{ "episodeId": "SLP750", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "alejandro_de_la_torre": { "name": "Alejandro De La Torre", "role": "guest", "tag": "ALEJANDRO" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.0, "text": "Hi everyone, welcome back to Stefan Lovera podcast. Rejoining me on the show today is Alejandro D. Latorre. He is the CEO and founder of DMND, spelled D-M-N-D, and, big news today, or recently is, block nine hundred fifty-five thousand three hundred eighteen is the first known Stratum V2 block on Mainnet, and, you were, you were the pool who mined it, so give us, the background there." }, { "speaker": "alejandro_de_la_torre", "time": "00:24", "start": 24.0, "text": "Yeah. So the first Stratum V2 block built by demand, it-- what it means is that the pool no longer has the power to mine, to, to-- it's not only the pool that has the power to build a block, but the miner themselves. And with our, with our pool, the miner Gold Mining actually built this block, using Stratum V2 mining protocol, which is a, an efficient and more advanced protocol for Bitcoin mining than Stratum V1, like the legacy pools have. but they also included their own transactions into this block with their payment system, which opens up a whole entire, new Use case for miners if they want to make even extra" }, { "speaker": "stephan", "time": "01:07", "start": 67.0, "text": "more money. I see. and so what does this mean if pools aren't the only one selecting the transactions now? How does this change Bitcoin mining?" }, { "speaker": "alejandro_de_la_torre", "time": "01:17", "start": 77.0, "text": "It changes it because right now, Bitcoin mining is extremely centralized with just a handful of pools building the blocks, which is a against Bitcoin. I mean, Bitcoin is decentralized payment system, and how can it, how can the pools be the ones only one building the blocks? There's only a handful of pools, you can fit them in a small room, the operators. That is a big issue for centralization and, and, and, and for, for Bitcoin. and we give this power to the miners. So- Let's say we have a thousand miners, it's optional of course, they can, they, they can choose not to, but if they choose to build their own block, then that means a thousand extra block producers are, are, are on, on the ecosystem." }, { "speaker": "stephan", "time": "02:00", "start": 120.0, "text": "I see. And so now, I've heard different arguments back and forth on this, because some people have made this argument that, the pool can still reject shares or refuse the blocks, or if, you know, a state actor were to come to you or, you know, some of the pools, but I know there's d- kind of different arguments back and forth there. So can you clarify from your perspective how you see that?" }, { "speaker": "alejandro_de_la_torre", "time": "02:20", "start": 140.0, "text": "Yeah, sure. That's a, that's a great, that's a great question. So, DMN doesn't, Whatever you, we, w-again, we're pa- we, we're firm believers of Bitcoin and its, philosophy. That's why we joined many years ago. Me and the co-founder and the team are very old-school Bitcoiners, and we all believe in, in Bitcoin and, and the freedom to use this freedom money. what does that mean? That means that we allow any block to be made. Of course, it has to be within the limits of Bitcoin, so it doesn't hurt Bitcoin. but if you don't want to, if you want to, let You can, if you want to add transactions because you have a payment system, we've already shown we do that. So it's up to you. now the state actors is always an issue. I mean, this is a- An improvement to, to what we have now. I wouldn't say it's, it fixes all the issues, but an improvement is what we can do, and we intend to make it even better." }, { "speaker": "stephan", "time": "03:21", "start": 201.0, "text": "Yeah, I think that's fair. now, I guess the other aspect of it is, it theoretically, I mean, I'm curious to hear your view. Do you believe that if the ecosystem were to adopt SV2, more and more pools, let's say miners, maybe even the hardware and the firmware, like just kind of more broadly, would it also lower the switching cost? So let's say you are a miner and you try to get your transaction, you know, you select a certain transaction and it goes to the pool and they reject it, could you more easily switch?" }, { "speaker": "alejandro_de_la_torre", "time": "03:50", "start": 230.0, "text": "Yes, that's, that's the power of Stratum V2. That's why, that's why Stratum V2 open source team, was, people need to understand Stratum V2 has been built for a long time. Why? Because it's been built, with the thought of it being used by the whole network, by the whole entire industry. And what does that actually mean? That means that if one pool decides to You know, not accept your block for whatever reason. The Stratum V2 is built, in a way where every single pool that is using Stratum V2 can then accept that block, and that's the key. That's the key. Any other, protocol on the network, it, it might not work in conjunction with other pools. But Stratum V2 was built from the ground up, so it's always compliant with all other pools that are using Stratum V2. So that gives miners the ability to- To quickly switch if a pool doesn't accept the block." }, { "speaker": "stephan", "time": "04:48", "start": 288.0, "text": "Yeah, and, I know, so I know you're with DMND, obviously this is maybe a little more to the SRI Stratum reference implementation, but I believe they put out an announcement recently that, approximately seventy-five percent of Bitcoin's hash rate, represented by the pools, has joined this Stratum v2 working group. So I can see on the list, Foundry, Antpool, F2Pool, Spidropool, MiraPool, Block Inc, and obviously yourselves, DMND." }, { "speaker": "alejandro_de_la_torre", "time": "05:15", "start": 315.0, "text": "Sure. So yeah, we're working in conjunction with these other pools to try to make it, you know, make it easier for them to switch over to Stratum V2. Remember, our, our core Goal here is to decentralize Bitcoin mining, nothing else. And if there's more pools building on, on Stratum V2, allowing miners to build their own blocks, then we take it as a win. So we're helping any, any way we can, and this working group is a strong and a pivotal step forward for that." }, { "speaker": "stephan", "time": "05:43", "start": 343.0, "text": "And then, as I understand, even at the hardware and firmware level, we're seeing, moves there also. I believe Block and Proto, so that's Jack Dorsey's, one, and then I actually recently had an interview with NG Zhang Canan, they're, I believe they are the third largest in terms of Bitcoin mining machines, and they've also mentioned that they are interested in SV2. there are some others, I think BitX, Auradine, and I believe Brain's OS brought it at the firmware level. so any comments on those at the hardware and firmware level?" }, { "speaker": "alejandro_de_la_torre", "time": "06:13", "start": 373.0, "text": "yeah. so Aradine actually, if you have Aradine machines, you can, mine directly to-- from the machine to our pool. You don't require a proxy anymore with Aradine machines, which is industry first. So they're the first, basically mining manufacturer to actually allow for Stratum V2 from the hardware into a Stratum V2 pool like ours. So we worked very closely with Aradine on that, and we're very happy to see how that- That developed. Proto, of course, has always been very, forward-thinking and, we hope to keep working with them. as for, for the firmware level, I, there's a lot of work being done, let's say from, let's, more, third-party firmware, not, not necessarily OEMs, so like the ones that, like Bitmain, the Bitmain firmware, whatever. but it's more like, other, other firmwares that are also very much, we're very much connection with them or connecting and speaking with them, and I think the increase of firmware and soft- and, and hardware, SV2 usage will work sort of in tandem with More miners getting an SV2 pool. So as soon as we start going up the, the, the ladder on the mining pools, that's, I think a lot of mining hardware, manufacturers and firmware will start more, you know, being more serious about, integrating" }, { "speaker": "stephan", "time": "07:45", "start": 465.0, "text": "SV2 Great. And in terms of, I guess hash rate that's interested in SV2 now, are you seeing growth there or what's the interest been like?" }, { "speaker": "alejandro_de_la_torre", "time": "07:57", "start": 477.0, "text": "There's a lot of interest, a lot of interest, and, we, we had, there was a lot of questions before the first block came in, you know, a lot of, a lot of miners had this, thought it was too technical, you know, too unproven, but we've proven it. It works perfectly fine. the block is built, the block was built with JD, which, which means that the miner built it themselves. we've proven it. and- And, a lot of the-- our task as a pool is to take Stratum V2, which is a highly, let's say, highly advanced technical protocol, and make it as simple as possible for the miner to use, and that's what we've been doing. So for the miner who joins our pool, you don't need to worry about, you know, end-to-end encryption, binary, all that stuff, you leave that to us. You just have to come up, come to our website, make an account, and you can just point your rigs at us. If you wanna build Set up the proxy, it, it's simple. We've made it as simple as possible, just a couple of clicks, and you're good to go." }, { "speaker": "stephan", "time": "09:03", "start": 543.0, "text": "Yeah. And then in terms of the main benefits, as I understand, there's a few things. So it's this, as you mentioned, the end-to-end, the encryption and using the binary protocol, so it's more efficient, you-- because of the binary protocol. And then it's, you're getting protection from hash rate hijacking because of the encryption, and of course, the broader kind of transaction control idea or What would you spell out as the benefits of using SV2 if you're a miner?" }, { "speaker": "alejandro_de_la_torre", "time": "09:32", "start": 572.0, "text": "yes. So a lot of, a lot of the upgrades in Stratum V2 are incremental. So there, there, there may be like a percentage here, two percent there, a half a percent there, but if you add them all together They actually make up a good, a good, incremental advantage for the miners. And if you, if you take those small percentages and you add them all together, and then you add a lot of hash rate, then it starts to really make sense, you know? our, our rejection rates are the industry lowest, without a doubt, that we've been seeing it with all the miners that we have in our pool, and we, we intend to show more about that as we move forward. That's just one of the things of, that we see that, Stratum V2 improves, and what does that mean for the miner? Less rejection rate means more shares being accepted, meaning more money for you." }, { "speaker": "stephan", "time": "10:24", "start": 624.0, "text": "Interesting. And so, I'm curious if you can share anything in terms of like the payout numbers and things. Like, I know people have tried to run comparisons because I know another kind of topic is around going against FPBS and things like this. So you have, what's it called," }, { "speaker": "alejandro_de_la_torre", "time": "10:40", "start": 640.0, "text": "PPLNS." }, { "speaker": "stephan", "time": "10:41", "start": 641.0, "text": "Yeah, right. And, what's, is it called? Slice. Slice, that's the one. Yes And so can you comment a bit on the differences there, on if somebody is using, you know, a traditional pool versus your pool?" }, { "speaker": "alejandro_de_la_torre", "time": "10:53", "start": 653.0, "text": "yeah. look, FPBS is a payment system that is used widely in the industry because it, it pays the miners, you know, the miners are, let's say, they can forecast, they know that every single day they're gonna get paid this much. of course, they understand that it's more expensive, but, but ultimately a miner needs to pay the bills, needs to pay their, their employees, et cetera. so the FPPS works, you know, very well for that, for that, reason. PPLNS is sort of a maximus, I, I call it maximizing your tr- your sets per terahash. what that means is that you get exactly how much your hash rate costs. You get a hundred percent what your, what your hash rate has produced, and that's the beauty of PPLNS. You get paid more, however, you have to wait until the block is hit by the pool." }, { "speaker": "stephan", "time": "11:53", "start": 713.0, "text": "I see, and that's, I guess, where the whole pool luck conversation comes in, because if, let's say, because of the variance that maybe your, your, your pool hits more blocks than they \"quote-unquote\" should have based on the proportion of the network or less, and so I guess people just have to kind of do the numbers on that, on whether they can, Kind of stomach the volatility, let's say, or stomach that variation, but if they're doing it for the, you know, increased, you know, performance or efficiency, then maybe that's something there. and then- It's" }, { "speaker": "alejandro_de_la_torre", "time": "12:23", "start": 743.0, "text": "monetary value, I should say." }, { "speaker": "stephan", "time": "12:25", "start": 745.0, "text": "Right. I see. Yeah. and then just looking out in terms of Stratum V2 adoption over the next, let's say, twelve to eighteen months, what would need to happen for this to become, let's say, a stan- more of a standard?" }, { "speaker": "alejandro_de_la_torre", "time": "12:40", "start": 760.0, "text": "I think, I, I think that, the growth of our pool will be, a strong signal to the rest of the market and, and the working group already shows that the large operate, large mining pools are, are definitely interested. I think, I think the next step would be firmware that accepts, SV2. I think that's more of, realistic, thing that can happen because hardware is a little bit more difficult, and I know 'cause I worked very closely with Ardyn, also with Proto. but yeah, I think the next step would be to see more firmware, you know, using SV2." }, { "speaker": "stephan", "time": "13:24", "start": 804.0, "text": "Excellent. And then, in terms of, because I guess just to be clear, as you mentioned, you can decide whether to do job declaration or declaring your own job as a miner or not, and so I guess what, what, what goes into that conversation for the miners? Is it just more like they are ready to do this, or not, or maybe they're coming from like a traditional mindset and they don't, they're not ready to do this new thing?" }, { "speaker": "alejandro_de_la_torre", "time": "13:45", "start": 825.0, "text": "That's exactly it, yeah, yeah. So a lot of the, a lot of the miners have been A, more, more like a very large operator or a operate, or a miner that comes in like gold mining that already has a like set idea, like, \"Look, I want to add my own transactions into the block and get those transaction fees back.\" I tell em, I tell the new miners, \"Come to our pool, let us build the block. Just, you know, for a couple of, let's say a month or two, you see how it runs, check it all out. When you're comfortable, set, we can help you set up that proxy. Very And then you can start building your own blocks. A lot of, a lot of the machinery involved in Stratum V2 is complex, i-in terms of, you know, the, the literature and, and, and our conversations, but the pr- in, in practical, what I mean is that when the miner's just on our pool, they'll, they'll just learn, they'll just see that it's actually not that difficult at all. It's just a, a click or a, a, a choice. running a node on their operations. So then they'll, they, they, they, they, you know, step by step, they'll realize, oh, well, this actually, I'm, I'm able to maximize my hash rate, I'm able to build my own block very simply. I thought it was actually much more technical, but it's not. So that's what we tell the miners to do. Start off slow, let us build the block, you get the feeling how it works, then you can move on to building your own block." }, { "speaker": "stephan", "time": "15:17", "start": 917.0, "text": "Excellent. Well, I think it's great to see the progress there on Stratum V2. listeners go and check out Alejandro's work. You can find him and the pool at d m n d dot work and on X, you can find him at bit entrepreneur. Alejandro, thanks for joining me." }, { "speaker": "alejandro_de_la_torre", "time": "15:31", "start": 931.0, "text": "Thank you," }, { "speaker": "stephan", "time": "15:31", "start": 931.0, "text": "Stefan." } ] }