Ocean will offer payments directly from the block reward to miners. Luke Dashjr is co-founder of the startup that aims to “decentralize mining.” Jack Dorsey among the parters. Giacomo Zucco, project advisor, to Atlas21: “StratumV2 will be implemented in the future.”
We are launching as the most transparent pool and also the only non-custodial pool where miners are the recipients of new block rewards directly.
That’s how Bitcoin developer Luke Dashjr describes Ocean during an announcement on Tuesday, Nov. 28 held as part of the Future of Bitcoin Mining Conference. The event took place in South Carolina, in the shadows of a 150-year-old hydroelectric dam that Barefoot Mining has repurposed to harness excess electricity.
Jack Dorsey: “Ocean solves pool centralization.”
Barefoot Mining itself will be Ocean’s first customer. The new pool project will be run by Mummolin, Inc, a startup co-founded by Luke Dashjr and entrepreneur Mark Artymko that has the stated goal of “decentralizing Bitcoin mining.” To launch Ocean, Mummolin raised $6.2 million in a seed round led by Twitter and Square co-founder Jack Dorsey, Accomplice, Barefoot Bitcoin Fund, MoonKite, New Layer Capital, Bitcoin Opportunity Fund and other partners.
“Our contribution to Ocean comes out of a deep respect for their mission” said Jack Dorsey. “Ocean is solving a problem for bitcoiners that I think all of us feel—further centralization of mining pools that could plague Bitcoin“.
For Luke Dashjr “the role of mining pools must change for Bitcoin to exist as a truly decentralized currency.” In other words, “Ocean is a new type of pool that enables miners to be truly miners again.”
How does Ocean work?
How does the non-custodial remuneration mechanism work? Giacomo Zucco, advisor to the project, explained it to Atlas21: “The mechanism works this way: you select the miners with the largest work shares – those who are to receive a larger percentage of the reward – and enter their address directly among the outputs of the coinbase transaction. In this way, the miners receive payment immediately if the block is valid. The mining pool holds nothing.”
However, Zucco himself points out, the data that can be entered into the coinbase field is not infinite because, if the coinbase transaction took up the entire block, there would be no room for other transactions and, therefore, the associated fees would not be collected. “There is a balance between how large a coinbase transaction can be,” Zucco explains, “and the number of outputs it can contain, which in turn defines the number of miners that can be included. This balance is established by the pool through an algorithm that maximizes fees without overly penalizing the miners with the largest shares. Any miner with a share above a certain threshold receives a direct payout.“
What happens for miners who provide a smaller amount of hashrate and whose address is not included in the coinbase?
“In these cases, the mining pool opens a Lightning channel, through which it makes Lightning payments addressed to miners who cannot be included in the first phase.”
StratumV2 in the future
Ocean’s operation is what also characterized the Eligius pool until it closed in 2017. In Ocean’s future plans, however, there is one feature that Eligius could not have, because the software did not exist at the time: the implementation of StratumV2, to give even more control and independence to individual miners over the pool.
At Atlas21 Zucco tells in Phase 2 of Ocean, in addition to StratumV2, there are also plans to introduce a market for the hashrate shares that miners have within the pool. “A miner is entitled to a reward share based on demonstrated work, but if they need cash before payout, they can sell their share via Lightning. By communicating proof of payment to the pool via Lightning, thus proving that someone has made a payment, the pool can automatically transfer the reward share payment from the seller to the buyer. This allows the miner to exit with liquidity immediately, before the pool finds a blockchain, and for those who enter to buy Bitcoin at a discounted price.“
