DEMAND Announce Bitcoin Stratum V2 Mining Pool

On Tuesday, Nov 28, DEMAND announced their launch as a new kind of mining pool built on the open source Stratum Reference Implementation (SRI) that aims to aid in decentralizing the bitcoin mining landscape, with the added benefit of enhanced security, flexibility, and performance for miners.

This is a positive step that brings more hope for the potential of decentralizing bitcoin mining and maintaining bitcoin’s censorship resistance.

Traditional Bitcoin Mining Pools

Looking back at the evolution of bitcoin mining, all the way up to the crystallization of ASIC-based mining via mining pools as the dominant form of bitcoin mining, a pressing concern for the bitcoin ecosystem remains the potential of mining centralization and its adverse effects, such as arbitrary censorship of transactions.

The attempts to decentralize the mining landscape have spanned from setting up mining in relatively uncommon regions with abundant energy to improving the Stratum V1 mining protocol responsible for pooled bitcoin mining today.

In detailing this problem, the SRI lead developer, Filippo Merli, mentions, “Because Bitcoin mining is overwhelmingly done through mining pools, transaction selection has become relatively centralized—only a few mining pool operators can essentially decide to collude and prevent that certain transactions ever confirm.”

Stratum V2 Mining

To this end, an upgraded version of the commonly used Stratum v1 protocol, first proposed by Pavel Moravec and Jan Čapek in collaboration with Matt Corallo, has been in active development by Braiins and a recent open-source reference implementation, the SRI, supported by organizations such as the Human Rights Foundation and Spiral.

This upgrade focuses on improving its predecessor’s security, efficiency, and flexibility, with mechanisms in place to foster decentralization. These improvements address fundamental shortcomings from Stratum V1 era, from security to allowing individual miners, not the pool, to construct the block template and have a say in which transactions to include in a block.

In describing the Stratum V2 upgrade, Merli mentions that “Stratum V2 gives the power of transaction selection back to the individual miners, to make the mining ecosystem more decentralized and bitcoin more censorship-resistant”.

Currently, miners can connect to pool’s that support Stratum V2 via a translation proxy server.

DEMAND

DEMAND was founded by Alejandro de la Torre, former Vice President of BTC.com and Poolin, and Filippo Merli, lead developer of the open-source SRI.

They are currently focused on servicing solo miners and allowing them to accrue the block rewards, facilitating hash resale on a marketplace, and provide these miners with the option to auction their hash power to the highest bidder or maximize earnings through bitcoin mining.

Solo mining with DEMAND involves bitcoin miners operating independently, competing against the entire network to discover blocks and earn the full reward of 6.25 BTC ($260,521) plus transaction fees.

According to Alejandro, “With Stratum V2 and our new solo mining pool, we aim to make home mining more attractive, which should, in effect, help decentralize the bitcoin mining ecosystem and improve the health of the bitcoin network overall.”

Though DEMAND is currently only available to solo miners, they plan to provide pooled mining to share collaborative profit between miners.

Nevertheless, DEMAND is good news for solo miners, especially those in Africa, that there are now better tools and opportunities available to help make their mining more sustainable and overall helps in the continued effort to decentralize bitcoin mining.