New ASIC chips will facilitate the decentralization of bitcoin mining

New ASIC chips will facilitate the decentralization of bitcoin mining

Key facts:
  • The announcement this month of a new mining chip may spur other launches.

  • Home mining will now be possible when miners with the new chip are offered.

Within the framework of the Bitcoin Conference 2022, two prominent Bitcoin technical experts, Adam Back, CEO of Blockstream and Steve Lee, Leader of Spiral, addressed various topics on the decentralization of Bitcoin mining in a panel this Friday, April 8. through the availability of new open source chips for miners.

The first topic addressed on the panel It was the centralization that involves the concentration of Bitcoin processing power in large mining pools. For Adam Back, this represents a challenge for individual miners, who are forced to join a pool and there is only room for 10 or 20 pools. Back says there are new technologies that can help tackle this centralization.

Steve Lee refers to the mining protocol called StratumV1 which is used for pools to talk to miners, and to a new Stratum V2 version that has a number of benefits.

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New ASIC chips will facilitate the decentralization of bitcoin mining

“I think the most relevant benefit is that instead of just a handful of mining pools that can run full Bitcoin nodes and do transaction selection, all miners can participate in the process. This, therefore, it would increase by one or two orders of magnitude the number of people and entities that can make the selection of transactions”Lee noted.

CriptoNoticias addressed in December 2019 the benefits of Stratum V2 to bitcoin miners and pools.

Changes towards a more open mining ecosystem

As for the process of centralizing mining hardware, Adam Back points out that before ASIC chips, people mined with CPUs and later with graphics cards (GPUs), which was much more home based or small business. Nevertheless, Due to economies of scale, data centers began to negotiate better pricesor locate the equipment in places where energy was cheaper.

There is reasonable concern that individual machines are being consolidated into ever larger data centers, and of course we also have public mining companies. However, there is a relatively new trend of people buying miners for home mining on some scale. Right now though, those miners are not that powerful because of their influence on the protocol, we saw this in the past, they basically have to follow the market.

Adam Back, CEO of Blockstream.

Complementing Back’s intervention, Lee points out that it is beginning to be seen a big change from what I considered a very closed mining ecosystem to an open one.

Adam Back, CEO of Blockstream and Steve Lee, Leader of Spiral, at the panel on the decentralization of bitcoin mining at the Bitcoin Conference 2022
Aaron van Wirdum (left) moderated the panel with Adam Back (center) and Steve Lee. Source: Screenshot/ youtube.com

“Historically, there have only been one or two major chip manufacturers, who sell their own mining equipment, and they don’t sell the chips individually.” This situation prevents new mining equipment from being developed by enterprising companies that could use those chips in other designs.

Lee mentions an important announcement in this regard, made at the conference, of the launch of a new chip for mining equipment, open source. The announcement, commented on by CriptoNoticias, was made by Intel last Monday, April 3.

That is great news for bitcoin. This is great news for miners. They are more options, more innovation. I think companies that sell chips will take a mining rig and break it down into individual components, with more and more suppliers of those individual components, which will allow startups and new businesses to create custom industrial designs, electrical designs, cooling designs that will open up many more new mining applications.

Steve Lee, Leader of Spiral.

In short, Lee says that “domestic mining is a kind of holy grail and even more so, sustainable energy mining, which even it may represent an improvement on existing factory farms.

Among other talks about mining at the Bitcoin Conference 2022, CriptoNoticias commented on the panel «(Home) Mining for the Streets», by four residential miners, who provided important advice to those who want to start mining at home. Also, this medium reviewed the announcement by Blockstream CEO, Adam Back, about building an infrastructure to harness solar energy and power Bitcoin mining farms.

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