoming hash rate marketplace, creating profits for the investors.
The hash rate measures the computing power used to mine Bitcoin. The higher the hash rate, the more likely a miner is to find the next block and earn the block reward.
By investing in the hash rate-backed product, investors can benefit from the increasing demand and value of the hash rate, as well as the rising price of Bitcoin.
Luxor Clears up Ponzi Scheme Rumors
Luxor Technology has refuted the rumors that its hash rate-backed product is a Ponzi scheme, which is a fraudulent scheme that pays returns to investors from their own money or the money of new investors rather than from actual profits.
The company said that its product is based on actual proof-of-work and demonstrable economic activity, not on “pixie dust” or “rehypothecation.”
The company explained that its product differs from other products offered by platforms such as Celsius or BlockFi, which rely on lending and borrowing Bitcoin and other cryptocurrencies.
Luxor said that its product does not involve any counterparty risk, as the hash rate fully collateralizes the investors’ Bitcoin.
Moreover, the company said that its product does not depend on the performance of any third-party platform, as the hash rate is directly sourced from the miners and sold on Luxor’s own marketplace.
Benefits for Miners and Investors
Luxor Technology said that its hash rate-backed product offers benefits for both miners and investors.
For miners, the product provides access to capital without having to sell their Bitcoin, which can help them expand their operations and increase their profitability.
For investors, the product offers high returns that are backed by hash rate and Bitcoin, which can help them diversify their portfolio and hedge against inflation.
The company also highlighted that its product is aligned with the vision of Bitcoin, as it supports the decentralization and security of the network by incentivizing more miners to participate.
Hence, the hash rate-backed product is a win-win solution for the Bitcoin ecosystem.
The company is based in Seattle, Washington, and has offices in Canada and China. It was founded in 2017 and has raised $5 million in funding from investors such as Blockware Solutions, Celsius Network, and Routemaster Capital.
You can learn more about the company and its products on its website or follow its Twitter account.
