Why Hashing Alone Should Not Be Confused With Mining
We should hold ourselves to a higher standard as a network.
The reason we changed proof-of-work was not because the previous algorithm stopped producing valid hashes. We changed because concentration surrounding mining had become incompatible with the decentralization we expect from Bitcoin.
We cannot make that transition and then immediately recreate the same structural failure.
Mining is more than producing hashes. It consists of two essential functions:
Block construction — independently determining the candidate block, choosing transactions, and having the opportunity to introduce transactions into the ledger.
Proof-of-work — expending computational energy to secure that candidate block and compete for the right to extend the chain.
Traditional pool-controlled Stratum V1 separates those responsibilities poorly. The pool constructs the work and exercises template authority while the ASIC operator largely supplies hashes.
Those hashes are real. The resulting block may be completely consensus valid. But valid does not automatically mean deserving of equal reward.
DATUM gives us the opportunity to do better:
Node → local DATUM → independently constructed block → ASIC → proof-of-work
A pool can still aggregate shares, reduce variance, and distribute payouts without becoming the authority that decides what its miners are permitted to put into blocks.
This is fundamental because decentralization is not merely about having many machines performing hashes. It is about maintaining equality of opportunity to participate in constructing the ledger.
Every miner should have a meaningful opportunity to construct its own template, select from valid transactions according to its own policy, and introduce its own valid transactions for inclusion when it wins the right to extend the chain.
That right disappears as template construction becomes centralized.
A network could have thousands of independently owned ASICs and still have only a handful—or even one—actual block constructor. Such a system may look decentralized when measured by machines while being profoundly centralized where it matters: control over what enters the ledger.
We therefore should not encourage that architecture by compensating centralized template delegation exactly as we compensate independent block construction.
Equal rewards for unequal contributions create the wrong incentive.
If surrendering template authority is cheaper, easier, and equally profitable, rational participants will surrender it. The protocol would effectively subsidize its own centralization.
It also encourages transient, drive-by hashrate: guns for hire that point at centrally supplied work, collect rewards, and leave when another opportunity becomes more profitable. Such participants provide proof-of-work, but capture compensation intended to incentivize decentralized network security without assuming the full responsibilities of mining.
SV1 hashing can remain consensus valid. It can remain available as a fallback because chain liveness matters.
But tolerance is not entitlement to equal compensation.
Our goal should be a system that continuously strives toward equality of opportunity: the opportunity for every participant, large or small, to construct a block template, exercise independent transaction-selection policy, and introduce valid transactions into the ledger without requiring permission from a centralized intermediary.
Centralization, if taken far enough, abolishes that opportunity.
We changed proof-of-work because we had already learned the consequences of allowing mining power to concentrate. We should not repeat that mistake by economically rewarding the architecture that recreates it.
Valid work may extend the chain. Full mining rewards should favor work that preserves the individual miner’s opportunity to participate directly in constructing the decentralized ledger that proof-of-work exists to secure.