October 1, 2022

Solving the problem of centralization of bitcoin mining

Solving the problem of centralization of bitcoin mining

Mining company Braiins has introduced instructions for using a code that can make the mining process Bitcoin is more decentralized, CoinDesk writes.

It is expected that Stratum V2 will significantly change the principles of functioning of bitcoin mining and will help increase the safety and efficiency of mining pools.

“If this protocol does everything promised,“ centralization of mining ”as an argument could completely lose its relevance”- said Bitcoin developer Jimmy Song.

Matt Corallo of Square, who made a significant contribution to the development of the protocol, wrote:

“This development is of great importance tomining centralization problems. Instead of concentrating on centralizing the pools (as is happening today), we can concentrate on centralizing the miners and farm owners themselves! ”

Corallo introduced protocol last yearBetterHash, which became his own plan for decentralization of mining. Now Braiins and Corallo decided to put their know-how together to present a more effective solution.

Individual miners are often combined intopools to smooth out the negative effect of the uneven distribution of rewards. This has led to the fact that today only three mining pools control over 50% of the computing power of the Bitcoin network (BTC) and can directly affect which transactions are included in the blocks.

To prevent this situation, Stratum V2uses a model that changes the relationship of the miner with the mining pool. In the proposed system, the decision about which transactions to include in the blocks is made by miners, not pools. In addition, the individual right to vote in determining the vector for the development of bitcoin is returned to individual miners.

However, the developers note thatmining pools interested in censoring transactions may simply refuse to install Stratum V2, and the problem of centralization consists in the production of equipment, which so far is concentrated in the hands of several large players.

Encourage the use of Stratum V2 mining poolsshould the benefits offered by the protocol in the context of reducing costs, preventing attacks and limiting the theft of computing power. Now developers are completing the preparation of their solution, but it is already available for testing. It is expected that in the case of a favorable attitude of mining pools, their transition to Stratum V2 will require at least 12 months.