In response to recent news of Bitmain secretly vying for a majority of Bitcoin’s hash power, a publicly accessible bitcoin mining pool is offering an alternative for miners who want to choose their own, non-Bitmain-allocated hashing work.
For the first time ever, a bitcoin mining pool has added support for Stratum V2 custom block templates.
The second version (V2) of the largest bitcoin mining software, Stratum, now allows individual miners to choose their own block template. In other words, a miner may now select its own transactions, assemble its own block, and hash nonces appended to its own block in a race to meet Bitcoin’s difficulty threshold.
It’s rare for miners to choose their own block template and work strictly on their own behalf. Usually, miners simply accept Bitmain’s work allocation — Bitmain-apportioned sets of nonces to hash on a Bitmain-templated block of transactions to try to win Bitcoin’s 3.125BTC coinbase block reward for Bitmain’s mining pool.
But now, for the first time, miners may cooperate with non-Bitmain miners using Stratum V2 and the first-ever pool, DEMAND, to add support for Stratum V2 custom block templates.
Bitcoin mining monopoly
If this all sounds confusing, it’s meant to be. Bitmain is the stealthy, monopolistic provider of bitcoin mining hardware, the Antminer machine. Bitmain is also the owner of the largest mining pool, Antpool. Through its fleet of machines, proprietary software, and Antpool, Bitmain further obscures its operations through reported sockpuppet pools like BTC.com Pool, Binance Pool, Poolin, EMCD, and Rawpool.
In short, Bitmain has a corporate interest in obfuscating the reality of bitcoin mining to hide its monopolization of the industry. Obviously, it would embarrass most miners to admit that they simply accept work allocations from Bitmain as their de facto boss. Nevertheless, if new research from Bitcoin developer 0xb10c is accurate, that is indeed the reality for the vast majority of miners.
Whether accepting work directly from Antpool or from its reported proxies like BTC.com Pool, Poolin, or others, miners who hash nonces from the default Antpool template are working for Bitmain, not for themselves.
A nascent attempt at mining decentralization
However, a new option is opening up. DEMAND has launched a new publicly accessible, Stratum V2-enabled solo mining option for its mining pool. DEMAND published a guide for running the new solo mining option on Linux and Macintosh machines.
Pooling work alongside other miners is critical to compete against Bitmain. If every non-Bitmain miner were to choose their own block template, the odds of winning a coinbase reward over Bitmain would be infinitesimally small.
Winning Bitcoin’s coinbase reward is a matter of raw, brute-force guessing of a number that meets the difficulty threshold. It is a pure numbers game; the more guesses (‘hashes’), the higher the likelihood of success.
For this reason, if Antpool is dominating this guessing game with thousands or millions more hashes than any solo miner, its odds of winning every coinbase reward and bankrupting solo miners would be quite high. For this reason, it’s critical for non-Bitmain miners to pool their work with other non-Bitmain miners in order to have a realistic chance of success against the giant.
Pool mining using Stratum V2 custom block templates
DEMAND offers this cooperative option for solo miners. Using Stratum V2, solo miners may hash alongside other miners who choose the same, non-Bitmain block template — allowing them to compete as a team against Bitmain/Antpool miners. (Stratum V2 has a menu of common, non-Antpool block templates for willing participants.)
In summary, bitcoin mining has gained a decentralized alternative to Bitmain’s Antpool amid reports that Antpool and its alleged proxy pools have controlled a majority of Bitcoin’s hash power. Antpool’s use of sockpuppet pools has raised concerns about variations of the ‘51% attack’ or transaction censorship.
Stratum V2 is a new protocol for Bitcoin miners and pool operators that allows miners to choose work on non-Antpool block templates. Stratum V2’s website claims that the open-source project also improves security, decentralization, and the efficiency of data transfers. It also allows individual miners to create their own templates rather than accepting work allocations.
DEMAND is the first Bitcoin mining pool to fully support the custom block template feature of Stratum V2 and means that miners can co-work on block templates without the involvement of Bitmain or any of its sockpuppet pools.