Battle of Hash Rate：He Quit Tencent and Started the World’s Sixth Mining Pool ViaBTC ViaBTC Follow Sep 2, 2016 · 7 min read

ViaBTC mining pool was launched on June 5, 2016, and has been stably operating for over two months, its maximum hash rate reaches 120P, ranking sixth in the global mining pool. The top five are respectively AntPool, F2Pool, BTCC, BW.COM and BitFury, respectively.

The production of Bitcoin mining pool is just like teaming up to hit the monster in the game, once a person in the team gains a block, he will distribute Bitcoins in the block to the miners according to the properties, in this way, everyone in the mining pool can quickly gain the Bitcoin. Of course, miners with access to the pool shall pay certain commission charges to the pool, which will be varied with different mining modes and different rules of the pool.

Due to the characteristics of Bitcoin, the case of Bitcoin mining pool alone big appears impossible. Recently, HaoBTC, ViaBTC and other mining pools were launched in succession and ranked the front places, and the more and more emergence of outstanding mining pools is conducive to realizing the idea of Bitcoin decentration.

“Die-hard fan of Bitcoin”, demission from Tencent to start-up

Founder of the mining pool Haiyang has successively worked in the micro-blog business division and structure platform division of Tencent, and possessed a wealth of experience in the development of distributed, highly concurrent network server. He lives up to the reputation of “Die-hard fan of Bitcoin”. In 2011, a relatively extensive debate on Bitcoin arose on the the Internet for the first time, when Haiyang learned the basic principle of Bitcoin on the personal blog of a well-known programmer Yunfeng who served in 163.com; in 2013, prices of Bitcoin advanced by rushes, hence, Haiyang attempted to operate the Bitcoin node, and bought some Bitcoins from BTCC — an exchange with the longest service time; with his deepening cognition and increasing optimism about Bitcoins, he almost ran out of his two years‘ savings to buy Bitcoins in May 2014. Later, he met the operation director of Zeus Team in Tencent’s internal sharing session. He joined Zeus subsequently, and became the technical director of the team.

When mentioning the reason for demission and working on mining pool, Haiyang said that Bitcoin mining pool is a high-tech project, and it’s quite difficult to make the pool enough stable and efficient. Based on the work experience of high-performance server and background development, he fits in and ardently loves the current career with his speciality, so developing mining pool is just his strong point.

On the other hand, the mining pool provides a definite approach into the profit model of entrepreneurship in the field of Bitcoin. Meanwhile, the mining pool has certain power of discourse on the Bitcoin network, and is capable of promoting the development of Bitcoins towards a better direction.

The mining pool has been Haiyang’s hidden scar all the time. When working in Zeus, he has developed a private mining pool, and tended to develop an open mining pool of Bitcoin or Litecoin. Haiyang recalled that one would have a fair chance of becoming an industry leader at that time if he developed the mining pool of Bitcoin or Litecoin. It now seems a pity for him to miss such an opportunity, and finally he had the chance to develop ViaBTC, which took a load off his mind.

ViaBTC has been in stable operation for over two months, with the maximum hash rate of 120P, ranking sixth in the world. It’s a favorable achievement for newly launched mining pool. Haiyang thought that, in addition to the technical advantage, all the data of ViaBTC is transparent so users can check the historical curves of each mining machine on the website, which provides better user experience.

In terms of fee, ViaBTC is different from other mining pools, the transaction fee is also distributed to the miners. Currently, with the development of Bitcoin network, the proportion of transaction fee is increasingly higher.

Haiyang explained that the commission charge of mining in PPS mode is 4%, plus the approximately 4% transaction fee, the actual rate is far lower than those in other pools, which can bring more returns to the miners. In addition, PPLNS mode can also be adopted, in which mode, the transaction fee participates in distribution as well, and the rate is lower, being 2%, nonetheless, the miner returns are correlated with block generation, the volatility in returns is relatively large, so this mode is suitable for miners with great risk enduring capability.

Self-built high speed network of Bitcoin block, lowered orphan block ratio

After the launch of the mining pool, a lot of optimizations have been done, and the speed in discovering new block is promoted to be the highest in the industry, which also means that the core index — orphan block ratio of the mining pool will be the lowest in the industry. Lower orphan block ratio indicates less invalid Bitcoins mined in the pool, hence, the returns of the mining pool will be obviously higher. Now that orphan block affects returns, then why will it arise?

Bitcoin itself is a distributed network, so it takes time for block to be transmitted and broadcasted in the network. If two mining pools discovered a block with the same height almost simultaneously, a competitive relation will exist between the pools. The way to lower the orphan block ratio is to increase the speed of discovering and broadcasting the blocks, namely, to reduce the time of invalid work. Based on the self-built high speed network of Bitcoin block, ViaBTC can discover and broadcast new blocks of Bitcoin rapidly and efficiently, so as to effectively reduce the orphan block ratio.

The so-called Bitcoin block high speed network is actually the bitcoin client developed by ViaBTC, and has many clusters deployed all over the world including the U. S., Japan, Europe and Hongkong. The connection between the clusters has undergone height optimization, and each cluster will automatically discover and connect the bitcoin nodes around, so that all the current nodes of over 5000 in the world are connected, in this way, a new block can be discovered in any of the mining pools in the first time, thus shortening the time of invalid work. Similarly, once ViaBTC mining pool discovers a new block, it will be broadcasted to the global node in the first time, so as to accelerate the block broadcasting and lower the orphan block ratio.

Haiyang disclosed that, due to the high technical difficulty, currently other known pools haven’t set foot in this field.

What on earth is the influence of the block high speed network built by ViaBTC on Bitcoin? Description will be too abstract, if data is used for expounding, that is, prior to the construction of the high speed network, suppose that someone operates a Bitcoin full-node without any optimization, the average delay for a block to be broadcasted to the node since its discovery is approximately 15 seconds. But currently, with the help of ViaBTC, this time duration is reduced to within 5 seconds, while for some core nodes, it’s reduced to within 2 seconds, which in fact indirectly helps other mining pools broadcast the block, and is conductive to lowering the orphan block ratio of the Bitcoin network. The synchronous speed of Bitcoin is low, and some mining pools mined the block with only one transaction for returns. The assistance provided by ViaBTC accelerates the broadcast of the block, reduces the time of mining empty blocks, lowers the probability of empty blocks, thus enhancing the use ratio of the entire Bitcoin network.

Via Bitcoin Making the World a Better Place

The domain name of ViaBTC was registered in 2015, and inspired by a book named Hackers and Painters written by Paul Graham, the godfather of Silicon Valley Start-Up. Paul established Viaweb at the early development stage of Internet, which is the first application program based on web, since then, people can create their own online stores through web-pages, undoubtedly, it’s a highly successful project at that time. In 1998, Viaweb became the most fashionable e-commerce software, and was acquired by Yahoo with over thirty million dollars. ViaBTC was inspired by Viaweb, and its vision is Via Bitcoin Making the World a Better Place.

The preliminary development of ViaBTC was completed by Haiyang all alone in over 2 months of his spare time. By chance, the first investment was gained by posting on the 8btc forum. In Haiyang’s view, the development of a Bitcoin mining pool is not as simple as imaged by the outside world, to sum up, he thinks that there are three thresholds for developing a mining pool:

Technical threshold: No matter it’s based on open source software or independent R&D, personnel with strong technology and abundant experience are needed; Capital threshold: Since the current mainstream revenue model of the mining pools is the PPS mode, if bad lucks come continually, customer returns will be compensated, so a large number of Bitcoins are needed to withstand risks; Hash rate threshold: All mining pools need stable supported hash rate to guarantee returns and block generation ratio.

The follow-up plan of ViaBTC is to be international oriented, launch the mining pool of Chinese-English version, and deploy the server nodes to the global world, so that the global miners can access ViaBTC in a nearby manner.

“Hope that ViaBTC will be not merely a mining pool in the future, but built into a brand. Meanwhile, hope that a domestic top-level blockchain entrepreneurial technology team will be constructed via ViaBTC. Currently, technical and operating talents are needed, welcome ambitious gentlemen to join our team.” said Haiyang.