What Are the Economic Incentives for Hashrate Providers to Rent out Their Power Instead of Mining Directly?

Providers rent out their hashrate for guaranteed, immediate profits, eliminating the volatility and luck associated with traditional mining. Mining rewards depend on finding a block, which can be unpredictable, and the value of the mined coin can fluctuate wildly.

By renting, they lock in a fixed price for their computational power, transferring the market and operational risks to the buyer. This model provides a stable and predictable revenue stream, which is highly attractive for large-scale mining operations needing to cover consistent operational costs like electricity and maintenance.

It's a straightforward business decision to choose guaranteed cash flow over speculative mining.