Saving Bitcoin mining - Part two

From cooperative GPU mining to hashrate oligopolies

It all started in 2010, on Bitcoin Talk. A user with the nickname Slush posted an appeal to the community: miners using graphics cards were finding almost all the blocks, leaving those running the CPU of their home computer with nothing. The proposed solution was as simple as it was effective – pooling resources in what Slush called “cooperative mining”. From that idea came the mining pools, and from there began a process of progressive hashrate concentration that today represents, according to Gabriele Vernetti, the most underestimated vulnerability in the entire Bitcoin ecosystem.

Vernetti, maintainer of the Stratum V2 protocol and guest on the fourth episode of the Atlas21 podcast Quello che i Bitcoiner non dicono, traces this history to explain why the problem is not strictly technical but structurally political and economic.

The protocol that moves global hashrate

To understand where the risk lies, it helps to understand how Stratum V1 works – the communication protocol between miners and mining pools, proposed by Slush himself in 2012. Stratum defines the messages that machines – first GPUs, then ASICs – exchange with the centralised pool servers. It is the pool that builds the so-called block template: it picks transactions from the mempool, packages them into a candidate structure for the next block, and sends the mining job to all its clients spread around the world. Miners receive the work, compute hashes, and send solutions back to the pool. No individual machine knows the state of the Bitcoin network: that privilege belongs exclusively to the pool’s server.

“The entities that take transactions and package them into the block templates on which all the various miners then begin working are these mining pool servers. This means that when we open mempool.space and look at the blockchain and all the blocks that have been mined, 70% of those mined blocks contain transactions chosen by these five single entities.”

Censorship, empty blocks, and out-of-band payments

Opening mempool.space today reveals an uncomfortable reality: three pools cover more than 50% of global hashrate, and five reach 75%. Vernetti outlines the concrete scenarios this concentration makes possible. The first is transaction censorship: a government or regulatory agency can approach these companies and impose address blacklists. This is not hypothetical – similar episodes have already involved MARA Pool and, according to on-chain analysis, Antpool. The second scenario is more extreme: under pressure, pools could mine empty blocks, effectively halving the network’s transaction capacity at the expense of ordinary users.

To this is added a commercial opacity that Vernetti identifies in the fee mechanism. Some pools accept transactions directly from senders without broadcasting them to the network, collecting out-of-band payments. The result visible in block explorers is transactions with near-zero fees occupying block space, while the actual payment occurs through untraceable channels. A grey area that, according to Vernetti, represents a direct economic incentive to leave current arrangements unchanged.

What Stratum V2 changes

Stratum V2 was born from collaboration between the co-founders of Braiins and Matt Corallo, one of the most active Bitcoin Core developers. Its most discussed feature is the ability for each individual miner to build their own block template, using a Bitcoin node running directly in the mining farm. This shifts transaction selection from five large companies to thousands of operators distributed across different jurisdictions, making any form of coordinated censorship considerably harder.

The second improvement concerns communication security. Today, messages between miners and pools travel in plaintext – without encryption, like browsing the web without HTTPS. Anyone who intercepts the communication, from an ISP to a malicious actor, can read, analyse, or block the traffic. Vernetti describes a specific attack called hashrate hijacking: intercepting unencrypted packets and redirecting a small percentage of proof-of-work submissions to a third party, siphoning hashrate without the miner noticing.

“It is 2026, all our communications are encrypted. Why is Bitcoin mining not encrypted in a similar way? The same was true for communications between Bitcoin nodes. Two years ago, nodes finally began communicating with each other in an encrypted way. V2 proposes to do the same thing.”

The economic incentive for adoption

The main challenge for Stratum V2 is not technical but commercial: persuading profit-oriented companies to adopt a new protocol. Vernetti and his team have approached the problem by identifying measurable efficiency gains over V1. Reducing communication latency and increasing the number of valid proof-of-work submissions each machine can deliver per unit of time translates, with identical hardware and energy consumption, into higher revenues. It is on this ground – the direct economic incentive – that Stratum V2 aims to win over large pools and large operators, pairing the ideological argument for decentralisation with one that fits any business plan.

The road is long. Adoption by the largest pools requires time, resources, and willingness to act. The project is active, the protocol is open source, and its maintainers work daily to bring it to the maturity needed to become the industry standard.