The software used in bitcoin mining is getting its first big makeover in more than a decade — here’s what’s changing
Employees work on bitcoin mining computers at Bitminer Factory in Florence, Italy.
Alessandro Bianchi | Reuters
Software used in bitcoin mining just got its first upgrade since late 2012, and a coalition of companies including payments giant Block (formerly Square) is trying to help push the open-source protocol forward to become an industry standard.
The move could help open bitcoin mining to more participants by supporting lower-quality internet connections, as well as improving security so miners get properly compensated for their work.
Bitcoin operates on a proof-of-work mining model, meaning that miners around the world run high-powered computers to create new bitcoin and validate transactions. Mining requires professional-grade equipment, some technical know-how, a lot of electricity and a special kind of software.
Rather than directly accessing the bitcoin protocol, the vast majority of miners today work through an intermediary protocol called Stratum, which facilitates communication between the bitcoin network, miners, and the mining pools that combine the hashing power of thousands of miners all over the world.
Miners use Stratum to submit their work and to collect a reward if they successfully complete a new block of transactions.
On Tuesday, a coalition of bitcoin developers is releasing version 2 of Stratum under an open-source license for the mining industry to evaluate and test.
It will take some work to convince the mining industry to adopt the new protocol, so Spiral — a subsidiary of Jack Dorsey’s payments company Block (formerly Square) — is teaming up with bitcoin mining company Braiins to launch a group to test and fine-tune the open-source software before they push mass adoption.
What the upgrade does
Steve Lee, the lead at Spiral, tells CNBC there are several significant benefits to the upgrade, including cutting down on the use of data.
Currently, it is common for each mining rig in a large farm to directly connect to a pool. This setup wastes a lot of energy. Lee says that Stratum V2 supports a proxy that aggregates all the connections and only establishes one connection with the pool.
The process of sending that data is also changing to a more efficient method.
“All told, much less data needs to be transmitted between miners and pools, and this could help miners in remote regions of the world with poor internet,” noted Lee.
The upgrade is designed to improve security, as well. Today, it is possible to steal hash rate from a miner, which can lead to some miners losing money. Hash rate is a term for the collective computing power of the bitcoin network. To resolve this, Lee says Stratum V2 introduces a standard security mechanism with authentication and encryption between miners and pools.
The version being released Tuesday is for initial testing, and in early November, a more robust version will come out that supports additional functionality, including job negotiation — a “feature that represents a historic shift in the censorship-resistant mechanics of bitcoin mining by replacing a pool’s responsibility of assigning work to miners with the ability for miners to select their own work,” according to a joint statement released by Spiral and Braiins.
There are orders of magnitude more miners than pools, so if miners select transactions it is far more decentralized than just a handful of pools, Lee explained.
“Working for industrywide adoption of the upgraded Stratum protocol is one of the most important developments in improving the decentralization and censorship resistance of bitcoin’s architecture,” Lee said.
As for timing, the pilot and integration testing will happen this fall, and next year, the upgraded protocol will likely see greater adoption once miners and pools are confident it is working well.
“I’d anticipate a gradual increase in hash rate in 2023,” Lee told CNBC. “Reaching 10% hash rate by the end of 2023 would be a great success,” continued Lee.
Lee added that it will likely take several years to see the latest version of Stratum replace the original.
“Miners know the benefits of upgrading to Stratum V2 very well, but pushing the entire mining industry over some of the remaining development and adoption hurdles is a big task,” said Jan Capek, co-founder of Braiins.
“Universal standards for running and building Stratum V2 and the efforts of this working group to push the industry forward will provide the momentum bitcoin needs to finally upgrade from a version of its mining protocol that was built a decade ago,” continued Capek.
Similar to the Lightning Network, which is a technology built on top of bitcoin’s base layer to make payments more efficient, there will be different implementations of Stratum V2. However, the open-source version released Tuesday will make it easier to collectively test out the technology. It will also ensure that the various projects can interact with one another.
Block jumping into mining
Tuesday’s announcement is part of Block’s larger push into the bitcoin mining industry.
On the sidelines of the Bitcoin 2022 conference in Miami in April, digital assets infrastructure company Blockstream and Block announced that they were breaking ground on a solar- and battery-powered bitcoin mine in Texas that uses solar and storage technology from Tesla.
Tesla’s 3.8 megawatt solar PV array and 12 megawatt-hour Megapack will power the facility.
Block is also independently working on a project to make bitcoin mining more distributed and efficient.
The idea of making the mining process more accessible has to do with more than just creating new bitcoin, according to Block’s general manager for hardware, Thomas Templeton. Instead, he says the company sees it as a long-term need for a future that is fully decentralized and permissionless.
“Mining needs to be more distributed,” Dorsey wrote in a tweet in October, when he first floated the idea. “The more decentralized this is, the more resilient the bitcoin network becomes.”
Toward that end, the company is solving one major barrier to entry: Mining rigs are hard to find, expensive and delivery can be unpredictable. Block says it is open to making a new ASIC, which is the specialized gear used to mine for bitcoin.
The project is being incubated within Block’s hardware team, which is beginning to build out a core engineering team of system, ASIC and software designers led by Afshin Rezayee.
HAWESVILLE, KY – May 10
Plant workers drive along an aluminum potline at Century Aluminum Company’s Hawesville plant in Hawesville, Ky. on Wednesday, May 10, 2017. (Photo by Luke Sharrett /For The Washington Post via Getty Images)
Aluminum
The Washington Post | The Washington Post | Getty Images
Sweeping tariffs on imported aluminum imposed by U.S. President Donald Trump are succeeding in reshaping global trade flows and inflating costs for American consumers, but are falling short of their primary goal: to revive domestic aluminum production.
Instead, rising costs, particularly skyrocketing electricity prices in the U.S. relative to global competitors, are leading to smelter closures rather than restarts.
The impact of aluminum tariffs at 25% is starkly visible in the physical aluminum market. While benchmark aluminum prices on the London Metal Exchange provide a global reference, the actual cost of acquiring the metal involves regional delivery premiums.
This premium now largely reflects the tariff cost itself.
In stark contrast, European premiums were noted by JPMorgan analysts as being over 30% lower year-to-date, creating a significant divergence driven directly by U.S. trade policy.
This cost will ultimately be borne by downstream users, according to Trond Olaf Christophersen, the chief financial officer of Norway-based Hydro, one of the world’s largest aluminum producers. The company was formerly known as Norsk Hydro.
“It’s very likely that this will end up as higher prices for U.S. consumers,” Christophersen told CNBC, noting the tariff cost is a “pass-through.” Shares of Hydro have collapsed by around 17% since tariffs were imposed.
The downstream impact of the tariffs is already being felt by Thule Group, a Hydro customer that makes cargo boxes fitted atop cars. The company said it’ll raise prices by about 10% even though it manufactures the majority of the goods sold in the U.S locally, as prices of raw materials, such as steel and aluminum, have shot up.
But while tariffs are effectively leading to prices rise in the U.S., they haven’t spurred a revival in domestic smelting, the energy-intensive process of producing primary aluminum.
The primary barrier remains the lack of access to competitively priced, long-term power, according to the industry.
“Energy costs are a significant factor in the overall production cost of a smelter,” said Ami Shivkar, principal analyst of aluminum markets at analytics firm Wood Mackenzie. “High energy costs plague the US aluminium industry, forcing cutbacks and closures.”
“Canadian, Norwegian, and Middle Eastern aluminium smelters typically secure long-term energy contracts or operate captive power generation facilities. US smelter capacity, however, largely relies on short-term power contracts, placing it at a disadvantage,” Shivkar added, noting that energy costs for U.S. aluminum smelters were about $550 per tonne compared to $290 per tonne for Canadian smelters.
Recent events involving major U.S. producers underscore this power vulnerability.
In March 2023, Alcoa Corp announced the permanent closure of its 279,000 metric ton Intalco smelter, which had been idle since 2020. Alcoa said that the facility “cannot be competitive for the long-term,” partly because it “lacks access to competitively priced power.”
Similarly, in June 2022, Century Aluminum, the largest U.S. primary aluminum producer, was forced to temporarily idle its massive Hawesville, Kentucky smelter – North America’s largest producer of military-grade aluminum – citing a “direct result of skyrocketing energy costs.”
Century stated the power cost required to run the facility had “more than tripled the historical average in a very short period,” necessitating a curtailment expected to last nine to twelve months until prices normalized.
The industry has also not had a respite as demand for electricity from non-industrial sources has risen in recent years.
Hydro’s Christophersen pointed to the artificial intelligence boom and the proliferation of data centers as new competitors for power. He suggested that new energy production capacity in the U.S., from nuclear, wind or solar, is being rapidly consumed by the tech sector.
“The tech sector, they have a much higher ability to pay than the aluminium industry,” he said, noting the high double-digit margins of the tech sector compared to the often low single-digit margins at aluminum producers. Hydro reported an 8.3% profit margin in the first quarter of 2025, an increase from the 3.5% it reported for the previous quarter, according to Factset data.
“Our view, and for us to build a smelter [in the U.S.], we would need cheap power. We don’t see the possibility in the current market to get that,” the CFO added. “The lack of competitive power is the reason why we don’t think that would be interesting for us.”
While failing to ignite domestic primary production, the tariffs are undeniably causing what Christophersen termed a “reshuffling of trade flows.”
When U.S. market access becomes more costly or restricted, metal flows to other destinations.
Christophersen described a brief period when exceptionally high U.S. tariffs on Canadian aluminum — 25% additional tariffs on top of the aluminum-specific tariffs — made exporting to Europe temporarily more attractive for Canadian producers. Consequently, more European metals would have made their way into the U.S. market to make up for the demand gap vacated by Canadian aluminum.
The price impact has even extended to domestic scrap metal prices, which have adjusted upwards in line with the tariff-inflated Midwest premium.
Hydro, also the world’s largest aluminum extruder, utilizes both domestic scrap and imported Canadian primary metal in its U.S. operations. The company makes products such as window frames and facades in the country through extrusion, which is the process of pushing aluminum through a die to create a specific shape.
“We are buying U.S. scrap [aluminium]. A local raw material. But still, the scrap prices now include, indirectly, the tariff cost,” Christophersen explained. “We pay the tariff cost in reality, because the scrap price adjusts to the Midwest premium.”
“We are paying the tariff cost, but we quickly pass it on, so it’s exactly the same [for us],” he added.
RBC Capital Markets analysts confirmed this pass-through mechanism for Hydro’s extrusions business, saying “typically higher LME prices and premiums will be passed onto the customer.”
This pass-through has occurred amid broader market headwinds, particularly downstream among Hydro’s customers.
RBC highlighted the “weak spot remains the extrusion divisions” in Hydro’s recent results and noted a guidance downgrade, reflecting sluggish demand in sectors like building and construction.
— CNBC’s Greg Kennedy contributed reporting.
Danish energy giant Ørsted has canceled plans for the Hornsea 4 offshore wind farm, dealing a major blow to the UK’s renewable energy ambitions.
Hornsea 4, at a massive 2.4 gigawatts (GW), would have become one of the largest offshore wind farms in the world, generating enough clean electricity to power over 1 million UK homes. But Ørsted announced that it’s abandoning the project “in its current form.”
“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market, and operational risks have eroded the value creation,” said Rasmus Errboe, group president and CEO of Ørsted.
Reuters reported that Ørsted’s cancellation of Hornsea 4 would result in a projected loss of up to 5.5 billion Danish crowns ($837.85 million) in breakaway fees and asset write-downs. The company’s market value has declined by 80% since its peak in 2021.
The cancellation highlights significant challenges currently facing offshore wind development in Europe, particularly in the UK. The combination of higher material costs, inflation, and global financial instability has made large-scale renewable projects increasingly difficult to finance and complete.
Ørsted’s decision is a significant setback to the UK’s energy transition goals. The UK currently has around 15 GW of offshore wind, and Hornsea 4’s size would have provided almost 7% of the additional capacity needed for the UK’s 50 GW by 2030 target, according to The Times. Losing this immense project off the Yorkshire coast could hamper the UK’s pace of reducing dependency on fossil fuels, especially amid volatile global energy markets.
The UK government reiterated its commitment to renewable energy, promising to work closely with industry leaders to overcome financial and logistical hurdles. Energy Secretary Ed Miliband told reporters in Norway that the UK is “still committed to working with Orsted to seek to make Hornsea 4 happen by 2030.”
Ørsted says it remains committed to its other UK-based projects, including the Hornsea 3 wind farm, which is expected to generate around 2.9 GW once completed at the end of 2027. Despite the challenges, the company emphasized its ongoing commitment to the British renewable market, pointing to the critical need for policy support and economic stability to ensure future developments.
Yet, the cancellation of Hornsea 4 demonstrates that even flagship renewable projects are vulnerable in the face of economic pressures and global uncertainties, which have been heightened under the Trump administration in the US.
Read more: The world’s single-largest wind farm gets the green light
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The Tesla Roadster appears to be quietly disappearing after years of delay. is it ever going to be made?
I may have jinxed it with Betteridge’s Law of Headlines, which suggests any headline ending in a question mark can be answered with “no.”
The prototype for the next-generation Tesla Roadster was first unveiled in 2017, and it was supposed to come into production in 2020, but it has been delayed every year since then.
It was supposed to get 620 miles (1,000 km) of range and accelerate from 0 to 60 mph in 1.9 seconds.
It has become a sort of running joke, and there are doubts that it will ever come to market despite Tesla’s promise of dozens of free new Roadsters to Tesla owners who participated in its referral program years ago.
Tesla uses the promise of free Roadsters to help generate billions of dollars worth of sales, which Tesla owners delivered, but the automaker never delivered on its part of the agreement.
Furthermore, many people placed deposits ranging from $50,000 to $250,000 to reserve the vehicle, which was supposed to hit the market 5 years ago.
The official timelines from Tesla are pretty useless at this point since they haven’t stuck to any of them, but the latest official one dates back to July 2024 when CEO Elon Musk said this:
“With respect to Roadster, we’ve completed most of the engineering. And I think there’s still some upgrades we want to make to it, but we expect to be in production with Roadster next year. It will be something special.”
He said that Tesla had completed “most of the engineering”, but he initially said the engineering would be done in 2021 and that was already 3 years after the prototype was unveiled and a year after it was supposed to be in production:
Musk commented on the Roadster again in October 2024, but he didn’t reiterate the 2025 timeline. Instead, he called the new Roadster “the cherry on the icing on the cake.”
Tesla’s leadership has been virtually silent about the new Roadster since. Two Tesla executives even had to be reminded about the Roadster by Jay Leno after they “forgot” about it when listing upcoming new Tesla vehicles with tri-motor powertrain.
There was one small update about the Roadster in Tesla’s financial results last month.
The automaker has a table of all its vehicle production, and the Roadster was updated from “in development” to “design development” in the table:
It’s not clear if that’s progress or Tesla is just rephrasing it. Either way, it is not “construction”, which makes it unlikely that the Roadster is going into production this year.
If ever…
Electrek’s Take
It looks like Tesla owes about 80 Tesla Roadsters for free to Tesla owners who referred purchases, and it owes significant discounts on hundreds of units.
It’s hard for me to believe that Tesla is not delivering the new Roadster because the vehicle program would start about $100 million in the red, but at this point, I have no idea. It very well might be the reason.
However, I think it’s more likely that Tesla is just terrible at bringing multiple vehicle programs to market simultaneously. Case in point: it launched a single new vehicle in the last five years.
At this point, I think it’s more likely that the Roadster will never happen. It will join other Tesla products like the Cybertruck Range Extender.
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