How Does a Miner Use Hashrate Rental to Hedge against Operational Costs?

A miner can use hashrate rental markets to sell a forward contract on their future mining capacity. By locking in a price for a specific amount of hashrate over a set period, they guarantee a predictable revenue stream.

This guaranteed income can be used to cover fixed operational costs like electricity and hardware depreciation, regardless of the coin's price volatility or sudden drops in mining profitability. This acts as a form of risk management, stabilizing the miner's cash flow.