POWER PULL

Guest Written by Daniel Sempere Pico

By late 2010, the days of solo mining were numbered. As mining difficulty increased and GPUs took over, it became expedient to combine – or “pool” – hashpower to increase the chances of finding a block. By banding together, miners could share the rewards proportionate to their hashrate. The launch of Slush Pool transformed Bitcoin mining, initiating the age of professional mining pools.

Marek “Slush” Palatinus was frustrated. The Czech programmer and Bitcoin user had been solo mining with three CPUs for weeks and hadn’t found a single block. He wasn’t alone. The network’s mining difficulty was rising steeply as enthusiasts shifted from CPU mining to more efficient GPUs. This surge in hashpower meant that solo miners with only CPUs could go weeks or months without finding a block, making participation in Bitcoin’s Proof-of-Work consensus feel futile for many.

There had to be a better way of mining, one that enabled all participants to regularly share in the rewards instead of playing the lottery that mining had essentially become. There was indeed a better way thanks to a recent Bitcoin protocol upgrade that enabled a miner to request a block header and target from a node to work on. This allowed miners to connect their hardware to a central server for tasks.

The technology was now in place for miners to team up by combining – or “pooling” – their hash power and sharing in the rewards for any blocks discovered. The only question was who would be first to seize this opportunity and take advantage of it. Slush stepped up.

Into the Pool

Slush Pool’s initial design was straightforward yet innovative for its time. Users would register on a website and receive a unique credential and a server URL. They could point their mining software to the pool server, which would dish out work, with different non-overlapping nonce ranges for each miner. In essence, all pool miners worked on a common block template but on different parts of the search space, combining their hashpower instead of competing. 

Whenever any miner in the pool finally found a valid block, the 50 BTC reward would not go entirely to the lucky finder. Instead, Slush’s server would distribute the bitcoins proportionally among all participants based on the amount of “shares” of work each had contributed in that round. For example, a miner contributing ~5% of the pool’s hashes over the block-finding period would earn about 2.5 BTC from a 50 BTC block, rather than a 0% chance at 50 BTC.

When Slush Pool launched in late 2010, reactions on the BitcoinTalk forum ranged from excitement to healthy skepticism. But within days, dozens of miners had joined, and by mid-December the pool’s total hashrate exceeded 600 Mhash/s, a significant chunk of the network’s mining capacity.

One forum user who had a lot to say on the matter was Satoshi Nakamoto, who offered practical suggestions for the pooling system. He outlined a method of proportional payouts and suggested giving a bonus to the miner who actually solved the block. His supportive comments lent credence to Slush’s project at a critical early stage.

Not everyone was immediately on board. A few community members critiqued the idea of a closed-source, centralised pooling server. But for the most part, Slush Pool’s creation was welcomed as a practical revolution. It introduced a more stable and professional approach to mining, turning it from a gamble into something like a steady income venture for many.

On December 16th, 2010, Slush Pool solved its first block, officially demonstrating that pooled mining worked. Almost overnight, mining shifted from solo operations to cooperative pools. Bitcoin mining would never be the same again.