The Decentralisation of Bitcoin Mining with Braiins
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SHOW DESCRIPTION
Jan Čapek and Pavel Moravec are the co-founders of Braiins, a Bitcoin Mining company. In this interview, we discuss Braiins update to their updated Stratum V2 protocol software for pooled mining, how it helps solve Bitcoin mining’s centralisation problem, and why Braiins has given the Stratum software away to the community as open source.
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The development and growth in pooled Bitcoin mining has been a critical part of maintaining Bitcoin’s security. The synergies of scale were always going to affect Bitcoin as it transitioned into a more mature technology. However, centralisation is an existential threat to Bitcoin. Mining pools, started in 2010 by Jan and Pavel, therefore enabled small-scale miners to continue to gain value from limited hash power, which thereby strengthened the network's security.
Nevertheless, just as the rise of the mega miners concentrated the hashrate, so did the rise of major mining pools. In February over 52% of the hashrate was controlled by just 2 mining pools (Foundry USA and Antpool). This is not to state that these mining pools have malevolent intentions. But Bitcoin must always guard against an attack through trustless mechanisms. Marathon’s flip-flopping over filtering non-OFAC-compliant transactions in 2021 was a warning.
The solution to the problem lies in the communication protocol used to connect miners with mining pools. The existing protocol, Stratum V1, was developed and distributed as open-source software by Braiins in 2012. Whilst it has successfully supported Bitcoin mining pools since then, it was in need of an upgrade for a series of reasons. Such an upgrade enabled this centralisation issue to be tackled head-on.
Stratum V2 transfers the power for writing new blocks from the pool operators and into the hands of individual miners. This is enabled by a sub-protocol within Stratum V2 called the “Job Negiotator”. The incentive for adoption is that the other updates enable faster (i.e. more profitable) and more secure communications. It is an elegant solution built with the same technical and community-facing ethos as Bitcoin’s open-source code. Děkuji Braiins!
TIMESTAMPS
00:01:49: Introductions
00:03:22: Background to Braiins
00:11:56: Stratum v1
00:15:21: Mining pools and their evolution explained
00:32:52: A 51% attack
00:38:42: Stratum v2 improvements to v1
00:52:54: Upgrading to v2
01:05:49: Hashrate growth
01:12:33: The business of mining, SegWit wars, and ASICBoost
01:28:48: Final comments
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SHOW NOTES
Connect with Braiins:
On Twitter
Braiins Website
Braiins Bitcoin Mining Handbook
Braiins Stratum V2 Overview and Features
Jan Čapek Twitter
Pavel Moravec Twitter
Mentioned in the interview:
Other Relevant WBD Podcasts:
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WBD619: Bitcoin Mining & the Energy Grid Transition with Troy Cross & Shaun Connell
WBD618: The Future of Bitcoin Mining & Security with Sam Wouters
WBD616: The Evolution of Bitcoin Narratives with Harry Sudock
WBD571: The White House is Wrong about Bitcoin Mining with Nic Carter
WBD563: Bitcoin, Unleashing an Ocean of Energy with Nathaniel Harmon
WBD562: How Bitcoin Helps Mitigate Climate Change with Harald Rauter
WBD557: Mining Bitcoin with Nuclear Energy with Ryan MacLeod
WBD538: The Current State of Bitcoin Mining with Harry Sudock