TD₿: The Future of Bitcoin Mining Protocols: Making Every Watt Count by Rachel Rybarczyk
TL;DR Stratum V2 makes communication between miners and mining pools more efficient and protects the network against the risk of pools censoring transactions.
Hey Bitcoiners,
I’d like to turn your attention to a part of Bitcoin you may have never heard of before if you are not in the mining industry.
Stratum V1 is a Bitcoin messaging protocol that allows miners to communicate with mining pools to contribute hash rate to the network and create blocks in a standardized manner.
With Stratum V1, pooled mining works by pool operators ordering transactions and assigning block templates to miners. From there, miners service those blocks by creating the actual proofs of work.
The way Stratum V1 works today creates a lot of inefficiencies and potential attack vectors in the mining process. Stratum V2 is a new messaging protocol that is currently under development that aims to improve a lot of the shortcomings of Stratum V1.
One problem with Stratum V1 is that since the messages are not encrypted, miners are susceptible to man-in-the-middle attacks where an attacker can intercept messages between them and the pool. The attacker can then replace the credentials and effectively steal hash rate from miners. Stratum V2 reduces this attack vector by encrypting messages, improving the privacy of the protocol.
In addition, another issue with Stratum V1 is that the pool operators are the parties that order and select the transactions that are confirmed in each block. This dynamic gives a small number of pool operators the ability to censor transactions if they are incentivized or coerced to do so. Stratum V2 combats this risk of censorship by giving miners the option to select transactions and create block templates themselves.
This is important…Stratum V2 serves as a check on mining pools and helps protect the network by giving miners the ability to combat this censorship attack vector immediately if the need arises.
Beyond reducing the risk of these potential attacks, Stratum V2 also improves the bandwidth and increases the speed of the messaging protocol, ultimately boosting profits for miners in the process.
The benefits of Stratum V2 compared to Stratum V2 are highlighted below.👇
Rachel Rybarczyk from Galaxy Digital wrote this excellent report on Stratum V2 that everyone should read to learn more about this messaging protocol. (02/18/2022)
Developments like Stratum V2 are vital to continuing to improve Bitcoin’s resiliency and decentralization.
Although it’s still in its early days, Stratum V2 makes me even more bullish on the future of Bitcoin mining.
Tick tock next block,
Cory Klippsten
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Quote of the Day
“Stratum v2 radically increases miner decentralization in Bitcoin. It moves the responsibility of choosing which transactions to include in a block from the mining pool operators (very few actors) to the actual miners (a lot of independent actors).” - Muun, A talking, Self-custodial Bitcoin & Lightning Wallet
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Featured Event
Thursday — come to Bitcoin Meet Up 005 at The Beaumont Studios in Vancouver, BC, from 7:00-10:30 pm. They will have a special guest speaker, Samson Mow from JAN3, to discuss hyperbitcoinization and Bitcoin adoption at the nation-state level.
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