A new mining facility and pool going by the name of ‘CANOE’ has joined the Bitcoin mining race this week, already claiming 0.7% of the total hashrate with 22 Petahashes worth of mining power.
New Pool Signaling Bitcoin Unlimited
News of CANOE’s launch came recently when Chinese Twitter account cnLedger revealed that the pool was attracting much attention in China for signaling the Bitcoin Unlimited (BU) software client. BU is a favorite with many Chinese bitcoin miners. All of the 22 Petahashes are owned by the pool itself, according to cnLedger.
Bitcoin miners signal their support of their preferred bitcoin client by ‘relaying’ the version number when they mine new blocks. If 75 percent of all blocks being relayed over a two week period are signaling for BU, the software ‘locks in’ and activates.
While the share of the overall network hashrate is not a guarantee of the percentage of blocks being relayed, knowing which pools prefer BU is a common way to form an estimation. CANOE’s addition adds to the roughly 20 percent of total hashpower that prefers the BU client.
The person in charge of the CANOE pool is Ang Li, a bitcoin entrepreneur since 2013 who became a miner in 2015. Li started to build a large-scale mine the following year in Sichuan, which has recently been called the capital of bitcoin mining.
Apart from CANOE, a pool called BTC.top is another newcomer that has been publicly supporting BU. BTC.top was launched in December 2016, and now has about 7% of the network’s hashrate. Other pools that have publicly supported BU’s scaling plans include ViaBTC, the Bitcoin.com pool, India’s GBMiners, and a sizable portion of SlushPool.
Why Support BU?
Li told Chinese news website 8btc that Bitcoin’s network congestion is the reason why bitcoin’s block size needs to be increased. While Bitcoin’s users and transactions have been expanding, the network can still only handle between 3 and 7 transactions per second. Li described:
Now the reward for a new block is (only) 12.5 BTC, but the fees are almost 1 BTC. Many people are paying more fees in order to make sure their transaction will be confirmed soon.
A scaling solution called the Lightning Network is being developed by at least five different development teams. Some believe it to be an alternative to the BU client, while others including the BU development team, have pledged support for the Lightning community. The network’s solution calls for high-valued transactions to be processed on the Bitcoin blockchain while 0.042 BTC or smaller transactions are meant to take place across their network instead. Entrepreneurs who open a Lightning ‘Payment Channel’ for the network will be able to collect fees from users directly using the Lightning Network.
Keeping transactions ‘on-chain’ will require higher fees under this arrangement. “BS [Blockstream] supports Core dev team’s path which will lead to the Lightning Network”, Li said. “They’re thinking of the interest of their own company and team, but they did not consider the interest of the majority of miners. Meanwhile, their solution cannot solve the long-term problem of network congestion. It is also against the original vision of Bitcoin,” he argued.
Helping Guide the Mining Community
Li also believes that as new miners and big money flow into the network, most miners cannot fathom the potential outcomes of the various scaling plans like BU and Lightning. The lack of technical knowledge has, in his opinion, contributed their indifferent attitude towards scaling. “We are much more deeply involved in the mining business”, Li shared. “Therefore we want to guide miners to work toward the best of their interest. This is also the reason to found the pool”. He also explained that:
To support scaling (on-chain) is to defend the interests of the miners. Mining is the foundation of the whole bitcoin network and business. So defending the interests of miners means defending the bitcoin network too.
The incentives that Satoshi Nakamoto designed in the Bitcoin whitepaper are not enough to sustain mining for long, Li feels, adding that as the block reward halves every four years, miners income will continue to decline. According to him, keeping the block size where it is now will not provide enough incentive and therefore has to be reconsidered. Li also believes that only a larger mining transaction fee will maintain the balance. “By increasing block size, and transaction numbers, the fees will gradually replace the block reward, providing enough incentive for the miners to defend the bitcoin hashrate. This is the fundamental way to achieve healthy development of the whole ecosystem.”
Nonetheless, he believes that other scaling plans should not be ruled out. “We support increasing the capacity, it does not simply mean that BU’s plan is the best one. But increasing the capacity is essential,” he noted.
His future plan for the pool is to deploy another facility for mining in Xinjiang, named “Dian Jin Blockchain,” or Electric Gold Blockchain. The new project will have a capacity of 130,000kw with the intent to become the largest bitcoin mine in the world.
Updated: a previous version of this article stated that Bitmain would take part in the funding of the above mentioned new project. In an email to Bitcoin.com Bitmain clarifies: “Bitmain only built the farm and sold it. Bitmain is funding neither that mining farm nor that mining pool.”
What do you think of CANOE? Let us know in the comments section below.
Images courtesy of Shutterstock, Bitcoin Unlimited, and Blockchain.info
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