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DEMAND Pool’s CEO Says The Time To Decentralize Bitcoin Mining Is Now

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DEMAND Pool’s CEO Says The Time To Decentralize Bitcoin Mining Is Now
Google News Recentlyheard

Google News Recentlyheard

Firm Identify: DEMAND

Founders: Alejandro De La Torre and Filippo Merli

Date Based: 2023

Location of Headquarters: Lisbon, Portugal and Florence, Italy

Quantity of Bitcoin in Treasury: “At present being bootstrapped”

Variety of Staff: 2

Web site: https://www.dmnd.work/

Public or Non-public? Non-public

Alejandro De La Torre is deeply involved that Bitcoin mining is just too centralized, and he’s on a mission to alter that. For this reason he began DEMAND, a Bitcoin mining pool that places energy again within the palms of impartial Bitcoin miners.

Earlier than entering into how DEMAND works, although, it’s necessary to know what De La Torre has realized from his time within the Bitcoin mining business in order to raised perceive his motivation in beginning DEMAND.

De La Torre’s Historical past In The Bitcoin Mining House

De La Torre has served because the VP of Poolin, one of many largest Bitcoin and crypto mining swimming pools on the earth, in addition to the VP of Enterprise Operations for BTC.com, which additionally operated its personal Bitcoin mining pool. What he noticed throughout his time in these two roles made him notice that there was little time to waste in decentralizing the Bitcoin mining panorama.

“The expertise I had within the final swimming pools made me notice that we would have liked a change within the mining pool business and we would have liked it very, in a short time,” De La Torre instructed Bitcoin Journal. “There is a very clear downside with centralization in mining swimming pools at the moment, and I used to be in a position to pinpoint that subject whereas working at BTC.com and Poolin.”

De La Torre went on to explain what number of Bitcoin mining swimming pools at the moment are proxies for a bigger pool, which he didn’t point out by title (it’s Antpool), and defined that such centralization has the ability to significantly injury Bitcoin.

“The anchor pool is near 50% of the community now. It permits for a 51% assault on the community, which might be catastrophic,” stated De La Torre.

“I don’t suppose they might ever do it, however the chance is there, which is already an enormous crimson flag,” he added.

De La Torre additionally identified that such ranges of centralization pose dangers in the case of community censorship, highlighting that it wouldn’t be troublesome for this main pool to censor half of the transactions on the Bitcoin community.

The potential for censorship and a 51% assault “are a really clear and current hazard that we’ve got in Bitcoin proper now,” in response to De La Torre.

Energy To The Solo Miners

In response to this, De La Torre and his enterprise companion, Filippo Merli, launched DEMAND Pool in November 2023 with the intention of placing the ability again within the palms of solo miners.

DEMAND is the world’s first Stratum V2 mining pool. Stratum V2 is an open-source messaging protocol that allows miners and swimming pools to speak immediately with one another, decreasing mining infrastructure necessities in comparison with its earlier iteration, and enabling solo miners to decide on their very own mining templates.

“Swimming pools at the moment are those who’re answerable for constructing the blocks and including the transactions into the blocks,” stated De La Torre. “With Stratum V2 — with DEMAND — the miners themselves will be capable to construct the blocks and add the transactions that they need.”

Most filtering in mining swimming pools at the moment is completed on the pool degree, not the person miner degree. De La Torre understands that, particularly within the wake of the introductions of protocols like Ordinals and Runes, miners need extra management over what forms of transactions they embody of their blocks. And De La Torre believes miners ought to have this energy, as a result of it provides to the ethos of decentralization. He additionally added that DEMAND will settle for any blocks despatched to the pool.

“This provides me much less energy. That is what I would like. I do not need the ability. I am accomplished with that energy,” stated De La Torre. “I’ve had it earlier than, and it is an excessive amount of energy within the palms of too few. And that is not what Bitcoin is. Bitcoin is decentralization, and that is furthering that.”

Incentivizing Solo Miners

De La Torre is conscious that the chances of mining a block are towards small-scale solo miners, however he doesn’t suppose they shouldn’t give discovering one a shot, and he’s additionally created different methods to incentivize solo miners to return on-line.

“You’ve acquired to warmth up your own home throughout winter, proper? Why not simply use a Bitcoin miner as a heater?” stated De La Torre.

“If you happen to’re fortunate, you hit a block and also you simply made your spouse very completely happy,” he added with amusing.

Solo miners who be part of DEMAND Pool may also have the choice to promote the hash price they produce on a market, making certain that they obtain some earnings for his or her efforts. DEMAND has arrange a cope with the hash price market Rigly and plans to ascertain extra partnerships.

De La Torre additionally touched on how DEMAND funds can be accomplished by way of the PPLNS (Pay Per Final N Share) system. With PPLNS, income are allotted primarily based on the quantity blocks a mining pool mines per day and payouts fluctuate primarily based on the pool’s luck in mining blocks.

This method differs from the FPPS (Full Pay Per Share) system, which is often used within the main mining swimming pools. With FPPS, the mining service cost and block reward are settled primarily based on theoretical revenue, and miners receives a commission whether or not the pool finds a block or not.

De La Torre is conscious that it could sound enticing to miners to receives a commission persistently with FPPS, however he was fast to level out that payouts by way of each PPLNS and FPPS are comparable over the long run.

“Lots of people have some misunderstandings about PPLNS,” stated De La Torre.

“FPPS offers you fixed payouts, which is ok. I perceive why a miner would discover FPPS. Nevertheless, PPLNS over sufficient time averages out to about the identical,” he added.

“Sure, you will not have fixed payouts, however you should have incorrect payouts in response to how a lot hash price DEMAND has — and we intend to have a superb quantity. You’ll nonetheless be getting a continuing payout, or it could common out to roughly the identical. So, there is not any actual draw back to it.”

De La Torre additionally identified that solo mining as a part of DEMAND’s pool is without doubt one of the finest methods for Bitcoin fans to get their palms on non-KYC bitcoin.

He additionally burdened the truth that solo miners’ coming on-line will do one thing else that’s important to preserving Bitcoin decentralized — it’ll carry extra nodes on-line.

Ship Nodes

To make use of DEMAND’s block templates, miners need to run their very own nodes. Which means solo miners wouldn’t solely contribute to the decentralization of Bitcoin’s hash price but in addition to the decentralization of its governance.

“Not solely do we wish the solo neighborhood and the house mining neighborhood to flourish and to make more cash, however we additionally need node proliferation,” stated De La Torre.

“Solo miners will present hash price to safe the community and doubtlessly make some bitcoin and likewise assist with sustaining Bitcoin Core or no matter Bitcoin consumer they need. Nodes are good for the well being of the system,” he added.

Trying Forward

De La Torre additionally stated that DEMAND is at present engaged on increasing its companies to pooled mining, and that DEMAND will actively be in search of miners to return on board.

He’s vowed to make DEMAND a “secure and reliable pool with clear payouts,” differentiating it from the “black field” swimming pools on the market.

De La Torre appears to be doing all the things in his energy to carry extra impartial miners on-line, and as he laid out his plans for DEMAND in my dialog with him, there was a palpable sense of urgency in his voice.

“The centralization of Bitcoin mining swimming pools is changing into a really critical subject, and it is as much as us because the mining neighborhood to do one thing about it,” stated De La Torre. “If we don’t, it’s not good.”

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