Bitcoin (BTC) startup Mummolin, has raised $6.2 million in seed funding led by Jack Dorsey, among others, as it aims to give miners control over their block rewards from the network.
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 the miners their block rewards directly, without meddling by a centralized entity, unlike some of the existing pools, according to a statement.
Long-time Bitcoin core developer and Mummolin co-founder Luke Dashjr said, “We are launching as the most transparent pool and also the only non-custodial pool where miners are the recipients of 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 join together to coordinate their efforts and then share any resulting rewards with the miners.
The traditional bitcoin mining pool can act as a centralized entity such that it takes custody of the rewards paid by the network and then distributes them among miners, Mummolin’s co-founder and president Mark Artymko said in the statement.
“This gives them the ability to withhold payment from individual miners, whether by their own choice or by legal requirement,” he added. “OCEAN’s non-custodial payouts directly to miners from the block reward remove this risk and the pool’s undue influence over miners.”
The new pool has received social media praise from industry observers. “It’s a mining pool with more decentralization built into it at the foundation, which in my opinion is good for the Bitcoin network,” said Lyn Alden, the founder of Lyn Alden Investment Strategy.
The new venture is essentially a re-start of Dashjr’s previous zero-fee pool Eligius with updated code, said Dashjr in an X post.
“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 pool expects to roll-out 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, the Bitcoin Opportunity Fund, and other strategic partners.
Bitcoin’s censorship problem
Ocean’s debut comes as some legacy mining pools have been the subject of controversy for censoring certain transactions, as “censorship resistance” is considered by many Bitcoiners to be a cardinal principle of the largest and original blockchain.
Most recently F2Pool – the third biggest Bitcoin mining pool – drew drew ire on social media after a report that it might be censoring transactions from an address subject to U.S. government sanctions.
“OCEAN is solving a problem for Bitcoiners that I think all of us feel—further centralization of pools and mining pools that could plague Bitcoin, and how that risks a bunch of Bitcoin attributes that we hold dear,” said Dorsey.
Read more: Bitcoin Mining Industry Is at a ‘Crucible Moment,’ JPMorgan Says
