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: “At present 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 just 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 palms 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 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 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 business and we wanted it very, in a short time,” De La Torre advised Bitcoin Journal. “There is a very clear downside with centralization in mining swimming pools at present, and I used to be capable of pinpoint that challenge 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 identify (it’s Antpool), and defined that such centralization has the ability to significantly harm 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 might ever do it, however the risk is there, which is already an enormous crimson flag,” he added.
De La Torre additionally identified that such ranges of centralization pose dangers in relation to 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 really clear and current hazard that we’ve got in Bitcoin proper now,” in line with 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 palms 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, 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 without doubt one of the main options that units Stratum V2 aside from different mining pool protocols.
“Swimming pools at present are those who’re in command of 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 of construct the blocks and add the transactions that they need.”
Most filtering in mining swimming pools at present 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 varieties 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 would like. I do not need the ability. 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 palms 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 come back on-line.
“You’ve obtained to warmth up your property throughout winter, proper? Why not simply use a Bitcoin miner as a heater?” mentioned De La Torre.
“If you happen to’re fortunate, you hit a block and also you simply made your spouse very completely satisfied,” he added with fun.
Solo miners who be a part of DEMAND Pool may even have the choice to promote the hash charge they produce on a market, making certain that they obtain some revenue for his or her efforts. DEMAND has arrange a cope with the hash charge market Rigly and plans to determine extra partnerships.
De La Torre additionally touched on how DEMAND funds might be finished by way of the PPLNS (Pay Per Final N Share) system. With PPLNS, income are allotted primarily based on the quantity blocks a mining pool mines per day and payouts fluctuate primarily based 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 payment primarily based 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 constantly 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. 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 line with how a lot hash charge DEMAND has — and we intend to have a superb quantity. You’ll nonetheless be getting a relentless payout, or it will common out to kind of the identical. So, there is no 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 greatest methods for Bitcoin lovers to get their palms on non-KYC bitcoin.
He additionally pressured the truth that solo miners’ coming on-line will do one thing else that’s very important to preserving Bitcoin decentralized — it can carry extra nodes on-line.
Ship Nodes
To make use of DEMAND’s block templates, miners should run their very own nodes. Because of this solo miners wouldn’t solely contribute to the decentralization of Bitcoin’s hash charge but additionally to the decentralization of its governance.
“Not solely do we would like the solo neighborhood and the house mining neighborhood to flourish and to earn more money, however we additionally need node proliferation,” mentioned De La Torre.
“Solo miners will present hash charge to safe the community and probably make some bitcoin and in addition assist with sustaining Bitcoin Core or no matter Bitcoin shopper 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 come back on board.
He’s vowed to make DEMAND a “secure 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 little thing in his energy to carry 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 turning into a really severe challenge, and it is as much as us because the mining neighborhood to do one thing about it,” mentioned De La Torre. “If we don’t, it’s not good.”
