AARON: Ocean’s DATUM addresses Bitcoin’s most pressing issue

Watch Aaron on Nostr or X.

It is difficult to find a more fundamental threat to the continued existence of Bitcoin than the centralization of mining. If – say – there are only a few mining pools, there is a very real possibility that these organizations will face regulatory pressure of the kind that exchanges have faced: they could be forced to include only KYC transactions in blocks. Since censorship resistance is arguably its core value proposition, I seriously doubt that Bitcoin would, in this scenario, have much long-term viability.

To that end, it was great to see Ocean release DATUM (Decentralized Alternative Templates for Universal Mining) this weekend. Similar to Stratum V2 (implemented by Demand Pool), DATUM allows miners (or: “hashers”) to select the transactions they include in the blocks they find, while sharing the block reward with other pool users. In other words, hashers benefit from pool mining without having to outsource transaction selection to Ocean pool operators, thus making it more difficult to enforce regulations. (It is much easier to regulate a few large businesses—mining pools—in a handful of jurisdictions than it is to regulate many smaller businesses and individuals—hashers—around the world.)

Of course, the adversarial mind will recognize that this does not in itself solve the problem of centralizing mining entirely. Most obviously, draconian lawmakers could eventually ban this type of collaborative mining. Additionally, it’s not really clear that there is demand from hashers to build their own blocks, although of course that could change quickly if and when there actually is regulatory pressure to prevent pool- ures to include certain transactions in blocks. (And Ocean provides an incentive for hashers to select their own transactions, reducing fees for those using the new feature.)

Either way, DATUM is an important step in the right direction. If nothing else, it should remove many of Ocean’s own concerns about refusing to include certain “spam” transactions in their blocks: now each hasher can decide for himself what transactions he does and does not want to include.

The more difficult it is to counter Bitcoin’s resistance to censorship, the brighter Bitcoin’s future looks.