Generalized Mining

BlockworksNov 10, 2018 ⋅ 2 min read

Introduction

Generalized mining is when a third party provides supply side services to a decentralized network in exchange for compensation. Often times a certain amount of tokens are required to stake in order to have the right to provide these services. This can be thought of like a digital taxi medallion that lets you earn revenue for providing work. These tokens are often called "work tokens".

Examples of generalized mining include providing video transcoding for Livepeer, compute power for Golem or storage in Filecoin

Investment funds, exchanges, and custodians are often thought of as the entities who would participate in generalized mining as they typically control a large portion of the token supply. From an investor's standpoint if they are long a decentralized network it makes intuitive sense to bootstrap these supply side services so that users can start storing files, watching videos etc.

Token holders looking to earn passive token rewards can delegate their tokens to these service providers in a similar model to Staking-as-a-Service.

Suggested Reading

A Primer on Mining 2.0 - Token Daily

The Evolving Role of Crypto Investors - Tushar Jain

To find more content and up to date information check out our board on Generalized Mining

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Outline
  • Introduction
  • Suggested Reading