Is the centralization of crypto mining a real threat? Untold Stories, with Charlie Shrem and Ryan Condron (Part 1/3)
On August 17, our CEO Ryan Condron joined Charlie Shrem on his YouTube show, Untold Stories. In a conversation full of nostalgia and happy memories, they discussed cryptocurrency, crypto mining, its future, and how we as a community can get involved to improve proof-of-work. If you want to watch the full conversation, you can do so here.
Mining pools and the importance of transparency
The crypto space has seen exponential growth over the last few years when most people joined the community. You don’t often get the chance to listen to two OGs from the early days remembering old times and analyzing how far we’ve come. This talk was one of those rare opportunities.
The first thing Charlie wanted to know about was Titan’s pool and how it favors transparency. As Titan’s website says, our pool “reduces jurisdictional and support issues for North American miners who previously may have entered into potentially complicated transnational agreements.” But what does that mean?
What are mining pools?
As cryptocurrency mining becomes ever more competitive, small, solo miners cannot keep up with enterprise-level mining…
One of our primary goals since the very beginning has been complete transparency — zero backroom deals. “What you see on the site is what you get. When it comes to the fee structure, you’re paying the same fee ladder that everyone else is paying, and it’s fully visible upfront on the site,” explained Ryan.
The idea of Titan’s pool is to be fully auditable and transparent, where “everyone knows everyone else,” and there is no black-box mechanism that hides the pool’s data. According to Ryan, users mining with pools had a recurring problem: “A lot of the miners we were engaging with here in North America were under contract with pools over in Asia. And some of those miners, if they wanted to go public or they needed to be compliant in some way, found it very difficult because there were just so many unknowns when it came to the pool that they were mining with.”
What type of compliance are we talking about? At this point, it’s still to be defined. “If Bitcoin is going to be some type of currency or commodity, it’s going to be regulated,” said Ryan. The specifics haven’t been defined yet, but many are trying to get ahead and save themselves some trouble. Titan is trying to facilitate that with transparency.
Mining evolution: Then and now
If you’re relatively new to the crypto space, you may find solo mining uncommon. However, it was the norm many years ago. Miners just had to download a node, sync it to their mining rigs in their garage, and start mining. “When the Stratum protocol came out, it helped synchronize everything, and it just moved over into a pool model.”
In fact, mining pools are a consequence of the mining ecosystem’s growth. “As we evolve in the space, pools and mining are going to be way more institutionalized or even on an enterprise level,” added Ryan. That said, with more companies venturing into mining, we’ll probably start seeing some changes in the mining pool landscape. “I don’t think public pools are going to be a viable business model five, ten years from now. We’re going to start seeing a consolidation of large hashrate producers around private pools.”
How mining can attract institutional investment into cryptocurrency
Institutions are becoming more interested in Bitcoin as an asset to hold in their treasury. However, not all kinds of…
Which leads to another important question Charlie asked: “Do you think that Satoshi was nervous about the idea of people pooling together because they would amalgamate power in a way?”
Funnily enough, that concern is exactly what Titan is addressing right now. “We have a new protocol coming out called Lumerin, which is essentially decentralized control of hashpower through a smart contract network.”
“If Satoshi were to have a problem with mining pools, it would be the idea of centralization of control,” explained Ryan. “We see more specialized devices coming online around the world. The reality is anywhere in the world you find cheap electricity, stable infrastructure, and favorable government regulation, you’re going to have a congregation of mining and hashpower,” he added.
We have seen in the last months that government stances on crypto have become increasingly important, and decentralizing hashpower control from the geographical location where it’s produced could mitigate all the negative effects unfriendly regulations have on mining without compromising hashrate.
“What is decentralization? It’s having as many decision-makers in a system as possible.” Titan focuses on building such a system for mining. “The key is to decentralize the control of the hashrate.”
Through the protocol we’re building, we can take a facility with a hundred thousand devices. Rather than give one decision-maker control over those devices, we can put them into an open market where they can be bought and sold digitally. You would then have a hundred thousand different owners who can control those devices regardless of their location.
That is what decentralization of control of hashpower is. And the exact idea behind the network that Titan is building.
If you want to learn more about Titan and the Lumerin Protocol, make sure to visit our website.
A self-regulating community
“You almost wonder if it was pre-thought that this could happen,” pointed out Charlie about mining centralization. “Bitcoin and most, if not all, of proof-of-work cryptocurrencies almost constantly incentivize decentralization.” Indeed, if there’s something the proof-of-work community cares about is decentralization. And we’re committed to fighting for it.
“The optics of it is what’s important, and that’s why we see self-regulation,” added Ryan. “Even if [mining pools] are approaching a large majority of the hashrate, they’ll self-regulate.”
That responsibility probably comes from the early Bitcoin community, as they both recall it being a little too hostile to low-quality content or unpopular opinions. “I was always afraid of the community. Even with my first posts, I was scared, and it was like ten people,” remembered Charlie with a smile. According to him, it was the mentality behind the famous Satoshi line: “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”
From the very early days, the community knew its worth. And when it faced tremendous criticism from the outside, it protected itself by not bothering to enter into a debate not worth having, hoping that eventually, people would understand crypto’s value. Evidently, it turned out pretty well.
Are you interested in the maturity of the crypto industry and how crypto mining can help us build the energy grid of the future? Read the second part of the interview here.
Titan is actively working to optimize mining and make proof-of-work cryptocurrencies more accessible and democratic. If you liked this story, make sure to subscribe to our blog and sign up for our weekly newsletter to stay up to date with all things crypto. You can also visit our social media through the links below. We’ll be glad to have you!