You guys have been working on Stratom v2 for a while, so clearly it's important to you.
Why is the majority of the network still not using it?
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All right, everyone. Welcome back to HashrateUp.
Another week, another episode.
Before we get into it, I want to quickly share my screen and show you guys when we are recording.
We're co-recording at 932-377 block height.
And then one thing I have been loving to look at is the timechaincalendar.com, if you haven't seen this before,
which tells us that currently hashrate is at 1020 and the average block time is at 10 minutes 32.
and we're about 54 blocks too slow right now, which is significant.
If you look at the difficulty over the last couple weeks,
then something very historically is happening or historically very seldom is happening
where we have one, two, three difficulty adjustments downward.
Then this one was slightly up, but to be honest, it was pretty stagnant.
Then we have another one down, another difficulty adjustment down.
And then the next one is expected to be minus 5% right now.
So that's significant as well.
The impact there, and I want to go a bit longer on this,
is that if you price the hash price in Bitcoin terms,
then we're talking about one bump upwards, another bump upwards, another one.
Then it will stagnate, as I said, another bump upwards,
and then we're going to get another bump.
So we're going to be in the sort of 45,000 sets per terahash per day range.
And then, yeah, I mean, this is historically,
in historical context, it's nothing.
But if you sort of look a couple months back,
then it's actually quite significant.
But without further ado, let us jump in the interview.
Today, we're going to talk about Stratum v2.
and I've been made aware by my lovely guests Pavel and Gabriel
that a bunch of interviews have been done on Stratum V2 and Stratum V1.
So if you want to learn about that comparison directly,
go out there and learn about that somewhere else.
I have Pavel on.
He said he's janitor and PM at Stratum V2
and Gabriel as well, lead maintainer,
as Stratum V2 is an open-source project.
Now, first question to you guys.
You guys have been working on Stratum V2 for a while.
So clearly it's important to you, right?
Why is the majority of the network still not using it?
I don't know who wants to go first, Pavel.
Maybe you go first.
I've been working on Stratum V2 for four years now,
maybe even a little bit more.
Short answer is that miners are busy.
They are in a cutthroat business trying to keep machines online,
trying to find cheaper energy, trying to optimize and tweak setups,
and they just don't have time to learn about these upgrades.
Another thing is that maybe we as an open source project and community
haven't really found the proper way to talk to them about this
because we approach it from a very technical aspect of all of these improvements
for a few years while we were developing it.
And as we became miners ourselves in a way, got connected to miners,
We understood how miners think, what do they want.
I can talk about myself.
I come from the payment processing BTC-based server.
So I came into mining completely new.
It took me a couple of years to understand the mind of a miner
and what is it really important for them.
So I think short answer is like education hasn't been maybe the best on our end
and miners are just busy.
That's, I think, my take on it.
Gabriel, anything to add there?
No, I completely agree with all the points.
but mate i would just add that on top of what he said it's always difficult like to change
something which is at the core of like a business like bitcoin mining so like upgrading the the
core protocol which is currently used by anyone is like it takes a lot of time okay especially for
for big companies to take decisions okay maybe maybe explain that quickly because i don't
understand that why why would the core protocol have to be upgraded explain that context
so basically nowadays like 99 of the asset of the global bitcoin network is currently using
a protocol which is called just stratum we're gonna call it stratum v1 for now
which is basically allowing all the machines spread all over the world to be connected to
some central points, which are the pool servers, so that the lack of finding a block is going to
be shared among different participants in the pool. And in order to do that, the machines and
the pool servers, which are hosted somewhere else, they need to communicate in a proper way.
And nowadays, they are using this protocol, as I mentioned, Stratum v1. And so it means that all
the machines they know the stratum v1 language in a way to be able to communicate with the pool
servers and the pool servers they do the same so they they have the implementation there which is
based on stratum v1 protocol so even though switching to sv2 doesn't require like firmware
upgrades on miners end maybe we're gonna dive deeper into this detail later it means that
on the pool level, the pool servers, they need to be upgraded to use this new protocol,
which is Sv2, Strading V2.
So that's what I was referring to.
Yeah, makes sense.
I mean, and then we're quickly talking about financial gains, right?
Before incentives and game theory and anything that makes Bitcoin work at its core, right?
Before we get there, though, is there anybody that loses power or anybody that loses
financial gain if stratum v2 were to be widely adopted tomorrow like who loses out on that trade
so i don't think anybody loses like stratum v2 is an upgrade of a mining protocol that has been
used since 2011 since 2011 mining industry evolved a lot and we are still using a protocol which was
made from the very like 10 years ago completely unoptimized completely insecure so like i don't
think anybody would lose from adopting a more efficient a more private more secure protocol and
consequentially a protocol that brings them more money i don't think anybody would be losing here
of course there is a little bit of technical effort required that gab already mentioned
to get this adopted and pushed through.
So the only losers, in my opinion,
will be the ones that are still using SV1
as soon as the SV2 gets adopted.
Miners that are not upgrading,
miners that are not learning on time,
not educating themselves,
it will take them way more time
to upgrade to a new protocol
than to ones that we are talking to.
And we are talking to a dozen of miners,
like pools, firmware developers, manufacturers.
Like for years, we've been talking to them.
All of us are collaborating in a way together to better understand ecosystem and what is needed and how to overcome all of these inefficiencies that we have.
So only losers will be the ones that will be left behind because I think it is inevitable that industry that has matured, industry that has reached insane hash rate volumes as well, will inevitably move to SV2.
and miners that are not educated and don't know anything about it will be left behind and it will
take them weeks months for some even years to become aware of it and they will probably
end up in in oblivion in my way in my opinion when when things start getting traction okay um
all right so tell talk to me about the problems that it solves like how if if i were to adopt
stratum v2 as a pool um tomorrow how does it make me more money yeah that that's a good question um
um stratum v2 i can talk a little bit of like more generic uh talking points and then gabo can
maybe elaborate on any technicalities fun fact gabo is probably the only person in the world that
has a master thesis specifically for stratum v2 so if anybody here wants to read it it's
available in English, Gabo, right, as well, from what I remember.
So Stratum v2 master thesis by Gabriele is online.
So yeah, Stratum v2 is a more efficient protocol.
It has a binary format, which eliminates unnecessary messages and removes JSON serialization overhead
used in Stratum v1.
Basically, it is way lighter over the wire.
So like there is data transfers are way more efficient.
I will give you a concrete example.
All of this sounds maybe a little bit more technical, but what does that mean for a pool?
For a pool, that means 60% less bandwidth consumption.
And bandwidth consumption, from what I became aware, is like second biggest cost of running a pool.
So reducing that cost to 60% is a pretty good incentive to adopt something.
And then in a certain configuration, miners themselves can reduce bandwidth up to 70% just from these basic protocol properties because it's lighter and better over the wire.
So imagine you're a miner in a bandwidth constrained environment running somewhere remote and then you save 70% of bandwidth.
I think that's a pretty big win.
So these are like very obvious technical advantages of Stratum V2.
I have a follow-up question, right?
A lot of, I mean, my company evolves around bringing more hashrate to Africa.
And I think with sort of AI craze and all of that stuff,
we're going to see hash rate, hash price compression.
We're going to see a lot of people move to sort of fringe mining,
what I like to call, you know, bush mining somewhere remote
with a Starlink or whatever, right?
So I think we're going to see a lot more like that
somewhere in the middle of nowhere in Nigeria
on some sort of GSM connection.
So I can understand the benefits there.
If I had a remote setup, right?
Talk to me how I would practically now adopt strategy too.
Like what does that actually look like?
I have, I don't know, 100 machines running in a container somewhere.
Like, how do I actually use the protocol?
That is to me isn't clear.
Yeah, I can pick this one or maybe if I want to go ahead.
Go, Gabo.
I will fill it in if there is anything missing.
Go ahead.
Yeah, earlier in my previous answer, I mentioned briefly a way for which there is no need for the remote place,
for the miner to upgrade the firmware of the machines.
And that's because we have a component in the SRI ecosystem,
which is called translator proxy.
So this translator proxy allows all your machine, in this case,
which are speaking natively, just Stratton V1,
to be able to connect to an SV2 pool server, to an SV2 endpoint.
because what it does, it's just a proxy that you have to run
like on a mini PC or like a Raspberry Pi also eventually
in the mining site, in the mining farm itself.
And this proxy is just going to do the translation.
So basically the machines, they can also not like upgrade the firmware
to be able to speak SV2.
They just need to pass through this translator proxy
and they will be able to connect to an SV2 pool.
getting in this case all the benefits that that pub was was mentioning earlier in terms of bandwidth
reduction and and uh security all right that clear that makes sense okay and then i need to connect to a pool that speaks Stratum v2 as well right So it machine translator proxy
all the traffic between the machine
and that proxy gets translated to v2,
all the bullshit gets filtered out,
and then you send the hash rate
to a Stratum v2 server or pool
that'll then make use of all that traffic
and reward you for any work that you're sending.
Okay.
Now, there are benefits along the way as well.
That is the extent to which I am clued up about V2,
that there's a potential of hijacking the hash rate,
which V2 eliminates and stuff like that.
Before you answer that or confirm that,
maybe tell me what pools can I choose from today?
What pools are out there that I can connect to
from that translator proxy?
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Yeah, so just to put things into perspective, Stratum v2 is a protocol.
Then you have different implementations of the protocol.
We have currently two implementations of Stratum v2.
One is by Brains and one is SRI, which is open source, community governed, completely free to use MIT license implementation of Stratum v2 in Rust.
We collaborate with Brains.
We recently formed a working group.
So all of us together are working on having, in a way, convention how protocols should work.
So I just wanted to put that into perspective before I move into the rest of your question.
So Brains was actually the first company that implemented Stratum V2 in production.
It's been live in their pool for, I think, already three to four years.
They brag with efficiency gains and all this other stuff that Stratum V2 brings.
They are just missing the component, which we call the job declarator, which allows miners to construct their own templates.
So this is one part that Brains still hasn't implemented into their own implementation.
Speaking of our open source implementation, it's available and can be used today.
So today we have Brains.
We have Demand Pool recently opened up and launched for Stratum V2.
Big miners, I would say.
So they are targeting businesses.
it seems first to get a hash rate so that then it will make economical sense for smaller miners to
to jump in so they are prioritizing i think uh larger miners publicly traded miners so they are
focused on you know various compliance and all of these things that uh publicly traded miners require
and then yes exactly exactly so they are focused on onboarding uh i would say like larger amount
of hash rate publicly traded hash rate and then they will focus on smaller miners hopefully
and open the gates for that.
But I guess they are startup trying to onboard people one step at a time.
So they are actually using our implementation SRI,
open source implementation demand.
And then we also have, we earlier mentioned that miners do not need
to update their firmware to use Stratum V2.
So in order to connect to Stratum V2 pool,
you can use something called translation proxy.
However, recently a company named Oradin,
I'm sure you guys know about them.
they launched the stratum v2 compatibility on all of their miners through their flux os
so all of their miners are natively supporting stratum v2 what does that mean well that means
that you no longer need this proxy in order to connect to stratum v2 pool and that also helps
with end-to-end encryption meaning that communication from the miner itself to the pool is all the way
end-to-end encrypted so i would also like to encourage any miners to give oradin a try as
well since they are really pushing hard on innovation and it has been great collaborating
with them they're also part of our working group which aims to accelerate stratum v2 as a public
good protocol very cool right i lost my point as to where i was before hold on let me mark we were
talking about advantages i guess i was talking about efficiencies then we got sidetracked a little
bit. So if you want, we can talk a little bit more. I covered bandwidth efficiencies, but I think there
are a few more bullet points that will be important for miners on Y. Because Stratton V2 is way more...
I want to say for a while, we tried to push Stratton V2 as this miners are constructing templates
protocol, and a lot of miners don't really care about that. However, Stratton V2 brings in, as I
As I already explained, like a lot of efficiency improvements.
I did mention like 60% bandwidth reduction for the pool, 70% for miners in certain configuration.
But there is like a few more bullet points that, for example, Stratum V2 nearly eliminates
stale shares because the node is running in certain configurations.
For example, when a miner is doing template selection, creation, sorry, they are running
node at their own farm, so it removes a lot of latency there.
So Gabo has been doing a lot of benchmarking recently.
Maybe he can explain a little bit better how all of this works.
But like very simply said, traditionally, up to 2% of shares that the miners submit
to the pool are rejected for some reason.
Most of the out of these 2%, only I think 0.2% are actually valid rejections,
which means that it was rejected by the pool because difficulty was lower than the pool wanted.
And then you're left with this number of shares that are lost simply because of latency.
So by running a node closer to the mining farm, these latencies nearly eliminated with Stratum V2.
So you are actually getting paid more because you have more shares submitted that are accepted and valid by the pool itself.
then lower latency also means that you can start working on a template quicker you can start
capturing more transaction fees and I will stop there because Gabo has created a benchmarking tool
which is completely open source which any miner can run maybe he can explain how we measured all
of these concretely and then we can maybe go into security privacy there is like there is a lot of
talking points which I really hope we can explain in this podcast because I don't think we've been
doing a good enough job at elaborating
to miners and your podcast
is like one of the best if not the best
out there and a lot of miners listen to you
so I care that we
clarify all these talking points
one by one. I'll clip what you just said
to make sure everybody sees it as a short
as well. Cabo go.
Sure so yeah Pav mentioned
this benchmarking tool which I
worked on during last year
and so you can find it
on our GitHub
organization.
It's open source and can be run by anyone very easily.
So what it does, it's basically packaging all the components necessary to run an SV1
pool or an SV2 pool with all the translation proxy and all the components that we mentioned
earlier.
So the way it works is that between all of these components, we have some sniffers and
some monitoring tools and some measurement tools which like measure for example the time which
takes for a miner to receive a new job from the pool for example and so by doing that in the sv1
context in the s1 side of the tool itself and on the sv2 we can do comparisons so you what you are
going to see after like some minutes of like connecting miners to to this tool is going to be
a dashboard a graphana dashboard with all these metrics so for example you're going to see like
the time it takes to receive a job from the from the pool for the sb1 connection and for the sb2
connection so you're going to notice that the latency there uh is going to be reduced when
using sb2 that's just one one one simple method you say succinctly why the latency is less
it's uh so if it depends on the configuration so in the simplest one where the miner is not
constructing any template the miner is working on jobs which are selected by the pool as nowadays
the latency improvement there is just due because of the bandwidth and the efficiency gains of the protocol.
So earlier we mentioned that the current Strading V1 protocol,
it uses basically JSON for transmitting messages and communicating with the miners from the pool.
Strading V2, it uses a binary encoding.
so it means that like the same amount of data which has to be transmitted from the pool to the
which is like the mining job in this case it's going to take less time to be transmitted over
the wire that's because the framing so the way the packet the network packet is constructed
is going to require less space because of the binary framing which is making this more efficient
but in the configuration which is like the most interesting one that we are aiming to like
be widely adopted by by majority of miners which is the one where the miner itself is constructing
the block templates its own jobs and it's not relying anymore on the pool server to do that
in that case the latency to get the job is nearly zero because you as a miner you're running this
bitcoin node in your mining site in your mining farm and as soon as like a new block is found for
example in the network you're gonna be notified by the bitcoin node itself which is like there you
know like together with the machines so like the machines are gonna start working on the next job
right right after that why i guess if you rely on the pool yeah the pool has to notify you
Sorry to interrupt you.
Yeah, okay, that makes perfect sense.
Now, let's say I was running a node very remotely, right?
Now I'm still limited by the connection of the node
to make sure that I'm working on the most up-to-date jobs.
And I guess a 10-minute time frame is a lot longer
than what I work with if I don't build block templates myself.
Is that correct?
Sure.
so like connection internet connection status on your site is crucial for for deciding like
what to do in this case yeah if you're like in a very remote place and you know that like a bitcoin
node could be like uh not well connected because of very very poor internet connection
it's probably best for you to rely on the pool jobs in this case yeah uh in both cases i would
say that sv2 brings enhancements because in both cases you're gonna save a ton of bandwidth so if
you are in a remote place and you have poor internet connection as we are saying now you would
you would get like benefits in both cases because like your communications with the external pool
server is going to be reduced the bandwidth used there is going to be way way more less
than now it's currently.
Okay.
Should we talk about the privacy aspects, Pebble?
Yeah.
To understand why SV2 bring privacy aspect,
we have to understand that currently all SV1 miners
are basically running over unencrypted connections,
which is a security risk.
So I will very quickly explain security enhancements
because what we did, first thing that was suggested for a new protocol
is to be actually encrypted because, hello, we are in 2026 now
and basically running an entire multi-billion dollar industry
on top of an encrypted connection is ridiculous.
So Stratton V2 uses the same cryptographic primitives as used in Signal and WhatsApp and it encrypts connections meaning that the hashrate cannot be intercepted
Currently in SV1, it is a very common attack that an attacker sits on top of your network, listens and tries to probe.
and when they manage to intercept the connection,
they usually reroute a portion of your hash rate
because they don't want to do it entirely
because you were quickly noticed.
So what they do is take 1%, 2%, 5%, 10%.
I got confirmation from any pool
that they will unlikely notice very quickly
even if it was after 20%, 30%,
which is pretty scary that somebody can steal.
This is basically 100% of your profitability,
just like steal your hash rate.
So by encrypting connection,
we are making sure that this doesn't happen.
Also, so that's like man-in-the-mill attack prevention.
We also protect you
from the internet service provider themselves, right?
Because unencrypted connections can very easily be scanned
so they can see what is going on.
Your ISP is actually a huge attack vector
that I don't think anybody's talking about,
but like they are even able to calculate your how much money you're making based all of these
messages like they can reverse engineer a lot of these things so a very skilled uh attacker can
really harm your business so just doing a basic encryption ensures that your profitability as a
is uh safe and then in terms of security strutton v2 ensures that there is no out-of-band payment
because if you as a miner are constructing templates yourself,
then hell no, pool cannot get paid for transactions that are not included
because you are aware what is included.
You are sure that the hash rate that you provided
is actually the ones that is used for certain things.
So it prevents pool getting out-of-band payments for out-of-band transactions.
And that means that basically all of this encryption helps,
as I said, reduce, for example, ISP,
ice dropping your connection,
protecting you from somebody trying to learn
how much money you have,
which for certain type of miners is very important.
We have miners running in very,
I would say politically unsecure environments
where regulations are unclear
and their privacy there is probably important.
However, most of them are not even aware of this.
So on an education level,
we need to do better job to explain that like yeah you may be running in a basement but like
your isp can actually spy on you and like if somebody really wanted to to find you they will
yeah but i mean that that if by extension also makes the network um more likely to be more
decentralized right if more people um have feel like they have less eyes on them and can run
machines in jurisdictions where it's maybe illegal to do so right it might propel them to do it more
because now they have more security there.
That makes sense.
Yeah, absolutely.
Okay, so with the time that we have left,
I wanted to harp on a few more points.
Block template creation has come up.
That's usually a prompter for people like me
to ask you about Datum and Ocean.
I understand with Datum, you can do that as well,
but then you're locked into the Ocean pool.
You can't really switch.
So a question there for me would be
if I were to create my own block templates with v2.
Again, you mentioned brains earlier,
which leads me to a follow-up question,
but is there any other pool?
I know demand pool also works on stratum v2.
What other options do I have?
Yeah, currently demand is probably the option to use.
However, you need to be like, you know,
miner that is willing to do KYB with them.
We are working on our end as an open source implementation
to allow miners to deploy pools easily
themselves. So in our configurations, like Miner can deploy pool over Docker, a very basic one.
However, if you wanted to, we are working on that. And the other pool, basically projects,
I don't know, like BraidPool or P2P pool, they can all benefit from Stratum v2 because they can
utilize the communication protocol of it when the time is right for adopting something like that.
I just wanted to get that one clear because I think there is a lot of misconceptions on social
media and there is a lot of well people try to make like this bad blood between ocean and us so
i will just quickly explain the differences so what ocean did is early on even before they made
datum we had a group we communicated together how can we resolve this they wanted to adopt stratum
v2 however they internally came up with a new new protocol basically called datum which
is strictly focused uh focused on you know miners like the templates um they did it in a way that
they don't have to do any upgrades to Bitcoin Core.
So basically, they made a protocol which works for that time.
And they were able, as a venture-backed startup, to gather some hash rate and start using and
mining blocks.
Because at the end of the day, the only metric that matters how something is adopted is amount
of mined blocks, right?
And currently, Ocean, kudos to them.
They are currently doing a good job.
However, Datum Protocol just focuses on template selection.
It doesn't focus on security.
It is not as nearly as efficient as Stratum V2.
It doesn't bring all of these benefits that we talked about.
And I talked to Luke.
I talked to Mechanic.
They said, when Stratum V2 becomes implemented, we will happily, as a pool, adopt it if our clients want it.
So I think there is this unhealthy competition being made, which is probably good.
These days, drama makes marketing.
So I think for both projects, it was okay.
But I just want to elaborate on the differences.
So first and foremost, Stratum V2 is an open source, independent protocol.
There is no single company funding it.
There is six of us working on it, and it's like five entities funding it.
So we try to have this distributed funding in a way, ensuring that no single entity has control over our implementation.
Are they public?
Absolutely.
You can go to stratumprotocol.org and you can see, and I can even tell you who they are,
but I'm not sure how much time we have.
But yeah, all of this is public.
Our calls are public.
You can join our dev calls.
All of this is made in the open.
We are developing Stratton V2
as a public good for miners.
We believe that open source infrastructure is critical
and six of us currently are doing our best
to make that work.
So Stratton V2 has both client and server implementation.
I am not aware that Ocean has open source, for example, pool implementation.
I already said that Stratton V2 is more efficient.
Ocean still uses get block templates, which are horrible.
Stratton V2 has pushed based templates.
So that means the template is sent immediately to you when the block is found.
You're not trying to pull them.
And so there is a lot of efficiency enhancements there.
I'm not sure how much.
Yeah, yeah, yeah.
So Datum is great for current protocol.
Unfortunately, current protocol is so bad that I really don't see.
It's very unrealistic to expect that it will remain adopted
because things are moving on.
Miners are in a cutthroat business.
It's a race for excellence.
Everybody wants more efficiency.
Everybody are trying to get more energy.
But at the end of the day, with very simple software tweaks, you will be able to squeeze more profitability.
And once miners realize that, it will be a no-brainer.
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So one thing that Gavo said earlier that we talked about was the stale shares, right?
and I mean anybody in a hosted environment
any miner that's struggling with compressed margins
that's not being paid for 2% of the work
that's like an extra pool fee basically
you pay 2% fee on the pool
and then you pay another 2% of work
that's not counted towards your balance
even though you expanded energy to create those shares
and they get registered by the pool
but they don't get counted towards your revenue
because they, I don't know, for some reason
are not counted, right?
and I think is that maybe so if we sort of talk about the future of v2 I mean yes you guys have
funders they're open source cool I understand that um but that's in my in my mind is not a
um highly sustainable um business model or or model for the future right you can't rely on
always having funders um and I understand look Bitcoin Core has been open source funded for for
longest time now however there i have the assurance that even without maintenance you know the the
protocol works and can be used yes it needs maintenance but it's not a do or die situation
if tomorrow funding dried up and you guys are not paid anymore you guys have families um and you need
to feed yourselves right so then you move on to other things um and v2 i would say is not in a
stage where it sort of carries itself right so is there um is there maybe a lack of or is there room
for for the project to adopt better marketing and say like yo these are the these are the benefits
of adoption of v2 you know less stale shares what does that actually mean to your to your bottom
line as a miner to get more people on that bandwagon and push it up their priority list
because as you said in the beginning,
it's just not where it needs to be
and miners are quote-unquote too busy to adopt it.
What do you think?
So I guess your question is,
how does the project sustain financially?
Are there any risks there if all of us got hit by a bus?
What does it happen?
Well, it's published.
First and foremost, it's published on GitHub.
If all of us leave the project tomorrow,
MIT license, anybody can fork it
and keep improving it if their business depends on it.
So I don't think that's a very realistic argument.
Second of all, I've been doing open source for nine years now, full time in Bitcoin.
I worked first two and a half years for absolutely zero.
So for me, this is mission and it will continue to be a mission.
And I'm sure for Gabo as well, like for all of us, this is a mission because we deeply care about Bitcoin.
And I think that mining is a deeply underserved area, deeply undervalued.
And I think there is a lot of improvements that can be made of having an open source infrastructure for all of these companies to build and innovate on.
Because with Stratum V2, we have a set of modular libraries.
So basically any company can now come and start building on top of these.
They can build innovative products.
So they spend more time on building innovation versus chasing compatibility problems.
Because what happened with SV1 is like everybody kept ripping off each other.
There were no specifications.
I make this, you try to reverse engineer it, and then we have compatibility issues.
So now my engineering team needs to spend like three weeks trying to figure out what's wrong
instead of like we have clear set of specifications here of how things should work.
So, you know, we have more time to innovate.
I really don't think that like, I think the model we currently have is great.
I would love if there were more miners there to support us.
But I am pretty sure that once they see the value of this and their business start using it, they will be financially incentivized as well to support open source or to become involved.
Because we had miners, we had mining companies that sent their own employees to help work on Stratum V2.
And just one more thing, we have 47 contributors until this day working on one of the main repos.
so i don't think like you know passion will dry up and like i don't think uh you know people can
build their careers people move on so it's more about the money you know i mean 40 hash price
impacts everybody uh and that means there's less money in mining so what i'm saying is the risk is
that open source funding over time dries up um yeah but like you know exactly what you like it's
it's getting harder and harder to to make profit in mining and like with these small tweaks miners
miners will unlock possibilities to make more money.
And then they will be incentivized to either send their people to contribute to the main project or they will just find somebody and give them a grant because there is a lot a company can gain by providing a grant I don think it fair to say oh it just marketing
Oh, it's just like we are throwing money.
No, you are a financially responsible company if you support open source
because it's in a way R&D for you.
You get a lot of benefits from it.
You know, you're not actually, you're like directly connected with the infrastructure your business relies on.
So I think it's pretty incentivized.
I think it's aligned and I don't think, you know, it will dry up.
I think as Bitcoin continues to grow, we can only see more of this and we can see more contributors coming in.
Yeah.
Okay.
Now I have one more question around primary pools that I wrote down earlier.
When you mentioned Brains, you mentioned that Brains doesn't have the job declaration feature yet.
And from what I understood, and please correct me if it's entirely wrong, because it's a very complicated topic for me to wrap my head around.
For any miner to adopt V2, they need to have an endpoint being a pool that also adopts V2, correct?
So now I'm thinking, okay, like if you see Luxa pool, Brains pool, all these big pools,
um they tend to occasionally also use bigger primary pools to offload their hash rate too
if you know they they run the risk of having a bad luck streak and stuff like that right
so let's let's say um um brains were to adopt this doesn't mean that they if they let the
miner create the block templates right doesn't that automatically also mean that they cannot
sell the hash rate to a primary pool and lose that optionality?
Do you know what that means? Does that make sense?
Yeah, I think I got it. I think the answer is that they can keep doing it eventually.
Because when you're mining as a miner in a pool, the reward is typically being assigned to the pool
or to the address or the coinbase transaction which is built by the pool so you as a miner
you are constructing the template so you are doing the so-called transaction selection
from the main pool of your knot but then where the money goes it that that that thing is decided
by the pool because like that's what the pool uh typically does so that that doesn't change
with sv2 it always gonna be depend on the pool itself so let's say maybe the way the way i'm just
sorry sorry maybe i didn't understand uh maybe i don't understand what you're saying let me let me
rephrase my question right so if i'm the pool and i send you jobs and i want to have the optionality
of selling the hash rate that you send me to and pool right um but now i let you do the job
declaration will end pools still buy that hash rate yeah i think the to to properly reason about
this we have like to to be aligned on the way these pools these these smaller pools are sometimes
selling the ashrate to another big bigger one the way i see it is that they are selling it
by redirecting the money which are collected in the block which is the the block reward to them
that's the way they are selling it okay uh and this part the block reward coinbase transaction
is decided by the pool itself so also in the job declaration mod which is the configuration where
the miners select the transactions from the node, the pool is always the point, the entity which
is going to decide where the money is going to be collected, basically the Coinbase transaction.
So there's no difference with regards to that. It's not a protocol thing per se. It's something
decided by the pool so for example like now ocean that doesn't do that because ocean like
read redistributes majority of the block reward to the miners right directly into the coinbase
transaction but it's like a business decision decision they made on top on top of a protocol
yeah i guess i guess what the pools do give up though is um so the pools if they let you
you decide what goes into the um into the templates there is of course there's game theory
right miners want to make as much money as possible so they're always going to choose the
highest fee transaction but there is room for miners to make mistakes there you know and then
the pool gives up that revenue uh from the fees i guess if they let somebody else decide
and that's a risk on them, right?
But that's potentially a weakness of letting the miner,
if I'm the pool, it's a downside for me
to let the miner decide what transactions go in
because it reduces my total revenue potentially
if they make mistakes.
Yeah, yeah, that's a good point.
This point has been discussed for a while now.
I think the answer is something similar to what the demand guys did, which is designing a payout mechanism.
In their case, the name is Slice, which pays the miner accordingly to the amount of fees, transaction fees, which they are collecting.
so for example if we are if we are two miners and we are mining let's say with the path pool
and we are building our block templates let's say i'm collecting in my block template one bitcoin
as transaction fees while you you want to to create like a bad template and you are collecting
like 1000 sats instead of one bitcoin you uh since you are working on a template which is like
getting less money than me you are gonna proportionally be paid less from the pool than me
because like the amount of value that you are creating for the the entire pool itself is less
than mine and like the slice payout mechanism which i mentioned earlier which is like formalized
uh by the demand guys demand pool guys uh is is basically doing that allowing for that
all right sounds good guys we're running out of time unfortunately and we'll have to do a follow-up
to this i want to do a quick round of rapid fire if you don't mind um i'm going to ask you um
question and then first pavel answers very briefly and then gabo you go if you have a good answer okay
all right number one stratum v2 in one word how do you describe it
future
optimization biggest myth about stratum v2 bubble
oh uh there are way too many uh i think one of the biggest ones is that it is controlled by brains
for some reason i was called brains spy for years and years until and i have never even uh yeah been
or I know them, but I never really was very close with brains.
But yeah, it is just like to debate that one.
It's like completely public good developed by multiple entities,
by a working group these days.
And it's really a public group, open source specification
and infrastructure for any miners to build on innovation
and products on top of.
Gabriel, quick answer, biggest myth about strategy two.
Mine was the same, but I recently started to see
like the same thing, but not with brains, but with Bitcoin Core.
I don't know why.
Yeah, Bitcoin Core versus NOS.
There's another discussion.
Hardest thing to explain to miners, Favo?
In context of Stratum V2 is that very small software tweaks can unlock more profitability.
We've done a case study that maybe we can link in the show notes.
Maybe, Jesse, you can do that.
But basically, one of our starting points there is to prove that miners can earn at least, I think it was 7.4% more with Stratum V2, which in a competitive race is quite a lot.
And we were pretty conservative there, I must say, in our assumptions.
And we tested it on our non-production ready applications at that time.
And we will continue doing these benchmarks.
And as Gabo said, this tool is also open source, so any miners can deploy it, run it constantly and just see how much more efficiency they can squeeze with Stratton V2.
Gabo, what's the hardest thing to explain to miners about V2?
I think the same. So the efficiency gains, that's why we built the tool and we did the study.
But also the security benefits of it. How much important is security in the mining scenario?
All right, last one.
Pavel, what kills Stratumv2?
Oh, I would say that lack of adoption can kill it.
Not having a block maybe next time when we speak.
Jesse, if Stratumv2 block hasn't appeared on mainnet,
then maybe it means that we are doing something wrong.
However, just knowing a little bit behind the scenes
and all the adopters that we are talking to,
I'm pretty confident that Stratum v2 will be a different story than the one kill.
I think next time we speak, it will probably be a race to adopt Stratum v2.
And maybe I will not even have time to talk with you because we'll have to talk to all of these miners and try to educate them and explain them how they can implement things.
But yeah, maybe lack of education can be a critical factor.
And I think we as an open source project understand the value of that.
And we are doubling down on education in recent years.
And maybe like last year, we did a lot,
doing a lot of conferences, a lot of podcasts.
So also thank you to you for inviting us
because it is important to keep spreading education
and talking points, which is critical, I think, for adoption.
All right.
Is there anything, guys, that I have not asked
that you wanted to explain?
Well, we talked a little bit on adoption side.
I mentioned that like already in brains, I forgot to mention that Proto is also announced publicly,
you know, launching compatibility on Stratum v2.
Demand has recently opened their pool for miners.
We have several more, which are even public.
I don't want to mention anybody by name because mine.
Like one more thing I want to say is like when we work with early adopters as an open source project,
we really try to be privacy minded.
We don't want to, we don't spread around like who is testing it, who is using it,
because we understand that mining is a very competitive business
and we as an open source community really approach it carefully.
So if there are any miners that are considering Stratum V2,
implementing it or need help, feel free to reach out to us.
We as a community are always open to help you.
Website is stratumprotocol.org.
We have Discord where you can come ask questions publicly
or reach out to us privately.
We do respect the privacy of all the adopters.
all right Gabor anything from you that we haven't covered
I think we covered a lot of stuff
of course we have a ton of resources
as we mentioned at the beginning of this podcast
so we are collecting
some of them
in our website which is stratumprotocol.org
then check out
also our github repositories
and yeah
I think it was
like a very big opportunity for us
to share some more knowledge about SV2
and hopefully we demystified some myths as well so yeah thanks thanks jesse again for that for sure
no absolutely my guys thank you so much for your time and and explaining things to me and my
audience absolutely appreciate it um this were pavel and gabbo gabriel from stratum v2 feel free
to reach out we're gonna leave a list of resources in the show notes for sure for you to check out
later and yeah i hope you learned something new i know i did so i'll see you next time thank you bye