Marathon Launches Slipstream Service to Optimize Non-Standard Bitcoin Transactions
Marathon launches service to specifically process large and non-standard Bitcoin transactions. Novel use-cases for these transactions are in constant development.
Marathon Digital Holdings, the largest Bitcoin mining company by market cap, has launched a new service called Slipstream which seeks to significantly improve large and non-standard Bitcoin Transactions.
This new service was announced on February 22 via press release, which detailed some of the background for its development. For one thing, Marathon is actually in a pretty unique position to offer a program like Slipstream, as their proprietary mining pool is a fairly substantial one. Generally, large and especially non-standard transactions are specifically rejected by smaller mining pools that offer this service, even if the transactions themselves are generally compliant with consensus parameters. For many of the existing transaction submission services, on-chain protocols like Ordinals are too much trouble to be worth the cost, especially when certain devs in the community take a harsh attitude towards the entire project.
For Marathon, however, the equation is somewhat different. As their CEO Fred Thiel stated, “While direct transaction submission services exist, most are rudimentary. Slipstream provides sophisticated users with a simple, transparent, and trusted means of adding complex Bitcoin transactions to the blockchain, provided they adhere to Bitcoin’s protocol. Marathon is uniquely capable of offering these services because of our scale, our mining pool, and our team’s technological expertise”. He went on to add that “We believe Slipstream is mutually beneficial for the industry and for our organization, and we look forward to building on this announcement to further assist those who are building on Bitcoin”.
This system would have one very direct benefit to the entire Bitcoin ecosystem: it would allow the blockchain to process some of these unusual transactions at a rate similar to the standard ones, in a market environment where these concerns are looking very pressing. The next Bitcoin halving is generally anticipated in April, and it will have broad ramifications over the entire world of digital assets. Essentially, the blockchain is designed so that the rewards for mining new bitcoin will diminish at regular intervals over its entire life cycle, forcing miners to continually adapt their methods. However, miners do not only earn profits by mining new Bitcoin, as they can also take a commission to resolve other user’s transactions on the blockchain. Thanks to the rise of non-standard transactions like Ordinals, these fees have gone through periods of immense spiking.
These unusually high fees have created some truly unusual market conditions, and the halving may very well exacerbate them to an intense degree. As Forbes reported, the Ordinals-related spikes in 2023 led to a period where miners got an unreasonably high percentage of income from processing these unusually expensive transactions, to the extent that it represented a real lifeline in a chaotic market. Although the miners may have benefited indirectly, the increased fees were a serious detriment to everyone else; it became comparatively difficult to use Bitcoin as an actual currency, as even the most mundane transactions were taxed at higher levels.
Although the fees may have fallen in the intervening months, Ordinals is far from a dead project. If new developments in blockchain inscriptions coincide with the halving, it’s very easy to see a situation where large numbers of miners make more income from processing these transactions than by actually mining Bitcoin. This would not only disrupt the halving’s cyclical ability to force the mining industry to improve efficiency and trim the “dead weight”, but it would also create a direct financial incentive for making the blockchain less usable. Ordinals developers, for their part, are continuing to experiment with new forms for the protocol at the high rate of innovation Bitcoin is known for. For example, in late February, Ninjalerts announced a successful new use-case: running N64 games directly on the blockchain with Ordinals.
Ninjalerts claimed that the goal of this project was in conservation, using the sturdy and decentralized verification of the blockchain to preserve these games as their initial hardware is disappearing. Considering that 87% of games from this era and earlier are lost, a group like this would have plenty of incentive to use this new protocol to its fullest extent. In other words, this is just a simple demonstration: we have plenty of reason to believe that Ordinals usage can spike again, especially in relation to diminished mining rewards. If we wish to keep the blockchain in an optimally usable state, Slipstream may provide a critical service.
Of course, this is not to imply that Ordinals by itself is an active detriment to the Bitcoin community as a whole. Quite the opposite, Ninjalerts’ plan to durably document media for everyone is very much in line with the entire ethos of Bitcoin. Nevertheless, it’s a real sigh of relief that a mining firm as substantial as Marathon has launched a program to specifically process non-standard transactions, so Bitcoin’s market forces can act in more or less their natural state. Bitcoin is a currency, not a financial device to accumulate more fiat. It should be usable, and its miners should be improving their operations at a constant pace. And considering that Marathon can count 15k bitcoin in their war chest to survive the halving, it seems safe to say that Slipstream will offer its services for the foreseeable future.
Marathon did also announce that Slipstream would be able to process abnormally large transactions, but this possible source of blockchain congestion is actually somewhat lowered at the moment. New data collected on Bitcoin order books suggests that transactions of this sort are at their most liquid since last October, when fees were highest all over the blockchain. Order books are larger-than-average collections of buy and sell orders, categorized at a series of different price points. For Bitcoin, these book order transactions within 2% of the actual value of Bitcoin have increased by 30% since the ETF approval in January. Large transactions themselves can have an influence on the price, as the industry is no stranger to extensive coverage when whales throw their weight around. If large purchases have, on the whole, stayed within 2% of Bitcoin’s actual value, it’s a clear sign that the market is liquid enough to easily accommodate this sort of deal.
Details on Slipstream’s operational capacity and other such technical details are still somewhat sparse, beyond what Marathon detailed in their press release. Still, it’s a very encouraging sign that one of the largest mining firms in the world has undertaken this project with the halving mere weeks away. We’ll have to observe the markets and see how capable Marathon is of keeping the blockchain decongested, but they seem very confident in their ability to make these quality-of-life improvements. Bitcoin developers can find new and novel use-cases, and still maintain the overall vision of a new model for currency worldwide. With confident innovators like this on our side, it’s easy to see why Bitcoin has such a train of successes.
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This news is all very encouraging. thank you.👍🏻😊
We are fortunate to have so many forward thinking people in Bitcoin.