Stratum Protocol

💡 The Plain-English Definition

Stratum is the communication protocol between mining pools and individual miners — the language they use to coordinate work. Under Stratum, the pool operator chooses which transactions go into each candidate block and sends miners only the hashing work, which concentrates the power to select transactions in a handful of pool operators worldwide.

🤔 But Why Though?

When solo mining became impractical as difficulty rose, miners started grouping into pools. The pools needed a protocol to hand work to thousands of individual miners at once. Stratum — created in 2012 by Marek Palatinus, known as Slush — replaced an earlier approach and became the universal standard, chosen for its efficiency and simplicity.

Under Stratum, the pool operator assembles a complete block template. They pick which unconfirmed transactions from the mempool — Bitcoin’s waiting room for unconfirmed transactions — to include and in what order, and package them into a candidate block. Then they send each miner only the block header, the 80-byte summary at the top of the block, and ask them to find a valid hash — an output of the hashing function that falls below the difficulty target. The miners do the heavy computation, but they have zero say in which transactions go in.

This design creates a significant centralisation risk. In effect, five to ten pool operators decide which of the world’s Bitcoin transactions get selected. A government that wanted to censor certain transactions — sanctioned addresses, politically unwanted payments, the outputs of privacy tools — could achieve substantial network-level censorship just by pressuring those operators. The 2021 China mining ban showed both the vulnerability and the resilience: when Chinese pools lost their miners, global hash rate — the total computing power aimed at mining — fell 50% before recovering, revealing both the concentration and the adaptability.

🌍 The Real-World Analogy

Stratum is like a factory assembly line where a single foreman decides what products to build and hands each worker only their specific task. The workers drill, weld, and assemble with complete efficiency — but they have no say in which products get made. If the foreman decided to stop producing a certain item, the workers would simply stop, without knowing or being able to override the decision.