Blockstream to Battle Centralization of Bitcoin Mining Power

Blockchain startup, Blockstream has plans to reduce the level of centralization of Bitcoin mining power according to a blog post dated Aug. 8th.

Blockstream as per the update has officially launched the first mining pool aimed at giving back more power to the individual miners through the BetterHash protocol.

The startup is understandably concerned regarding the geographical concentration of Bitcoin mining pools and will use the BetterHash protocol to allow individual miners to choose which transactions go into new blocks rather than the mining pool operators.

Such a move will make the Bitcoin network more resistant to any kind of blockchain reorganization or 51% attack, making it a more secure network of users.

Speaking about the role that the BetterHash protocol would play as Blockstream looks to reduce Bitcoin mining centralization, the firm’s CSO Samson Mow, said in a Forbes report,

“By leveraging the BetterHash protocol in our mining pool, all of our customers can run their own full-nodes and build block templates.”

Mow also had an answer to suggestions that creating a new mining pool to promote decentralization is in stark contrast to the fact that Blockstream was building huge Bitcoin mining data centers.

At the moment, the firm boasts  300 megawatts worth of energy capacity facilities located in Quebec, Canada, and Adel.

The firm currently boasts three facilities in Quebec, Canada and Adel that constitute a combined 300 megawatts worth of energy capacity, and can readily host enterprise-level mining activities, in addition to Blockstream’s mining operations. 

Mow said,

“I don’t believe Blockstream Mining poses centralization risks […..] We’re self-mining with just a small portion of our available power, with the rest allocated to customers, and we have plans to make the hosting service available to smaller miners that otherwise would not be able to mine effectively.”

Meanwhile, in a separate development, Coinformania reported that Bitfinex in collaboration with Blockstream will launch Tether on the Lightning Network.