Bitcoin [BTC] startup Mummolin has raised $6.2 million in seed funding led by Jack Dorsey, among others, with the goal of giving miners control over the network's block rewards.
The capital will support the start of a decentralized mining pool: OCEAN. The new non-custodial pool will be the first of its kind, as it will pay miners their block rewards directly, without the meddling of a centralized entity, unlike some of the existing pools, according to a statement.
Luke Dashjr, long-time Bitcoin Core developer and co-founder of Mummolin, said: “We are launching as the most transparent pool and also the only non-custodial pool where miners receive new block rewards directly from Bitcoin.”
Read more: How does Bitcoin mining work?
A Bitcoin mining pool is where operators working to confirm transactions on the network come together to coordinate their efforts and then share the resulting rewards with miners.
The traditional Bitcoin mining pool can act as a centralized entity such that it holds rewards paid by the network and then distributes them among miners, Mummolin co-founder and president Mark Artymko said in the statement.
"This gives individual miners the ability to withhold payment, either by their own choice or by legal requirement," he added. "OCEAN's non-custodial payments directly to block reward miners eliminate this risk and the pool's undue influence over miners."
The new group has received praise on social media from industry observers. “It's a mining pool with more decentralization built in from the bottom up, which [in my opinion] is good for the Bitcoin network,” said Lyn Alden, founder of Lyn Alden Investment Strategy.
The new company is essentially a reboot of Dashjr's former Eligius zero-rate group with updated code, Dashjr said in an X post.
As announced at the#FutureOfBitcoinMiningconference, I have relaunched my Eligius mining pool to help bring more decentralization to#Bitcoinmining.I am calling it OCEAN @ocean_mining https://t.co/ZG638nXllM
— Luke Dashjr (@LukeDashjr) November 29, 2023
“The old code has already been updated and tested with support for the latest Bitcoin addresses and mining machines,” he said in a follow-up post.
Barefoot Mining is Ocean's first customer and the group hopes to implement additional phases of Bitcoin decentralization improvements and upgrades in 2024.
The funding is led by Bitcoin advocate and former Twitter CEO Jack Dorsey and includes Accomplice, Barefoot Bitcoin Fund, MoonKite, NewLayer Capital, Bitcoin Opportunity Fund and other strategic partners.
The Bitcoin Censorship Problem
Ocean's debut comes as some legacy mining pools have come under controversy for censoring certain transactions, as many Bitcoiners consider "censorship resistance" to be a cardinal principle of the largest and most original blockchain.
More recently, F2Pool, the third-largest Bitcoin mining pool, sparked ire on social media after a report that it could be censoring transactions from an address subject to US government sanctions.
“OCEAN is solving a problem for Bitcoiners that I think all of us feel: greater centralization of pools and mining pools that could affect Bitcoin, and how that puts at risk a lot of Bitcoin attributes that we hold dear,” Dorsey said. .
Read more: Bitcoin mining industry is at a 'crucial moment', says JPMorgan