The First Stratum V2 Block: What It Means for Bitcoin Mining | SLP750

**Stephan Livera** (0:00)
Hi everyone, welcome back to Stephan Livera Podcast. Rejoining me on the show today is Alejandro De La Torre. He is the CEO and founder of Demand Pool, spelled DMND. And big news today, or recently, is Block 955,318 is the first known Stratum V2 block on Mainnet. And you were the pool who mined it, so give us the background there.

**Alejandro De La Torre** (0:24)
Yeah. So the first Stratum V2 block built by Demand, what it means is that the pool no longer has the power to mine, it's not only the pool that has the power to build a block, but the miner themselves. And with our pool, the miner Go Mining actually built this block using Stratum V2 mining protocol, which is 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 more money.

**Stephan Livera** (1:08)
I see. And so what does this mean if pools are not the only one selecting the transactions now? How does this change Bitcoin mining?

**Alejandro De La Torre** (1:17)
It changes it because right now, Bitcoin mining is extremely centralized with just a handful of pools building the blocks, which is against Bitcoin. I mean, Bitcoin is a decentralized payment system. And 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 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 choose not to, but if they choose to build their own block, then that means a thousand extra block producers are on the ecosystem.

**Stephan Livera** (2:00)
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 a state actor were to come to you or some of the pools. But I know there's different arguments back and forth there. So can you clarify from your perspective how you see that?

**Alejandro De La Torre** (2:20)
Yeah, sure. That's a great question. So the demand does not, let's say we are agnostic 100 percent.
Whatever you, again, 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 Bitcoin 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 want to, let's say, not mine ordinals, 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 an improvement to what we have now. I wouldn't say it fixes all the issues, but an improvement is what we can do, and we intend to make it even better.

**Stephan Livera** (3:21)
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?

**Alejandro De La Torre** (3:50)
Yes, that's the power of Stratum V2.
That's why Stratum V2 open source team was, people need to understand Stratum V2 has been built for a long time. 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 in the network, 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 quickly switch if a pool does not accept the block.