Firm Identify: DEMAND
Founders: Alejandro De La Torre and Filippo Merli
Date Based: 2023
Location of Headquarters: Lisbon, Portugal and Florence, Italy
Quantity of Bitcoin in Treasury: “Currently being bootstrapped”
Variety of Workers: 2
Web site: https://www.dmnd.work/
Public or Personal? Personal
Alejandro De La Torre is deeply involved that Bitcoin mining is simply too centralized, and he’s on a mission to vary that. This is the reason he began DEMAND, a Bitcoin mining pool that places energy again within the arms of unbiased Bitcoin miners.
Earlier than moving into how DEMAND works, although, it’s vital to grasp what De La Torre has realized from his time within the Bitcoin mining business in order to raised perceive his motivation in beginning DEMAND.
De La Torre’s Historical past In The Bitcoin Mining House
De La Torre has served because the VP of Poolin, one of many largest Bitcoin and crypto mining swimming pools on this planet, in addition to the VP of Enterprise Operations for BTC.com, which additionally operated its personal Bitcoin mining pool. What he noticed throughout his time in these two roles made him understand that there was little time to waste in decentralizing the Bitcoin mining panorama.
“The experience I had in the last pools made me realize that we needed a change in the mining pool industry and we needed it very, very quickly,” De La Torre informed Bitcoin Journal. “There’s a very clear problem with centralization in mining pools today, and I was able to pinpoint that issue while working at BTC.com and Poolin.”
De La Torre went on to explain what number of Bitcoin mining swimming pools are actually proxies for a bigger pool, which he didn’t point out by identify (it’s Antpool), and defined that such centralization has the facility to noticeably injury Bitcoin.
“The anchor pool is close to 50% of the network now. It allows for a 51% attack on the network, which would be catastrophic,” mentioned De La Torre.
“I don’t think they would ever do it, but the possibility is there, which is already a huge red flag,” he added.
De La Torre additionally identified that such ranges of centralization pose dangers in the case of community censorship, highlighting that it wouldn’t be tough for this main pool to censor half of the transactions on the Bitcoin community.
The potential for censorship and a 51% assault “are a very clear and present danger that we have in Bitcoin right now,” based on De La Torre.
Energy To The Solo Miners
In response to this, De La Torre and his enterprise companion, Felippo Merli, launched DEMAND Pool in November 2023 with the intention of placing the facility again within the arms of solo miners.
DEMAND is the world’s first Stratum V2 mining pool. Stratum V2 is an open-source messaging protocol that permits miners and swimming pools to speak immediately with one another, lowering mining infrastructure necessities in comparison with its earlier iteration, and enabling solo miners to decide on their very own mining templates. This latter functionality is likely one of the main options that units Stratum V2 other than different mining pool protocols.
“Pools today are the ones who are in charge of building the blocks and adding the transactions into the blocks,” mentioned De La Torre. “With Stratum V2 — with DEMAND — the miners themselves will be able to build the blocks and add the transactions that they want.”
Most filtering in mining swimming pools at this time is completed on the pool stage, not the person miner stage. De La Torre understands that particularly within the wake of the introductions of protocols like Ordinals and Runes, miners need extra management over what sorts of transactions they embrace of their blocks. And De La Torre believes miners ought to have this energy, as a result of it provides to the ethos of decentralization.
“This gives me less power. That’s what I want. I don’t want the power. I’m done with that power,” mentioned De La Torre. “I’ve had it before, and it’s too much power in the hands of too few. And that’s not what Bitcoin is. Bitcoin is decentralization, and this is furthering that.”
In efforts to assist miners with filtering, DEMAND has created a collection of mining templates that miners can readily use of their operations.
Incentivizing Solo Miners
De La Torre is conscious that the chances of mining a block are in opposition to small-scale solo miners, however he doesn’t assume they shouldn’t give discovering one a shot, and he’s additionally created different methods to incentivize solo miners to return on-line.
“You’ve got to heat up your home during winter, right? Why not just use a Bitcoin miner as a heater?” mentioned De La Torre.
“If you’re lucky, you hit a block and you just made your wife very happy,” he added with amusing.
Solo miners who be a part of DEMAND Pool can even have the choice to promote the hash fee they produce on a market, guaranteeing that they obtain some revenue for his or her efforts. DEMAND has arrange a cope with the hash fee market Rigly and plans to ascertain extra partnerships.
De La Torre additionally touched on how DEMAND funds can be accomplished by way of the PPLNS (Pay Per Final N Share) system. With PPLNS, earnings are allotted based mostly on the quantity blocks a mining pool mines per day and payouts fluctuate based mostly on the pool’s luck in mining blocks.
This technique differs from the FPPS (Price Pay Per Share) system, which is often used within the main mining swimming pools. With FPPS, miners cost a service price based mostly on theoretical revenue, and miners receives a commission whether or not the pool finds a block or not.
De La Torre is conscious that it might sound enticing to miners to receives a commission constantly with FPPS, however he was fast to level out that payouts by means of each PPLNS and FPPS are comparable over the long run.
“A lot of people have some misunderstandings about PPLNS,” mentioned De La Torre.
“FPPS gives you constant payouts, which is fine. I understand why a miner would find FPPS. However, PPLNS over enough time averages out to about the same,” he added.
“Yes, you won’t have constant payouts, but you will have incorrect payouts according to how much hash rate DEMAND has — and we intend to have a good amount. You will still be getting a constant payout, or it would average out to more or less the same. So, there’s no real downside to it.”
De La Torre additionally identified that solo mining as a part of DEMAND’s pool is likely one of the greatest methods for Bitcoin fanatics to get their arms on non-KYC bitcoin.
He additionally harassed the truth that solo miners’ coming on-line will do one thing else that’s very important to holding Bitcoin decentralized — it should deliver extra nodes on-line.
Ship Nodes
To use DEMAND’s block templates, miners need to run their very own nodes. Because of this solo miners wouldn’t solely contribute to the decentralization of Bitcoin’s hash fee but additionally to the decentralization of its governance.
“Not only do we want the solo community and the home mining community to flourish and to make more money, but we also want node proliferation,” mentioned De La Torre.
“Solo miners will provide hash rate to secure the network and potentially make some bitcoin and also help with maintaining Bitcoin Core or whatever Bitcoin client they want. Nodes are good for the health of the system,” he added.
Trying Forward
De La Torre additionally mentioned that DEMAND is at present engaged on increasing its providers to pooled mining, and that DEMAND will actively be on the lookout for miners to return on board.
He’s vowed to make DEMAND a “stable and trustworthy pool with transparent payouts,” differentiating it from the “black box” swimming pools on the market.
De La Torre appears to be doing every little thing in his energy to deliver extra unbiased miners on-line, and as he laid out his plans for DEMAND in my dialog with him, there was a palpable sense of urgency in his voice.
“The centralization of Bitcoin mining pools is becoming a very serious issue, and it’s up to us as the mining community to do something about it,” mentioned De La Torre. “If we don’t, it’s not good.”
