Mining has become a heavily centralized industry, not necessarily due to concentration of ownership of actual mining hardware, but rather due to the central dependence on large mining pools to coordinate with other miners. This presents a problem on multiple fronts. Pools that hold miners’ funds give them the ability to withhold payments and force actual miners to behave or act in certain ways. The two largest pools require KYC information before allowing anyone to mine with them. Large groups can actively censor transactions if they wish, or if governments require them to, using their clients’ hashrate.
Pools are a necessary part of the bitcoin network, since without them the only option is solo mining. This means very infrequent and random payments that are very unpredictable and make planning a high capital business very risky. We need them, one way or another, but current pools are posing a growing systemic risk to bitcoin‘s success. They are beginning to present threats to the core property that makes bitcoin such a valuable and desirable system: its resistance to censorship.
Ocean announced its launch today as the first mining pool to comprehensively address these growing and concerning trends in the space. It’s time to fix bitcoin mining.
