Open vs. Closed-Source Mining Tools

I was promised no punches would be thrown. My name is Alex, and I've been working in the mining industry since 2021 selling mining hardware. I work with a company called MegaMiner now, and I'm really excited about this conversation. Bitcoin mining hardware is fascinating, and it's a very nuanced topic. Looking forward to getting into this. If you could all go down the line and introduce yourselves and talk about what you do in the mining space.

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I'm Gio, a cybersecurity engineer working as head of mining OS and MDK for Tether. I've been a couple of years with Tether. I founded a student association inside the Polytechnic University of Turin focused on Bitcoin education, research, and development. Then I started studying Bitcoin mining and joined Tether. I'm super excited for this panel. Thank you.

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I'm WantClue. I'm the lead developer of the project, an open source small home miner. I've been in this for over three years now, and I'm really excited to talk about open and closed source here.

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Hi, I am Aviral, Bitcoin class of 2013, mining Bitcoin since 2015. I founded Altair Tech four years ago. We sell hardware. We are authorized Canaan distributors. We've worked with many manufacturers quite a bit in the past.

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Marshall Long. I've been mining since 2010. I'm currently the founder of a company called Pleb Source. We sell mini miners. The guys who actually run Pleb Source are here, not me, so they kind of just let me do whatever I want. And I'm a master Twitter troll. That's me.

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WantClue, you're the representative on this panel of the open source side of things. What are the issues that you're trying to solve and that you see in the full mining stack? Why is open source important?

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I think one of the most important things about Bitcoin mining, or Bitcoin in general, is that there's a fundamental issue with how Bitcoin is being operated these days. Bitcoin is more or less the only solution that most of us see. That's the reason why we have all of these conferences. We believe there needs to be some extent where we have our own control over the things that we own, especially money.

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The problem in this industry is that mining itself, for over ten years, has not really been open to the public or really understandable, because these devices are not really belonging to you. You cannot really go into them or try to understand how they work. You cannot really change them or even trust what they're doing.

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One of the biggest examples of that was Antbleed, which happened a couple of years ago, where just by reverse engineering it was figured out that there were backdoors built into devices that allowed the manufacturer to do whatever they wanted, including shutting down your mining equipment. That is quite a big thing, especially when you think about running a megawatt operation and you don't want to have someone else press the red button on you.

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That is one of the biggest reasons for me why I believe open source needs to come back. I don't like having the audacity to go out there and tell people that Bitcoin is the saving factor for the world, yet one third of it is just closed down.

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Gio, Tether is one of the biggest miners in the world. How do you face these concerns of hardware potentially being backdoored, management software, and things like that? How do you prevent outside forces from either gaining information you might not want to share or even influencing your mining operation remotely?

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Nobody wants a backdoor inside these miners, even a small one. I think it's not just a problem for Tether as a company. It's a problem for Bitcoin. Having clearly in mind that this technology can save the world in so many ways, it's important to understand that this is something dangerous for the network.

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We know that, and we are trying to build our own technology, especially when it comes to management tools. We have just announced this new MDK, the Mining Development Kit. It is basically commoditized software infrastructure to operate and maintain your mining sites. It is an integration layer where you can operate every single device you have on site and abstract it as if it were a generic device. You can connect AI agents or whatever you want to this specific engine, this integration layer, and operate whatever you want.

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In terms of backdoors, we don't know if there are backdoors out there. The only thing we can do is build sovereign technology to enable us and everybody else to try to avoid these bad consequences.

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Aviral, you sell to a lot of small miners who don't typically have the ability to build their own software and tools, and might not be sophisticated enough to really understand deeply what the hardware is doing. In home applications, this hardware is coming from China. Is this something that concerns you, or is part of the education process with your customers, or even a discussion topic in general around potential issues with hardware?

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I think for our customers, the most important thing is getting the highest efficiency hash rate at the lowest dollar per hash. If it's for a home application, it has to be quiet and it has to have wireless. But I think open source hardware really is a misnomer or a marketing term. The current term is open hardware, not open source hardware. So Bitaxe is released under a certain open hardware license, not an open source hardware license.

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I think the distinction is really important because open source comes from open source code, which is a software term. Hardware is not made with source code. It's made with components. Applying this to hardware just does not work, because if you look at hardware, you cannot even close source it. As soon as it's released, you can look at it and see what components are there and how they're connected. So open sourcing it doesn't change a lot.

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Also, if you look closely, there are components that are going to stay closed source. Things like ASICs, MCUs, ESP32 display controllers, these are all closed source components inside Bitaxe, and the same for Antminers or any other miners. So I am not a fan of using this open source hardware and software terminology. To me, it doesn't even make sense to call anything open source hardware because hardware is not built by compiling source code. We don't use it in our marketing. We don't acknowledge it. We steer customers toward getting the highest hash rate at the lowest price.

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Marshall, you have been around a very long time as well and have seen the hardware industry change frequently. You've recently been involved with selling these more open products. Do you have anything to build off what Aviral was talking about, or what do you think is important for people to understand about the hardware landscape right now?

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First thing I want to point out is I have a lot of respect for the guys that started the Bitaxe movement. I think it's a great idea. But along the same lines, for me, I've been in the game for a long time, and I want the most amount of people that can have hash rate running in whatever capacity they can.

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For me, the driving force is I want good products that aren't fire hazards. One thing I want to really put to bed is this whole idea of China bad. If you think China is bad, you haven't been to China in the past decade. Let me give you a good example. The crystal on that Apple Watch cannot be manufactured in the States. We don't know how. That can only be manufactured in China. That's just one example.

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The culture of Chinese engineering, by virtue of how they operate, means people do more specialization and more deep technology. That's not saying every manufacturer in China is great. A lot of them are trash. However, we manufacture in Houston, we've manufactured in Europe, and we manufacture in China. We run our own stuff, our own SMT. My partner who runs all the Chinese SMT is right here in the front row. If you want a tour of the place, go. For any SMT that you have, it needs to be about quality, not location necessarily.

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I want to sell good products at a competitive rate. As far as whether you open source it or not, here's the fact: a license is only as good as your ability to enforce it. Same thing with a patent. Same thing with a trademark. I have several patents. If somebody infringes on it, the question is whether I want to pursue them to stop them from doing that. I have the legal basis to do that, but it costs money, and maybe it's not worth the time. For any U.S. patent law, that's really the case. If you want to enforce a license, you have to do that, and that costs money.

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That being said, what the open source guys did for Bitaxe opened a whole new world. Credit where it's due. Outside of that, it's really about the technical advantages. I'll give an example. Our stuff that we manufacture does power in serial. All the open source miners do power in parallel. I think serial is a better design. It's a more complicated design and takes more engineering to get that done, but my design is more robust, cooler, and cheaper because I don't have voltage regulators all over the board.

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The design can be different. The reason I choose to encrypt my firmware is a competitive advantage. I think I have better firmware. I think I have a better design than other people, and I don't want my competitors to be able to knock it off. That being said, our end goal is to get as much hash rate in the hands of as many people at the lowest cost of entry, period. So the whole open source versus not, I don't really care. I want great products at the most competitive price so I can compete, and therefore I decide to lock my firmware down so other people can't take my IP, because I don't want to pursue somebody over a market where the total addressable market is probably less than $50 million. It's not worth pursuing anybody over. My only choice is to out-engineer people so my costs can go down and I can compete better on pricing.

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Just out of curiosity, could I see a show of hands from the audience of people that run Bitaxes at home?

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Cool. The Bitaxe has become a pretty big thing pretty quickly. A lot of people have them in their homes. One of the parts of the project that I've been most excited about is people being excited about getting their hands on Bitcoin miners and just learning about the process, learning about the nuances of the hardware industry. It's a great educational process, not just from people running them, but from people manufacturing them. That has been awesome to watch, like seeing what Kano Alchemist is doing. I've gotten to see his whole setup with what he's building. WantClue, do you have any responses to that? A huge part of the business is not just the physical hardware itself, but also the firmware, which you've been involved with.

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One thing that is really important to us is that it is not negotiable. Yes, there is a certain factor for companies to go out there and say, all right, I have a product, I developed that on my own, it's going to be mine. How many of us are using iPhones or other products? None of that is open source. That's not the point.

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The point is that we have a society, or even the financial system, that we are trying to evolve into Bitcoin. Going out there and having a system that is so fundamentally different from the current fiat system does not, in my opinion, have the option to stay closed source.

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A primary issue is that I do see the benefits of why companies want their devices to be closed down. The biggest problem that is happening is that you see companies going out there and taking your stuff and making that closed source again, while claiming they developed something on their own. Yet you just need like two minutes to figure out that's not the case. Half of that is stolen. It is kind of wild. Don't get me wrong, on one hand, it is totally fine because it proves what you did is fantastic, so others want to use that. That is great.

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The only problem is I want to have a choice. If I use my device, there are certain improvements when it comes to hardware on certain other devices. There are disadvantages on other devices than on others. Everything has pros and cons. But if I have the option and I can choose, I personally say I prefer open source, and the same also goes for the hardware.

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I understand that it is not as easy as with software to make it open source, especially when you think about getting chips through the entire system and making chips, especially ASICs. At the end of the day, it is code. An ASIC chip on an FPGA, if you want to build that, is not just some fancy line drawing. You need to write a program to manufacture them. Then they go through these expensive machines and get made on a wafer and everything else. Way complicated stuff. But that is code, so technically it could be possible to make something open source. Yet we need to realize we are in a world where this will not happen.

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I agree with you that we will not see any open source hardware like an ASIC very soon. The same goes for the protocol that we see from Block. They already said that they will open source the firmware, but for the hardware they can't, not because they don't want to, maybe, but the primary factor is that if you want to produce chips and components, you need to rely on other companies, and they have strict rules that forbid you from doing that.

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All that aside, I personally want to have the freedom. I think it is hard to argue against user freedom.

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Gio, what's your philosophy on this?

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It's pretty simple. I think open source is just a way to build good software, if you think about it. Think about Bitcoin. We are here for that. If Bitcoin was closed source, it basically wouldn't exist. It's a good way to build good software, safe software, and secure software.

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But I also see the point of building closed source software for making money. It does make sense. You want to save some competitive advantage. My only take on this is that this has been the case for the last 20, 30, 40 years, but now the world is changing.

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My vision is that if you want to build something that is going to last for the next 40 years, you build it open source, because this is going to be built in a proper way, either software or whatever. If you want to build something that can let you make a lot of money, you build it closed source, maybe.

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The point is that especially for software, and I am sure it is going to be the case also for hardware in the next years, with AI right now, intelligence is commoditized. We are not talking about closed or open. If you build a proprietary tool with a good feature, someone can just copy it. They can reverse engineer it easily. SaaS is dead. Every single thing we think to build to get a competitive advantage in terms of knowledge is not a competitive advantage because it is going to be copied.

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I think that's the case for software for sure. Making SaaS and making your competition on the last feature doesn't make any sense anymore. I think it's going to be the same for hardware. Maybe not now, because hardware is still connected to something physical. It's not about the composition of the components in the hardware, but the component itself. In a miner, you see the ASICs. How can you reverse engineer the ASIC? You can try, but it's a bit complicated. I'm sure it's going to be easier and easier in the future, but then you need the hardware to manufacture it. Again, I'm sure that in the future it's going to be easier. So far it's not.

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My take right now is that we don't need open source ASICs now. The most important thing for me is to separate the idea of a miner from the ASIC. The ASIC is the chip, and the miner is what you build around it. I love, for example, the heat reuse movement. They're building boilers using ASICs. They're building solutions with solar panels using ASICs. I love those kinds of solutions.

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I don't think we need open source ASICs right now. I just think that opening the environment more will create a lot of new use cases that are going to be very useful for the Bitcoin network. To summarize, right now we have this closed versus open environment. In the future, intelligence is going to be commoditized, so everything is going to be open to everybody.

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This conversation has been contentious for a long time. Firmware developers love to argue with each other and point fingers. A lot of people have used CGMiner in one way or another, and that's been controversial. Aviral, what's your take on this? What do you think the optimal ethical way to interact with the products that people are building is, and to build products yourself?

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Rephrase that question.

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Do you think there's an optimal ethical way to build products, hardware, firmware in general? Some people say it's unethical to take somebody's open source work and then roll it into your own closed source product and claim that it's yours.

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I think it all depends on the license. CGMiner was MIT licensed, if I remember correctly, and I think what many companies did with it was illegal, but they probably never got sued. Many of them were based in China. I think what happened with CGMiner was probably illegal according to the license it was released under, but I don't think they ever got sued.

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Coming back to hardware, I think it's a completely different story. I will congratulate the Bitaxe project that they probably allowed 100,000-plus miners to get their first miner. But I think the innovation there was ESP32 integration with the ASIC itself, which lowered the cost of the controller by an order of magnitude, not the open source part of the miner.

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The ethics are related to the licensing that you attach to the product. But going back to the history of this, I see a lot of people promoting FOSS or GTFO, or demand open source. What that means for hardware developers is they are being pushed into thinking that this is the Bitcoin way, where you should just open source all your work, spend hours and hours and hours, and just give it all away.

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But this approach has actually almost never worked. If you look around, there is no real successful open source hardware. Not your phone, not your watch, not your car, not your fridge, not this microphone. It's been tried many, many times. Look at MakerBot. Look at Prusa for 3D printers. It fails every single time. Either these companies pivot to closed source, or they just go out of business.

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I think this FOSS or GTFO idea is sending developers down the wrong path of ruin. Instead of going straight to the market by making proprietary products, they are now forced to go to a foundation or a donation model for their work to support themselves. You're welcome to try it again. I think this idea doesn't work, and it's just going to lead to wasted effort.

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The foundations themselves are open to political capture or ideological suicide. We've seen this with 501(c)(3)s over and over. We just saw this with Electronic Frontier Foundation, Wikimedia Foundation, SPLC. It just keeps happening. So to say that we're here to destroy the proprietary mining empire, but then lobby to your own foundations to fund your open source work, I think that's hypocrisy. It's going to be a dead end no matter what.

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Maybe just a quick response to that. There is a really important difference to make between Open Source Miners United as a community, and I know there has been a lot of debate going around, and a small entity that is its own company, which claimed to receive donations but then refunded all of that.

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Unfortunately, this is a very nuanced, complicated topic that we could probably talk about for 24 hours straight if we could. Marshall, I just want to give you a chance. We have a minute and a half left to respond to anything that you want to share.

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I'm a capitalist. If you want to buy an open source whatever, buy it. My goal is to build something that's better than what you can buy and to also protect my competitive edge. But that doesn't mean that you can't go buy something that might be more expensive because you want to tinker on it. There's a market. That's fine. That's not my goal.

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My goal is to get as much hash rate in as many hands as possible. I don't care about anything else. At the end of the day, if you think that it's important for you to be able to tinker or tune or contribute to a project, look, Bitcoin Core has had its own fair share of problems. It's just not a business model. It's impossibly hard. WantClue has done a lot of great work, but it's thankless work. At the end of the day, it's really hard to get paid to do that, and you're reliant on other people's ability to donate. When the weather is good, it's fine. When the weather is not good, it's tough, which means all the smart people have a high tendency to get washed out, to Aviral's point.

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My goal is to provide as many people as possible a low entry point. I don't care about anything else. Bitcoin changed my life and changed everybody's life on this stage. I think what's most important is to try to drive decentralization through a low barrier to entry with hardware. I don't care about anything else.

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Well, that's it. We have to wrap up, but I think we'll all be around this week if you want to talk to any of us and keep the conversation going. All of these guys on this panel are incredibly knowledgeable. Thank you guys for being on it. Let's give them a big round of applause.