What Type of Derivative Can Be Used to Hedge against the Operational Risk of Mining?

Miners face various operational risks, including price risk, electricity cost risk, and hash rate risk. To hedge these, they can use a combination of derivatives.

Futures or forward contracts can hedge price risk. Specialized hash rate futures can hedge against a drop in hash rate.

Swaps can be used to hedge the volatility of electricity costs, allowing the miner to lock in a fixed energy price.