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It is difficult to find a more fundamental threat to Bitcoin’s survival than the centralization of mining. If there are – say – only a few mining pools, there is a very real chance that these organizations will face regulatory pressures of the kind that exchanges have also faced: they could be forced to only accept KYC transactions in record blocks. Since resistance to censorship is arguably the core value proposition, I seriously doubt Bitcoin would have much long-term viability in this scenario at all.

That’s why it was great to see Ocean launch DATE (Decentralized Alternative Templates for Universal Mining) this weekend. same as Stratum V2 (implemented by Demand Pool), DATUM allows miners (or: “hashers”) to select the transactions to include in the blocks they find, while still sharing the block reward with other users of the pool. In other words, hashers get the benefit of pooled mining without having to outsource transaction selection to the Ocean pool operators, making it harder to enforce regulations. (It is much easier to regulate a few large companies – mining pools – in a handful of jurisdictions than it is to regulate many smaller companies and individuals – hashers – from around the world.)

Of course, the hostile mindset will see that this in itself does not solve the problem of mining centralization in its entirety. The most obvious is that draconian lawmakers could eventually ban this type of pooled mining altogether. Furthermore, it’s not really clear that there’s any demand at all from hashers to construct their own blocks – although that could of course change quickly if and when there is actual regulatory pressure preventing pools from including certain transactions in blocks. (And Ocean is encouraging hashers to select their own transactions by lowering fees for those who use the new feature.)

Regardless, DATE is an important step in the right direction. In any case, it would alleviate a lot of the concerns of Ocean itself who refuses to include certain “spam” transactions in their blocks: now each hasher can decide for himself which transactions he wants to include and which not.

The harder it is to thwart Bitcoin’s censorship resistance, the brighter Bitcoin’s future looks.

By newadx4

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