Purpose

This STP aims (i) to assure the community that the hashrate backing BTCST is sufficiently decentralized and over-collateralized and (ii) to clarify the process with which BTCST will restore hashrate in the unlikely event of hashrate instability.

Details

The team has received many inquiries about BTCST’s hashrate stability in light of certain recent developments on Bitcoin mining regulations. The team now proposes this STP to assure the community that hashrate stability has always been a top priority for the project and to demonstrate that the team is well prepared to take tremendous effects to prevent adverse hashrate event.

If this STP is passed, Standard Hashrate Group will formally take the following actions:

• Maintain a reserve pool of hashrate that exceeds 150 PH/s of Bitcoin mining power in size, making the hashrate reserve ratio of BTCST greater than 100% (meaning we reserves 1 PH/s of Bitcoin hashrate for each 1 PH/s of hashrate in production);

• In the unlikely event that a percentage of BTCST’s production hashrate becomes unstable or inefficient in terms of power usage, replenish the production pool with hashrate from the reserve pool to completely remove any impact the instability or inefficiency may cause to BTCST; and

• Until all unstable or inefficient hashrate has passed BTCST audit to convincingly demonstrate to Standard Hashrate Group that it has become stable again with equal or better power usage efficiency and immune from similar causes of instability or inefficiency in the future, an amount of BTCSTs representing the amount of impacted hashrate will be removed from circulation (through means including open-market repurchases) and locked.

This means BTC rewards for BTCST will actually increase during times of hashrate instability or inefficiency, because the total amount of BTC hashrate represented by BTCST is guaranteed to be at least 150 PH/s, while the total circulation of BTCST could be less than 15 million during such times.