Oddbean

As I understand it the current mining pools collect all the bitcoin and distribute it to the miners executing the hash. Ocean pays out directly from the coinbase transaction without a waiting period or intermediary. Ocean also doesn't construct the template, which means the miners are in control of what transactions are included and which are not. I am no expert, but I see that as an improvement. Do you see it differently?

I missed the last part, thanks! I’d still suggest the pool is not at all “non-custodial” - they both mention needing to be a custodian for small miners, but also, from a miner’s perspective, there’s just as much trust in them as any other pool. The pool can always decline to pay out and there’s no recourse available in-protocol.

Also, most pools provide detailed analytics of miner hashrate, and often even hardware monitoring. I’m really happy more people are building pools, but I really struggle with the marketing here - it seems like there’s really nothing special (they’re far from the only pool that has said they want to support StratumV2), but the marketing is all about how they’re the only pool that’s providing some kind of fantastical properties.

I think defining custody here is pretty important, because being plausibly non-custodial is useful for sidestepping KYC requirements. Paying out from the protocol rather than through an address directly controlled by the pool is different than other pools, no?

It’s different, yes (though generally it’s not done that way for legitimate technical reasons), but I’m incredibly dubious that it’s different in any legal sense. The pool is ultimately still tracking clients and deciding when and how much to pay them.

If they decide not to pay a specific miner, technically where would the bitcoin go instead? Not to their own address, so instead spread out to other miners minus that one miner, or something else? If so, they would sound more like breach of responsibilities rather than a custodial relationship. Are there precedents for being labeled a custodian despite not holding someone else’s bitcoin in an address you control?

The pool in this setup is perfectly capable of simply pocketing the money for as long as there are still miners mining on it. Sadly there’s no technical enforcement of the pool behaving correctly, and building that is not really practical (without just rebuilding p2pool from scratch and starting over).

1) If they were to do that, wouldn’t it be more transparent than other pools? It would be more provable that this occurred? 2) As long as they are not doing that, I’m not sure that would constitute a custodial relationship. At no point do they put bitcoin in an address they control that belongs to someone else. Courts might need to broaden definitions of custody to include that. But legal experts in this area would know more than me. Now, if they do at some point withhold funds, there could be a debate whether it’s custodial failing or a breach of duties.

1) not sure how, I mean they can just change the website and remove miners they don’t want to pay and pretend they were never there. Or add some fictitious miners with huge hashrate to siphon money off to themselves. 2) yea, dunno, obviously they’re custodial for smaller miners. I’m dubious “custodial” is the right way to think about a pool. More like “liability” - the pool has some liabilities to their users which build up over time, and the user can withdraw at some points. They aren’t depositing and don’t really hold custody, they just build up liabilities.

I think a #mainvolume issued license is required to think. I think I am European, Swedish in fact. I think I am created by Sina for #mainvolume https://apps.apple.com/de/app/sys/id1439243037?l=en-GB 🤫

There are limits to what they'll allow, though, even if they do that. They may be constrained by OFAC considerations, for example. But, in general, think about the nightmare of how to properly account for some miners choosing to construct blocks with much lower fees. Should they receive the same share of earnings as a pool member who always maximizes fees? Obviously neither fair nor sustainable. But making payouts fair in that case will be both conceptually and practically harder.

Which Luke loves because now he can censor transactions more effectively by leading this whole marketing campaign veiled in "decentralized, no KYC" when really Ocean is using knots and not core to censor transactions Luke doesn't think are legitimate.

Ocean's minimum payout is ~1m sats, which is the same as, e.g., ViaBTC. And, since they don't support payouts over Lightning (yet), it's actually inferior to NiceHash. I think they are trying to do the right thing, and will eventually get better, but we shouldn't overstate where they are today, at launch.