BTC Guild.

Michael Marsee, known on the BitcointalkBitcointalkThe Bitcoin forum Satoshi Nakamoto opened in November 2009. Much of Bitcoin’s early history, from the pizza offer to Satoshi’s last post, happened there. forum as eleuthria, opened BTC Guild in May 2011 and ran it from the United States. It was a mining poolMining poolA group of miners who share the work of finding blocks and split the rewards, so each gets paid steadily instead of rarely., a service through which many miners share the work of finding blocks and split the rewards. Each BTC Guild block’s first transaction paid the whole reward to the pool’s own address, and the pool paid its miners from there, either a set amount for each piece of work they sent or a share of each block it found. These were payments to the pool’s miners, separate from the transactions confirmed inside the block. Its blocks carried its name only from November 2011, so mempool.space’s count leaves out its first months, for which the pool’s own records list 3,650 blocks.

By 2013 BTC Guild was the largest pool, and that March its size gave it the deciding part in an emergency. On 11 March a block appeared that Bitcoin 0.8, the newest version of the software, accepted but older versions rejected, and the chain split in two: in effect an accidental hard forkHard forkA change that loosens Bitcoin's rules, so nodes running old software reject the new blocks. Without near-universal agreement it splits the chain.. About 60% of mining power was on the 0.8 side, about half of it BTC Guild’s, Marsee said, so the split wouldn’t end by itself. Bitcoin’s developers agreed that the safest way back was the older chain, which every version accepted. “I can single handedly put 0.7 back to the majority hash power,” Marsee wrote in their chat. “I just need confirmation that thats what should be done.” He got it, and Pieter Wuille told the developers’ mailing list that BTC Guild was switching.

The switch cost BTC Guild the blocks it had found on the 0.8 side. Gavin Andresen’s write-up of the fork, BIP 50, credits Marsee and Marek Palatinus, who ran Slush’s pool, with switching back “despite the fact that this caused them to sacrifice significant amounts of money”. Arvind Narayanan, a computer scientist at Princeton University, later argued that the split ended quickly only because one pool could tip the balance: spread among thousands of small miners, the same move might have stalled while each waited for the others. Moving first, he added, also made sense for BTC Guild’s own business if the older chain was going to win anyway.

The same size worried people. A pool with more than half of all mining power could rewrite recent blocks, an attack known as a 51% attack51% attackOne miner or pool controlling most of the hashrate. They could reverse their own recent payments, but not steal coins or change the rules., and BTC Guild was growing fast. Much of that growth came from ASICMINER, an early maker of mining machines, whose own machines mined mostly through BTC Guild, the developer Gregory Maxwell wrote; the pool also sold ASICMINER’s small USB miners in its online shop. On 5 April 2013, by Marsee’s count, it had found 36.6% of the previous 2,016 blocks.

“Obviously I can’t wait until the pool is 49.9% to start taking measures,” he wrote, “even though a 51% attack is only a true threat if the person controlling it uses it.” He set out a plan to make miners leave of their own accord if the pool passed 40%: fewer new accounts, higher charges for new miners and an end to older ways of connecting. Days later ASICMINER told him it would spread its next machines across more pools, or mine alone. BTC Guild never reached half.

Marsee first announced the pool’s closure on 31 October 2014. Pools were shrinking as manufacturers built private mining farms, he wrote, so one successful hack could now cost close to a year of the pool’s earnings; and US regulators, starting with New York’s, might make pools identify their miners, who would simply go elsewhere. He hoped the closure would show “that not all Bitcoin businesses end with somebody stealing funds from their users”. Within days he called it off, after people offered to buy the pool.

On 15 June 2015 he announced the closure again: “this time the decision will not be reversed.” The sale had never happened, he wrote, because of his “personal attachment to the project and concern over user privacy and security”. By then the pool had under 3% of all mining, too little to recover from a hack, and the BitLicense, New York’s new licence for bitcoin businesses, could reach it because some of its miners were in New York. Its servers stopped on 30 June 2015, and its last block, 363,142, was found that morning.