BTC.com solemnly published "The Road to Decentralized Mining and the Future of Mining Pools"

The POWER Conference hosted by Mars Finance was held in Beijing from August 20th to 21st. BTC.com was solemnly invited to participate and delivered a speech entitled "The Road to Decentralized Mining and the Future of Mining Pools".

(Picture 1: BTC.com head gives a solemn speech)

In his speech, he solemnly mentioned that there are potential risks in the current operation of mining pools, such as the concentration of computing power leading to 51% attacks and hacker attacks on mining pools causing huge losses. In addition, under the current mainstream Stratum protocol, mining pools have the power to decide which transactions to package and which blocks to mine. These issues have led to the market's demand for decentralized operation of mining pools.

There are currently some solutions exploring decentralized mining in the market, such as SmartPool solving the problem of workload verification by running smart contracts on ETH; BetterHash protocol optimizes the protocol so that miners can directly package transactions to achieve decentralized operations, etc.

(Image 2: Stratum V2)

Inspired by BetterHash, the Braiins team proposed Stratum V2. The use of Stratum V2 requires the mining machine/mining pool manufacturers to update the protocol synchronously. The mining machine running the Bitcoind client can realize autonomous block construction. The mining machine that has not upgraded to the new version of the protocol also has a proxy server that converts to the original Stratum protocol. We compared the contents of the new and old Stratum protocols:

( Picture 3: Comparison of the old and new protocols 1)

(Picture 4: Comparison of the old and new protocols 2)

In terms of network transmission, Stratum2.0 converts the transmission content from plain text to binary, standardizes the protocol documents, removes redundant content, reduces bandwidth usage, and improves the communication efficiency between mining machines and mining pools. In addition, the communication content between mining pools and mining machines is encrypted to reduce the risk of hacker attacks and improve the security of network communications. Most importantly, the V2 protocol allows miners to build and submit blocks, weakening the power of mining pools, and its reference will realize the decentralized operation of mining.

Zhuang Zhong said: " In the future, BTC.com mining pool will also support two versions of mining pool protocols at the same time, providing miners with more choices ." In addition, BTC.com also launched a code open source project in 2016. Currently, developers such as RSK, AsicBoost, and Dash have contributed code, and more developers are welcome to participate in this open source project.

In general, BetterHash and Stratum V2 take into account the pain points of the existing protocols while moving towards decentralized mining pools. Many improvements are long-term consensus in the industry. However, there are still issues to be confirmed:

1. The protocol advocates that miners independently form blocks for mining operations, which weakens the power of mining pools . Will it be supported by enough mining pools?

2. Will the miners respond positively to the scheme that incentivizes them to pay extra costs for maintaining the Bitcoind client but temporarily gain benefits?

3. Under the new agreement, the mining pool still controls the distribution of mining revenue. In other words, miners cannot work completely against the "will of the mining pool". Has the core issue of decentralization been resolved?  

The implementation and promotion of the decentralized mining pool protocol still has a long way to go. In the future, after the introduction of the new version of the protocol, miners only need to pay attention to the services and benefits of the mining pool when choosing a mining pool. Will there be only one mining pool left in the decentralized mining in the future? It is worth looking forward to!