ABC devs pushing ahead with BCH mining tax

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Although miners already can donate to a development team of their choice, without coercion or bias, this free market principle is under attack as some BCH developers feel the community is not doing enough to spur growth in the ecosystem. After very public criticisms from many quarters of the cryptocurrency community, on February 15, leading BCH developers posted a blog explaining that they have decided to continue forward with a polarizing initiative meant to compensate developers supporting the BCH infrastructure.

The post was written by the ABC Dev team, which is led by self-described “Benevolent Dictator” Amaury Séchet. Its Infrastructure Funding Plan (IFP) is a pleasant way of describing the mandatory tax ABC developers have decided to impose on the BCH mining community. The team asserts that the steady funding of the BCH software protocol development is critical to the success of the project. They claim the overall benefits of the plan outweigh any potential downside.  

IFP will be implemented in the upcoming 0.21.0 node software release. The plan differs from Jiang Zhuoer’s original proposal in the following ways:

• The program will only go into effect if triggered by miners via BIP 9.
• The amount is reduced to 5% of the block reward.
• The funds can go to more than one project and can go to one of several in a whitelist.

For those that don’t know, BIP 9 is a method of rolling out soft-fork upgrades to the blockchain. Miners will have to mine blocks, a ‘vote’ in its favor requiring 66% out of the trailing 2 weeks of blocks to activate, for the redirection to take place. The method was previously employed when BTC Core forked away from Satoshi’s vision of Bitcoin when they enacted Segregated Witness. 

The whitelisted projects have already been selected. General Fund, Bitcoin ABC, Electron Cash, and BCHD will receive the redirected IFP coinbase block rewards. Noticeably absent from the list is Bitcoin Unlimited, the second largest development team behind the BCH protocols.

1/2 Amaury Sechet is literally modifying the BCH protocol to issue coins to him and his friends. Due to the poison pill, miners and exchanges must upgrade before May 15. If they do as usual and download the new version of ABC, his plan succeeds by defaulthttps://t.co/w5eOR0mV1y

— Peter R. Rizun (@PeterRizun) February 15, 2020

The projects were chosen based on the following broad criteria, which include having a common infrastructure, things that different products build on top of. The project must also provide a “public good” and use open source software licenses compatible with other projects in the BCH ecosystem. Finally, the plan should prioritize projects that are in need of money.

Gone from the revised plan is mention of a Hong Kong entity tasked with distributing funds replaced by a “General Fund” whose details have yet to be disclosed. Also seemingly removed is making the IFP a temporary measure. This latest modification lines up with Bitcoin’s ABC stated purpose of creating a “stable” funding mechanism for devs. 

Also left unanswered is how driving BCH miners out of the ecosystem and over to a more profitable public chain helps secure the BCH blockchain and curb centralized control. The fact the initiative pushes BCH even further from the incentive structure outlined by Satoshi seems of little concern to the ABC team. What will happen if Bitcoin Unlimited fails to follow suit with the compulsory tax? The ensuing chaos could cause a Hash War 2.0.  

All of these unanswered questions remind me of a famous quote from the movie Batman. “Some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn.” Seeing how risky IFP remains, that is the only explanation I can see for why Amaury and others would rush though the half-backed plan around the time the halving is set to take place. Regardless, the complete dysfunction inside BCH has undoubtedly caused many to question the competence of the project’s leaders. BCH remains a long way off of from becoming a peer-to-peer global cash system.