There are several discussions about whether or not Bitcoin mining activities are centralized. Indeed, there was an important hard fork (Bitcoin Gold) that did want to decentralize mining operations.

This time, Matt Corallo, an important Bitcoin Core developer, decided to publish a draft of a Bitcoin Improvement Proposal (BIP). The BIP aims to decentralize bitcoin mining activities by adopting a new mining protocol.

Bitcoin Improvement Proposal

The title of the proposal is known as BetterHash Mining Procol(s), and aims to change the way in which miners work.

The abstract of the project reads as follows:

“We propose two new mining protocols to rethink the way in which work is generated in the Bitcoin network, potentially drastically increasing effective mining decentralization.”

There are different factors that pushed this developer to create this proposal. For example, he explains that the bitcoin mining landscape has many ‘pressures’ that encourage centralization. According to him, this is related with the mining protocol known as Stratum.

Corallo explains that there are differences in the design of Stratum that if they are combined with the fact that miners point their hash power toward mining pools, then this limits the diversity of block templates used on the network.

With the new protocol, the block construction will be divided into work and pool, something that is known as BetterHash. This would allow miners to select transactions they include in blocks. Currently, miners that are trying to use their own block templates need to solo mine or work on small decentralized mining pools.

The projects keeps explaining:

“The extensibility of BetterHashis also noteworthy, as it’s structured to rely more heavily on the tinplating logic in Bitcoin Core than its predecessor getblocktemplate. The switch increases performance, simplifies the transition to new consensus rules, and allows for more robust templating logic (e.g. better mempool eviction).