Last week, Jiang Zhuoer, CEO of mining pool BTC.TOP posted a controversial 6-month plan on Medium that would see a 12.5% of the BCH block reward go towards developers building on top of the forked Bitcoin chain. The soft-fork plan is based on Chinese-economic theory and supported by major BCH mining pools BTC.TOP, Antpool, BTC.com, ViaBTC, and Bitcoin.com, which make up around 28% of the BCH hashrate.
While Zhuoer termed the contribution as a “donation,” the post outlines a tax all miners would be obligated to give. Miners that fail to fall in line with the new plan will have their BCH blocks orphaned. Zhuoer explained that the basis for such a move is to counter the undue influence corporate donors have on developers and will spread the burden of development cost among the community. He explained “This is the basic public cost of a community” in a subsequent ask-me-anything (AMA) Reddit session.
“It is impossible for developers to develop for free for long-term,” the self-aware post reads. “Although there is some controversy among miners for directing coinbase rewards to developers, it is undoubtedly a far better solution than a few corporate donors’ mechanisms. Adequate funds will benefit the development of BCH, accelerating its development progress, quickly realizing its roadmap development such as the Avalanche project, pushing the development of BCH and its user growth.”
A Hong Kong corporation has been established to accept and disperse funds legally. The details for how the corporation would be governed and how development projects would be prioritized were still “under discussion.”
Critics of the plan rightly point out to implement such a program without allowing for community debate only shows how centralized BCH has become. Despite not being a protocol change, the ease with which major BCH miners are colluding to enforce such a totalitarian policy on the BCH network should be cause for concern. Online users have pointed out that if a cartel of miners has the power to orphan blocks, they have the ability to censor transactions.
The plan to make BCH mining less profitable for miners comes at a contentious time as miners are preparing for the halving, which will reduce the block reward subsidy in half. Zhuoer points out that the new plan might alienate some miners pushing them over to another blockchain that uses the same SHA-256 hash algorithm. The announcement is in stark contrast to recent development on Bitcoin SV, where miners now have additional pathways to earn revenue and spur adoption.
Bitcoin SV (BSV) application development has already exploded as teams look to take advantage of BSV’s greater data capacity and micropayment capability. The Genesis update will remove the default hard cap for block sizes to allow for even greater transaction volumes and most importantly restore miners to the center of the Bitcoin economic model. Bitcoin SV is the only public blockchain project where miners will have a long-term revenue-generating business model and a stable protocol that will be locked down so that protocol developers won’t be able to change it.
The Genesis protocol upgrade on February 4, 2020 is a monumental step in the history of Bitcoin, and will see BSV returned as close as possible to the original protocol as envisioned by Satoshi Nakamoto. Visit the Genesis Hard Fork page to learn more.
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