On Friday, the wealth management company for cryptocurrencies known as Metalpha Technology Holding Ltd (NASDAQ: MATH) made the announcement that it will collaborate with the Litecoin Foundation to develop environmentally friendly mining solutions for the Litecoin ecosystem.
The Litecoin Foundation is a non-profit organization that is responsible for maintaining and developing products for the blockchain that bears its namesake.
The specific areas of research that will be conducted by the partnership include the development of derivative products, the facilitation of the use of renewable energy, the increase of energy efficiency, and the reduction of carbon emissions from mining on the Litecoin Network.
Metalpha plans to create financial derivative products for LTC tokens. In addition, the company intends to provide crypto miners with hedging products to protect themselves against market risk and to reduce the negative impact that cryptocurrency mining has on the environment.
The practice of hedging is a risk management strategy that involves taking an opposite position in an asset that is related to the investment being hedged against.
Crypto mining is a resource-intensive activity that relies on powerful computers to process and validate transactions for proof-of-work blockchains, such as Bitcoin and Litecoin. This type of blockchain is used by cryptocurrencies like Bitcoin and Litecoin. As a form of compensation for their work, miners are awarded tokens belonging to the network. These tokens are typically traded freely in order to recoup the costs of mining and generate a profit.
Miners have been leaving the market as a result of a drop in cryptocurrency prices because they are unable to cover the high costs of mining. Here is where hedging comes into play. Hedging enables miners to continue their operations and generate revenue regardless of how the market is performing.
In the meantime, Metalpha and the Litecoin Foundation have announced that they will collaborate with educational and research institutions to advance the use of blockchain technology in a sustainable manner, improve network awareness, adoption, and scalability, and support public education concerning the Litecoin network.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.