Celsius

Bitcoin

Recent reports addressed by the Luxor Technology executives emphasized their Bitcoin hash rate-backed product. The company stated that the returns noted are not from a pixie dust Ponzi scheme, shutting down all rumors of the company being related to illegal activities.&nbsp; 
Such incidents have flooded the crypto space in the past half-decade, but this new incident has caught the attention of most investors. This is related to the upcoming Bitcoin hash rate that could offer significant returns compared to other products from Celsius or BlockFi.&nbsp; 
<h2 class="wp-block-heading" id="luxor-explains-its-hash-rate-product-details">Luxor explains its hash rate product details&nbsp;</h2> 
In a podcast episode, Host Peter McCormack explained concerns about the Luxor offering and discussed legitimacy issues. In the What Bitcoin Did <a href="https://www.whatbitcoindid.com/podcast/bitcoin-mining-adapt-or-die" rel="nofollow noopener" target="_blank">episode</a> on October 17, McCormack debated on the worst-case scenario of what the upcoming Luxor hash rate product would look like.&nbsp; 
Among the concerning queries brought to light include whether the product will be a repeat of BlockFi and Celsius’s products offered before. However, the recent announcement by the Bitcoin mining firm cleared up the air and stressed major details about their product, dismissing <a href="https://www.cryptopolitan.com/hong-kongs-sfc-considers-spot-crypto-etfs/">comparison </a>to other similar products. 
The hash rate-backed products offered by the tech firm Luxor issued 10% to 13% on returns and proved to outperform other products. In emphasis, Luxor explained that the yields are from its proof-of-work mechanisms and not a “Ponzi scheme.”&nbsp; 
The Bitcoin mining firm is now in the spotlight amid the recent events surrounding BTC, including new products entering the market, such as this awaited hash rate-backed product. 
Head of Derivatives in Luxor Technology, Matt Williams, explained more on the matter and stated that the hash rate will be backed by economic production. He said: 
<blockquote class="wp-block-quote"> 
 Actual proof-of-work and demonstrable economic activity is happening. The return comes from miners giving up some of the margins that they would produce from their mining business to an investor that is financing their operation. The main takeaway: The return comes from hash rate, not from pixie dust, Ponzi schemes, or rehypothecation. <cite>Matt Williams</cite>
</blockquote> 
<h2 class="wp-block-heading" id="here-s-how-luxor-tech-receives-its-returns">Here’s how Luxor Tech receives its returns</h2> 
The tech firm emphasized that investors receive a cut-off from loan repayment, doing so by posting BTC as a liability to Luxor. Later on, the firm loans these digital assets to other miners to fund their operations. Regulating returns, they are collected from the purchase of a hash rate from a Bitcoin miner, which is at a discount price.&nbsp; 
Afterward, this is locked in and traded at a higher price to create returns. The hash rates are the rewards from Bitcoin mining. Additionally, the company stresses that the investor returns are over <a href="https://x.com/TheBTCTherapist/status/1717937856574890006?s=20" rel="nofollow" target="_blank">10%</a>, and the process will be operational on the company’s upcoming hash rate marketplace.&nbsp; 
Luxor’s executive, Williams, added that one benefit of the product is providing miners with enough capital to proceed with their operations. The product provides access to funds and eliminates the need for selling their BTC. He explained: 
<blockquote class="wp-block-quote"> 
 &nbsp;It can be a more economically viable option for miners because they can receive funding upfront while retaining ownership of their mined Bitcoin. <cite>Matt Williams</cite>
</blockquote> 
However, the Luxor Technology firm detailed that it doesn’t have its own mining pool, explaining its role as an intermediary between miners or mining firms and interested investors. Williams said, “We only custody Bitcoin for a very short period of time as we move funds from the buyer (investor) to the seller (mining firm).”&nbsp; 
The firm also mentioned more on the upcoming product in its X handle and shaded more light into what exactly their product is.&nbsp; 
Any development doesn’t have its critics, and in this case, Joe Kelly, Unchained CEO, a Bitcoin Lending firm, expressed his scrutiny and warned investors seeking returns on their <a href="https://www.cryptopolitan.com/apefest-attendees-experience-vision-issues/">BTC</a> investments to tread with caution. He said: 
<blockquote class="wp-block-quote"> 
 &nbsp;Any investment or loan that requires a Bitcoin holder to part control with their Bitcoin should receive tremendous diligence and scrutiny. The Bitcoin lending and borrowing markets are very nascent, and we are likely to see repeats of the failures that happened with BlockFi and Celsius unless investors on the whole exercise extreme caution. <cite>Joe Kelly</cite>
</blockquote>

Luxor denies allegations of its Bitcoin hash rate-backed products being a “Ponzi Scheme”

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