Firm Title: 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: “Presently being bootstrapped”
Variety of Workers: 2
Web site: https://www.dmnd.work/
Public or Non-public? Non-public
Alejandro De La Torre is deeply involved that Bitcoin mining is just too centralized, and he’s on a mission to alter that. Because of this he began DEMAND, a Bitcoin mining pool that places energy again within the fingers of unbiased Bitcoin miners.
Earlier than moving into how DEMAND works, although, it’s necessary to know what De La Torre has discovered from his time within the Bitcoin mining trade in order to higher 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 the earth, 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 notice that there was little time to waste in decentralizing the Bitcoin mining panorama.
“The expertise I had within the final swimming pools made me notice that we wanted a change within the mining pool trade and we wanted it very, in a short time,” De La Torre instructed Bitcoin Journal. “There is a very clear downside with centralization in mining swimming pools at the moment, and I used to be in a position to pinpoint that concern whereas 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 title (it’s Antpool), and defined that such centralization has the facility to significantly injury Bitcoin.
“The anchor pool is near 50% of the community now. It permits for a 51% assault on the community, which might be catastrophic,” mentioned De La Torre.
“I don’t assume they’d ever do it, however the risk is there, which is already an enormous pink flag,” he added.
De La Torre additionally identified that such ranges of centralization pose dangers on the subject of community censorship, highlighting that it wouldn’t be troublesome for this main pool to censor half of the transactions on the Bitcoin community.
The potential for censorship and a 51% assault “are a really clear and current hazard that we now have in Bitcoin proper now,” in accordance with De La Torre.
Energy To The Solo Miners
In response to this, De La Torre and his enterprise accomplice, Felippo Merli, launched DEMAND Pool in November 2023 with the intention of placing the facility again within the fingers of solo miners.
DEMAND is the world’s first Stratum V2 mining pool. Stratum V2 is an open-source messaging protocol that allows 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 without doubt one of the main options that units Stratum V2 aside from different mining pool protocols.
“Swimming pools at the moment are those who’re accountable for constructing the blocks and including the transactions into the blocks,” mentioned De La Torre. “With Stratum V2 — with DEMAND — the miners themselves will be capable to construct the blocks and add the transactions that they need.”
Most filtering in mining swimming pools at the moment is completed on the pool degree, not the person miner degree. De La Torre understands that particularly within the wake of the introductions of protocols like Ordinals and Runes, miners need extra management over what kinds 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 offers me much less energy. That is what I need. I do not need the facility. I am finished with that energy,” mentioned De La Torre. “I’ve had it earlier than, and it is an excessive amount of energy within the fingers of too few. And that is not what Bitcoin is. Bitcoin is decentralization, and that 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 towards 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 bought to warmth up your private home throughout winter, proper? Why not simply use a Bitcoin miner as a heater?” mentioned De La Torre.
“In the event you’re fortunate, you hit a block and also you simply made your spouse very blissful,” he added with amusing.
Solo miners who be a part of DEMAND Pool may also have the choice to promote the hash fee they produce on a market, making certain that they obtain some earnings for his or her efforts. DEMAND has arrange a cope with the hash fee market Rigly and plans to determine extra partnerships.
De La Torre additionally touched on how DEMAND funds will probably be finished 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 (Payment Pay Per Share) system, which is usually used within the main mining swimming pools. With FPPS, miners cost a service payment 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 engaging to miners to receives a commission persistently with FPPS, however he was fast to level out that payouts via each PPLNS and FPPS are comparable over the long run.
“Lots of people have some misunderstandings about PPLNS,” mentioned De La Torre.
“FPPS provides you fixed payouts, which is okay. I perceive why a miner would discover FPPS. Nevertheless, PPLNS over sufficient time averages out to about the identical,” he added.
“Sure, you will not have fixed payouts, however you should have incorrect payouts in accordance with how a lot hash fee DEMAND has — and we intend to have quantity. You’ll nonetheless be getting a continuing payout, or it might common out to roughly the identical. So, there is not any actual draw back to it.”
De La Torre additionally identified that solo mining as a part of DEMAND’s pool is without doubt one of the finest methods for Bitcoin lovers to get their fingers on non-KYC bitcoin.
He additionally confused the truth that solo miners’ coming on-line will do one thing else that’s very important to preserving Bitcoin decentralized — it should deliver extra nodes on-line.
Ship Nodes
To make use of DEMAND’s block templates, miners need to run their very own nodes. Which means that solo miners wouldn’t solely contribute to the decentralization of Bitcoin’s hash fee but additionally to the decentralization of its governance.
“Not solely do we wish the solo group and the house mining group to flourish and to earn more money, however we additionally need node proliferation,” mentioned De La Torre.
“Solo miners will present hash fee to safe the community and doubtlessly make some bitcoin and in addition assist with sustaining Bitcoin Core or no matter Bitcoin consumer they need. Nodes are good for the well being of the system,” he added.
Wanting Forward
De La Torre additionally mentioned that DEMAND is presently engaged on increasing its companies to pooled mining, and that DEMAND will actively be searching for miners to return on board.
He’s vowed to make DEMAND a “steady and reliable pool with clear payouts,” differentiating it from the “black field” swimming pools on the market.
De La Torre appears to be doing every 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 swimming pools is changing into a really critical concern, and it is as much as us because the mining group to do one thing about it,” mentioned De La Torre. “If we don’t, it’s not good.”