Blockstream, a Canadian blockchain technology company focused on the development on Bitcoin on Thursday revealed its plans of launching bitcoin mining facilities and a bitcoin mining pool.
The company, through an announcement post, said that its new facilities “provide mining equipment colocation in our purpose-built data centers designed to meet the needs of institutional and enterprise customers.”
The mining facilities will be based in Quebec, Canada, and Adel, Georgia. According to the announcement, Blockstream states that the facilities will consume on aggregate about 300 megawatts of electricity when operating at full capacity. The facility, dubbed Blockstream Mining will be available to enterprise and institutional investors while also supporting Blockstream’s mining pool.
Blockstream’s CSO Samson Mow told that when the Blockstream Mining is operating at maximum capacity, it will be contributing about 6 exa-hashes in Bitcoin mining power to the Bitcoin network. That’s roughly about 7% of this week’s total bitcoin mining power or about 10% of last month’s. That is huge. Blockstream also announced that it has two clients already which are LinkedIn Founder Reid Hoffman, who also happens to be an investor in the venture as well. Also Fidelity Center for Applied Technology has signed up as one of the first clients alongside Hoffman.
In addition to the mining facilities, Blockstream will be launching a mining pool. Its proposed pool is aimed at giving more control of the bitcoin network back to the retail miners. Traditionally, mining pool operators have been in charge of determining the transactions to be included in the next block. However, the Blockstream mining pool will utilize a new protocol named BetterHash protocol which will allow each individual mining pool participant to vote in their transactions of choice to be included into the next block.
Blockstream states that the impetus behind the launch of the mining pool facilities and the pool were to solve the growing concerns about bitcoin mining centralization. However, critics have been quick to point out that the two services are in contradiction to the Blockstream vision. If Blockstream is concerned about centralization, then it seems that launching a mega-mining facility may not be the best way to solve the problem.
Mow addressed these concerns saying that,
“I don’t believe Blockstream Mining poses centralization risks… If anything, Blockstream Mining serves to decentralize the Bitcoin mining ecosystem in many ways. 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. Also, by leveraging the BetterHash protocol in our mining pool, all of our customers can run their own full-nodes and build block templates.”
It remains to be seen if the claims the company makes are actually true. The company has definitely invested a lot into the facility and the new BetterHash Protocol will help bring back the mining power back to individual miners but the concept is new and has not been extensively market-tested.