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: “Presently 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. For this reason he began DEMAND, a Bitcoin mining pool that places energy again within the fingers of impartial Bitcoin miners.
Earlier than stepping into how DEMAND works, although, it’s essential to grasp what De La Torre has realized from his time within the Bitcoin mining business 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 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 expertise I had within the final swimming pools made me understand that we wanted a change within the mining pool business and we wanted it very, in a short time,” De La Torre advised Bitcoin Journal. “There is a very clear drawback with centralization in mining swimming pools in the present day, and I used to be capable of pinpoint that problem 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 ability 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,” stated 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 with regards to 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 response to De La Torre.
Energy To The Solo Miners
In response to this, De La Torre and his enterprise associate, Felippo Merli, launched DEMAND Pool in November 2023 with the intention of placing the ability 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 permits miners and swimming pools to speak instantly with one another, decreasing 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 aside from different mining pool protocols.
“Swimming pools in the present day are those who’re accountable for constructing the blocks and including the transactions into the blocks,” stated 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 in the present day 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 forms of transactions they embody 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 provides me much less energy. That is what I need. I do not need the ability. I am carried out with that energy,” stated 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 percentages 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 bought to warmth up your house throughout winter, proper? Why not simply use a Bitcoin miner as a heater?” stated De La Torre.
“In the event you’re fortunate, you hit a block and also you simply made your spouse very pleased,” he added with fun.
Solo miners who be part of DEMAND Pool can even have the choice to promote the hash price they produce on a market, making certain that they obtain some revenue for his or her efforts. DEMAND has arrange a take care of the hash price market Rigly and plans to ascertain extra partnerships.
De La Torre additionally touched on how DEMAND funds will likely be carried out by way of the PPLNS (Pay Per Final N Share) system. With PPLNS, income 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 method differs from the FPPS (Payment Pay Per Share) system, which is often used within the main mining swimming pools. With FPPS, miners cost a service charge 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 could sound enticing to miners to receives a commission constantly with FPPS, however he was fast to level out that payouts by way of each PPLNS and FPPS are comparable over the long run.
“Lots of people have some misunderstandings about PPLNS,” stated De La Torre.
“FPPS provides you fixed payouts, which is ok. I perceive why a miner would discover FPPS. Nonetheless, PPLNS over sufficient time averages out to about the identical,” he added.
“Sure, you will not have fixed payouts, however you’ll have incorrect payouts in response to how a lot hash price DEMAND has — and we intend to have a very good quantity. You’ll nonetheless be getting a relentless payout, or it might common out to kind of the identical. So, there isn’t any actual draw back to it.”
De La Torre additionally identified that solo mining as a part of DEMAND’s pool is likely one of the finest methods for Bitcoin fanatics to get their fingers on non-KYC bitcoin.
He additionally harassed the truth that solo miners’ coming on-line will do one thing else that’s important to protecting Bitcoin decentralized — it’s going to carry extra nodes on-line.
Ship Nodes
To make use of DEMAND’s block templates, miners must run their very own nodes. Because of this solo miners wouldn’t solely contribute to the decentralization of Bitcoin’s hash price but in addition to the decentralization of its governance.
“Not solely do we wish the solo group and the house mining group to flourish and to make more cash, however we additionally need node proliferation,” stated De La Torre.
“Solo miners will present hash price to safe the community and probably 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.
Trying Forward
De La Torre additionally stated that DEMAND is presently engaged on increasing its providers to pooled mining, and that DEMAND will actively be in search of 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 all the things in his energy to carry extra impartial 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 turning into a really severe problem, and it is as much as us because the mining group to do one thing about it,” stated De La Torre. “If we don’t, it’s not good.”