Bitcoin’s Grand Farce: Miners Pretend to Decentralize, Yet Still Hold the Purse Strings!

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What to know, dear reader, if you must:

Seven of the world’s grandest bitcoin mining pools, controlling nearly 75% of the global hashrate, have deigned to adopt the Stratum V2 protocol. Oh, the audacity of decentralization!
Stratum V2, in its infinite wisdom, allows individual miners-yes, those poor souls-to choose which transactions grace the new blocks. A revolution, or so they say, against the tyranny of pool operators.
This grand gesture comes as miners find themselves in a financial pickle, with a staggering 20% operating at a loss. Yet, the network difficulty and hashrate continue their relentless ascent.

Behold, the greatest show of decentralization since the last time they promised it! Seven of the mightiest pools have agreed to back the same open standard, all while maintaining their iron grip on the hashrate.

Foundry, AntPool, F2Pool, SpiderPool, MARA Pool, Block Inc, and DMND-names that strike fear into the hearts of the uninitiated-have joined the Stratum V2 working group. A truly historic moment, announced with great fanfare last week.

Stratum V2, an open-source protocol, dictates how mining pools communicate with their minions-er, individual miners. Its crowning achievement? Allowing miners to construct their own block templates. Oh, the power! The choice of transactions now rests with the miner, not the pool operator. How magnanimous of them.

Foundry, with its 34.2% hashrate, AntPool with 14.2%, F2Pool with 11.3%, and SpiderPool with 10.5%, alongside MARA Pool’s modest 4.7%, together control nearly 75% of all bitcoin hashrate. A truly decentralized affair, wouldn’t you say?

Under the old Stratum V1, the pool operators held the reins, deciding which transactions would grace the new blocks. A centralized nightmare, they cried! But fear not, for Stratum V2 has arrived to save the day-or so they would have you believe. It changes not the concentration of hashrate, mind you, only who gets to play kingmaker with the transactions.

A single pool controlling over 30% of hashrate? Less than ideal, they admit. But the real risk, they assure us, is the same pool deciding the transaction order. How reassuring.

This protocol, birthed in 2022 by Braiins and Spiral, had languished as a niche project until now. But with Foundry and AntPool on board, it has finally gained the attention it so desperately craved. A new phase of accelerated deployment, they proclaim. How thrilling.

And what of the miners? CoinShares estimates that up to 20% are currently unprofitable, with hashprice hovering at a mere $38.57 per petahash per second per day. Breakeven, at best, for those using mid-generation hardware. Yet, the difficulty is set to rise again on May 15, from 132.47T to 135.64T. The network hashrate now stands at a staggering 998 exahash per second. A true testament to their resilience-or folly.

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