This proposal introduces a revolutionary lending protocol that enables Bitcoin miners to leverage both their Bitcoin holdings and HASH power as collateral for business financing. The BITCOIN C.H.I.P (Capital Hash Investment Protocol) creates a native Bitcoin Capital market that maintains network security while providing miners with efficient access to capital for legitimate business operations. The protocol requires 150% total collateral ratio, with Bitcoin as primary collateral (minimum 50%) and HASH power as secondary collateral (up to 50%), ensuring robust risk management while recognizing the intrinsic value of mining computational resources.
The innovative “CHIPPING” mechanism represents a paradigm shift in loan repayment by enabling automated micro-payments from mining rewards. Miners can configure a percentage (5%-50%) of their daily mining rewards to automatically reduce their loan balance, creating a “chipping away” effect that continuously pays down principal without requiring large lump-sum payments. This automated system reduces financial stress, lowers total interest costs, and optimizes cash flow by maintaining operational liquidity while systematically reducing debt. The CHIPPING mechanism is implemented through smart contracts that track mining rewards, calculate repayment amounts, and update loan balances in real-time, with performance incentives that reward consistent hash rate maintenance.
The protocol is designed to integrate with the growing institutional Bitcoin adoption, including government Bitcoin holdings (~200,000 BTC), traditional banking services (JPMorgan, Goldman Sachs, Morgan Stanley), and corporate Bitcoin reserves. This institutional integration provides enhanced liquidity, regulatory clarity, and sophisticated risk management while creating opportunities for public-private partnerships in mining infrastructure development. The protocol includes comprehensive business verification requirements, real-time collateral monitoring, and network protection mechanisms including a 5% maximum Bitcoin supply lending limit and 10% maximum HASH rate collateral limit. The dual collateral system creates unprecedented capital efficiency while maintaining network security, as HASH power collateral directly supports Bitcoin’s security infrastructure. The BITCOIN C.H.I.P protocol positions itself as a bridge between traditional financial institutions and the Bitcoin mining ecosystem, enabling government and banking participation while maintaining the decentralized and trustless nature of Bitcoin operations.