In an effort to further decentralize Bitcoin mining, Bitcoin company Blockstream revealed last week that it will offer mining services: Blockstream Mining and Blockstream Pool. With a mega mining farm and a mining pool based on the BetterHash protocol, it wants to lower the threshold to enter the mining industry.
At the moment it is not that easy to start as a new Bitcoin miner. Carrying out everything under your own management requires specialized knowledge and a substantial investment, and outsourcing to a professional hosting provider is often accompanied by handing over control and all the associated risks and uncertainties.
The threshold to enter the sector is therefore high and much of the Bitcoin hashrate is in the hands of fairly large players. And that, according to Blockstream, is not good for Bitcoin decentralization.
That is why it recently launched Blockstream Mining, a new branch of the company that offers Bitcoin mining services. Via Blockstream Mining, companies can start their own mining operation in which they manage it themselves, and Blockstream takes care of the installation, hosting and maintenance.
To this end, Blockstream has set up a mega-mining farm spread over two locations, in Canada and the US state of Georgia. The total capacity of these two facilities is no less than 300 MegaWatt (MW). Based on the latest mining equipment, that’s enough to add about 8% to Bitcoin’s total hashrate.
With the offer, Blockstream wants to lower the threshold for companies to start Bitcoin mining. In this way, they hope to decentralize the Bitcoin mining process across more different parties.
A look inside the Blockstream mining farm in Quebec, Canada
Companies that use Blockstream Mining can choose to mine under their own management or join Blockstream Pool. According to Blockstream, this mining pool is the first commercial mining pool to use the innovative BetterHash protocol.
In contrast to older mining pool protocols, connected miners transfer as little control as possible to the manager of the mining pool. And that benefits the decentralization of the Bitcoin mining process.
According to Blockstream’s Chief Strategy Officer Samson Mow, there is also a lot of emphasis on transparency of the user interface and customers have insight into all kinds of metadata.
Part of the capacity is already in use. Blockstream has its own mining operation which they claim represents ‘ less than 1% ‘ of the Bitcoin hashrate. In addition, it has found clients in the Fidelity Center for Applied Technology and LinkedIn co-founder Reid Hoffman.
Initially, Blockstream Mining is only available to large investors and companies that want to set up a large mining operation. This involves hundreds, or thousands, of units of specialized ASIC (Application-Specific Integrated Circuit) mining equipment.
However, the intention is to scale up the service in the future so that smaller parties can also make use of the offer. Mow said he hopes to reduce the entry to 10 to 20 ASICs by 2020. The more different parties are involved in mining, the better it is for Bitcoin, is the idea.
It is not quite like the good old days when everyone had their own miner, but according to Mow it is a step in the right direction. “It’s hard to go back to the point where everyone is running their own hardware… There are different degrees of improvement, and this is an improvement.” said Mow.
Block stream
Blockstream is a Bitcoin company that plays an important role in the Bitcoin ecosystem. It was founded in 2014 with the aim of developing Bitcoin for commercial use. Blockstream employs several prominent Bitcoiners, including CEO Adam Back and Bitcoin Core developers such as Pieter Wuille, Andrew Poelstra, Jonas Nick, Rusty Russell, Christian Decker, and Russell O’Connor.
The company is known for initiatives such as Blockstream Satellite, Green Wallet and the Liquid Network sidechain, among others, and made significant contributions to the development of Segwit and the Lightning network.
