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Decentralizing Bitcoin Mining Through a DAO Structure

How Green Mining DAO taps decentralization to boost retail Bitcoin mining

A DAO provides a decentralized governance mechanism for organizing entities, such as pools of people with a common interest. It allows for the evolution of an entity to be determined in a decentralized manner by those who have actual skin in the game, strongly contrasting the predominant centralized method of governance whereby shareholders, workers, and even citizens are subject to the whims of small boards of irrational executives, politicians, or central bankers.

Green Mining DAO, as the name would suggest, has decided to implement a DAO structure to underpin the governance of its operations. Such a structure bestows several benefits on GMT token holders, allowing them to have a proportional say in the future evolution of Green Mining DAO while also regularly receiving dividends from the returns of the operation.

We outline here what exactly a DAO is, how it will function in the case of Green Mining DAO, and why it works in the case of Bitcoin mining. We will also consider whether the architecture of Green Mining DAO is better described as a DSO and factors that all GMT holders should consider.

DAO Dynamics and How Green Mining DAO Fits in

A DAO is a community-led entity composed of members who agree to abide by certain rules to achieve a common interest. A DAO removes the need for a central authority. It puts power back into the hands of a community of investors who acquire a stake in the business by owning the DAO’s tokens. These investors vote on critical decisions like treasury allocation and protocol upgrades, thereby collectively driving the DAO towards achieving its goals.

A DAO adopts smart contracts and blockchain-based transactions as critical components. The organization’s objectives such as the initial use of raised funds and profit distribution, are hardcoded into smart contracts. At the same time, the distributed nature of blockchain technology ensures greater transparency and eliminates certain levels of fraud possible in centralized entities. All of the DAOs transactions, both past and present, are visible on-chain and can be publicly audited. This level of transparency disincentivizes bad actors and breeds trust among DAO members.

The decision-making process in DAOs is generally inclusive as the opinions of most members are reflected in the final decisions. Although most community members can create governance proposals by meeting specified requirements, a majority of stakeholders must approve the proposal for it to be executed. This approach also makes DAO decision-making more flexible and less susceptible to self-interested resolutions.

Green Mining DAO is structured as a DAO to tap into the benefits associated with this innovative governance framework. The GMT token is a fundamental bond that binds together investors seeking exposure to the Bitcoin mining industry. The token represents ownership of clean-energy powered Bitcoin mining infrastructure managed by exemplary technical personnel. Green Mining DAO distributes generated profits to investors based on their GMT token holdings. DAO members must also hold GMT tokens to create governance proposals and vote on decisions that drive the evolution of mining operations. Nonetheless, Green Mining DAO will be hardcoded to adhere to certain principles that can not be overridden. For instance, all Green Mining DAO mining operations will be exclusively powered by renewable energy sources such as sole and wind energy.

A DAO to mine clean-energy Bitcoin

The current state of the Bitcoin mining industry is ripe for disruption. The majority of mining operations are currently run by centralized entities that face the same frailties that DAOs solve. Decision making is concentrated in the hands of a CEO executive or a management board, while workers, retail shareholders, and customers are sometimes subject to irrational decisions. For instance, third-party firms hosting mining machines on behalf of retail investors can increase fees at their own discretion or hike profit sharing ratios in their favor.

In a recent development, Compass Mining raised fees by up to 15% without an official announcement. Retail miners have no control over these decisions and must settle for lower profits, or risk running independent operations that struggle to achieve profitability. There are also other known challenges such as the delay of mining shipments, profit payouts, and largely environmentally unsustainable facilities.

Running a Bitcoin mining operation as a DAO solves the problems facing retail Bitcoin miners and unlocks lucrative profit potential for investors. At its core, Green Mining DAO members are united by a commitment to invest only in environmentally sustainable Bitcoin mining infrastructure. All mining operations are powered by solar plants and machines sourced from an accredited engineering, procurement, and construction (EPC) partner.

Meanwhile, the GMT token provides an unprecedented level of flexibility for investors to tailor their exposure. The Green Mining DAO lowers entry into bitcoin mining to as low as holding only $25 worth of GMT tokens. This is a viable alternative to investing huge amounts to mine bitcoin at home or setting up a third-party managed mining operation. Moreover, investors can simply buy and sell GMT tokens in a highly liquid market to increase or lower their exposure to bitcoin mining.

A DAO structure also means that investors are not subject to the whims of a management board or a small group. All GMT token holders can spearhead governance proposals and exercise voting rights on key management decisions. Investors can potentially vote on changes to mining profit sharing, fees for installing third-party mining machines, re-investing in the DAO treasury, etc.

Finally, the DAO model allows Green Mining DAO to leverage economies of scale to generate greater profits for investors than they would mining bitcoin individually. Industrial-scale mining infrastructure typically entails more high-grade mining equipment running at competitive energy costs. The Green Mining DAO also saves costs compared to traditional mining operations as fewer organizational personnel are required. For instance, a portion of financial and auditory tasks are delegated to autonomous blockchain smart contracts, bypassing the huge salaries and bonuses which are often assigned to C-level and executive positions. This flexible hierarchical structure allows the DAO to generate more profit which is distributed to token holders.

Green Mining DAO — A sustainable approach to retail bitcoin mining

A DAO is an innovative replacement for a rigid corporate structure that largely favors an elite few while undermining the interests of the greater majority. Setting up a Bitcoin mining operation as a DAO offers significant benefits currently inaccessible to retail miners and corporate entities. Green Mining DAO leverages blockchain technology to raise capital, lowers the entry barrier for retail miners, and gives all stakeholders the ability to influence decisions. There is more.

The focus on building and maintaining clean-energy Bitcoin mining facilities means Green Mining DAO is a sustainable organization supporting the broader movement towards a more sustainable Bitcoin mining ecosystem. The DAO potentially better fits the description of a decentralized sustainable organization (DSO), handing power back to retail while further decentralizing the underlying Bitcoin network.

The Green Mining DAO and GMT token represent ownership of highly profitable clean-energy Bitcoin mining operations. The revolutionary power of blockchain means retail investors can now support core Bitcoin network infrastructure without the several hurdles associated with home or small-scale retail mining.