Bitmain at the heart of a new scandal


Tue 04/06/2024 ▪
8
min reading ▪ acc
Nicholas T.

A Chinese manufacturer of Bitcoin miners would knowingly ensure that some of its machines tread in the dirt.

bitcoin

Bitmain caught in the act

Pool Ocean has come under a lot of criticism recently due to the abnormally high number of empty transaction blocks. Three out of thirty blocks (10%!) to be exact.

Before we go any further, let’s explain what a pool is and why they sometimes create empty blocks.

A pool is a type of cooperative that prepares blocks from which miners work. They are the ones who choose the transactions. They also receive rewards that they redistribute to miners in proportion to the computing power provided. This system allows miners to smooth out their income.

The main pools are Foundry, Antpool (pool under Bitmain), F2pool, Viabtc and Binance pool. In 2023, they collectively found 45,707 blocks, or 84% of the total. That’s a lot for a network that’s supposed to be decentralized…

Knowing that F2Pool and Antpool are most likely part of the Bitmain controlled nebula.

Network centralization is even worse than it seems when you look closely. The founder of the Ocean pool said this weekend that many small pools are just fronts for Bitmain. This claim is based on three things:

  1. Small pools clearly use the blocks prepared by Antpool.
  2. They share the same depository for rewards earned from each block (Cobo).
  3. There is an agreement to save pools that are down on their luck (our article on this topic: Bitcoin – Pool Cartel Exposed)

For the founders of the ocean pool, “Bitmain is not just behind Antpool. This firm probably accounts for more than 50% of the blocks and manufactures more than 90% of the machines used to mine Bitcoin.

Empty blocks

As for empty blocks, they have always existed. In 2023, there were 147 of them, i.e. 0.27% of all mined blocks. Their existence is due to the fact that the fund has two options when it finds a block:

-Send your miners a block containing the following transactions.

-First send an empty block of transactions that simply contains the hash of the previous block. The advantage is that this block comes faster, allowing miners to get to work sooner. The hash of the previous block is actually the only piece of data absolutely necessary.

Explanation :

The data that miners hash (go through the SHA-256 algorithm) is in the block header. This header contains six pieces of information: Version Number / The hash of the previous block / Merkle tree root hash / Time Stamp / Hash target value / Nonce.

A nonce (short for “number used only once”) is a number that miners frantically change until they find a valid block (ie a hash of that header starting with a certain number of zeros).

All of this means that quickly receiving the hash from the previous block allows miners to hash for a few extra seconds. And the fact is that there are sometimes blocks in this time frame. The result is empty blocks.

Yes, blocks are sometimes found every few seconds, not exactly every 10 minutes. It is not uncommon for an entire hour to pass without a new block.

Something fishy

We get to the heart of the scandal. Given what the probabilities are, it is not at all normal for 10% of the blocks found in the pool to be empty.

Ocean’s apparent bad luck has led research to conclude that some miners (antminers) are taking too long to replace an empty block with a block full of transactions.

Rather than a manufacturing defect, however, it seems that Bitmain was actually deliberately putting obstacles in the way of its competitors. Here’s an explanation from @GrassFedBitcoin, founder of Ocean:

“Why aren’t empty blocks replaced immediately after blocks containing transactions are received?

Because Bitmain’s antiminers are shit. What we didn’t know was that they were sucking on purpose. Antminers continue to work on empty blocks – sometimes for more than 60 seconds – even after receiving a block full of transactions for a long time.

At first, we thought the problem was the design of the ASIC (electronic chip) itself, and thus poor engineering on Bitmain’s part. But it turns out we were wrong, this delay comes from the antminers firmware.

We know this because they just released a fix (for the S19 K Pro and XP models). But what are the chances that this patch will be released right after Ocean starts asking publicly? Apparently they had a patch and used it on their own antminers. »

Unfair competition leading to centralization of pools

In short, some antminers find empty blocks more often because it takes too long to replace them. Which leads some to claim that Bitmain is selling machines designed to be less efficient than the ones it uses for its own account.

This is why Whatsminers from its competitor MicroBT and ASICs from other manufacturers do not find so many empty blocks…

Additionally, it goes further than empty blocks:

“They’re not just empty blocks that are replaced forever. This is actually the case with all blocks. This is because the funds are constantly updating the transactions within the block as transactions offering higher fees come in.

Imagine a super lucrative business popping up. All pools immediately send the new block to hundreds of thousands of miners who (due to the Bitmain firmware) will ignore it for a while, except for the miners working with the Antpool pool (which belongs to the Bitmain nebula).

It’s not hard to understand Bitmain’s motivations, especially as time goes on and transaction fees naturally become a bigger and bigger part of miners’ income. »

These actions are not surprising given the company’s past and the “Antbleed” and “ASICBoost” scandals.

Antbleed refers to the famous backdoor that allowed any ant miner to be stopped remotely. Bitmain defended itself by assuring that it was simply a way to stop stolen ASICs. Except that the code was immediately patched as soon as it was discovered…

Another case that made noise is related to the “ASICBoost” technology. The latter offers an increase in efficiency by reducing the number of calculations necessary to generate hashes. This technique saves energy and cuts faster.

We will conclude by emphasizing that the latest generation MicroBT miners are already more efficient than Bitmain miners. Our article on this topic.

Also, don’t miss our article on fund centralization: Bitcoin and the threat of pools.

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Nicolas T. avatar

Nicholas T.

Report on Bitcoin, “Goddess of wisdom, feeding on the fire of truth, exponentially smarter, faster and stronger behind a wall of encrypted energy”.

DISCLAIMER OF LIABILITY

The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.

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