Jiang Zhuoer of BTC.Top, the man credited with spending $10 million to get BCH running during the chain-split in August 2017, has come forward with a bold statement on protocol funding.
“We intend to direct 12.5% of BCH coinbase rewards to a fund that will support Bitcoin Cash infrastructure. This funding will last for 6 months, and it will provide significant and much needed support to the Bitcoin Cash ecosystem,” Zhuoer said under a statement also signed by Jihan Wu of Antpool and BTC.com, Haipo Yang of ViaBTC and Roger Ver of Bitcoin.com.
The most controversial announcement in Zhouer’s statement is what follows:
“To ensure participation and include subsidization from the whole pool of SHA-256 mining, miners will orphan BCH blocks that do not follow the plan. This is needed to avoid a tragedy of the commons.”
Another controversial aspect is: “A Hong Kong corporation has been set up to legally accept and disperse funds.The funds would be used to pay for development contributions to full node implementations as well as other critical infrastructure.”
ViaBTC alone has some 3x BCH’s current hashrate. So they can probably quite easily enforce this orphaning policy at a technical level. While at a social level it might be less smooth.
BCH developers are metaphorically starving because voluntary donations just don’t work unless you have a massive marketing team that constantly nags for donations.
That’s a problem because some BCH devs can command quite a decent salary in other sectors, so someone has to pay for this protocol development.
Miners clearly feel they are the ones that have to do so because in a way “BCH” is their product which they produce for the market hopefully at some profit. So ultimately it rests on them to ensure the “product” is improved.
As all miners benefit from such improvements, they’ve taken the bold step of enforcing on all miners this “donation.”
How exactly they plan to enforce it is not too clear, with the debate already out there on whether this is a soft fork or something different or a hardfork.
“It’s worth noting the irony here: BCH, a chain that was born as a reaction to an ideology that claims that soft forks are the only legitimate way to make changes because they are ‘voluntary’ is…. making a controversial soft fork and insinuating that it’s voluntary,” Vitalik Buterin, ethereum’s co-founder, said.
Buterin dances somewhat carefully around the issue, but ethereum devs took not just 12.5% for six months, but 15% of the then total supply.
For simplification the equivalent would be some 1 million BCH, or around $300 million. Now that would have been a proposal.
Markets v Puppets
You’d expect no one to like this proposal except for a good portion of BCH holders. ETH arguably is BCH friendly, but still who wants a strong potential competitor. Blockstream hates it of course. Bitcoin Unlimited is trying to get “market share” from Bitcoin ABC. So a lot of the discussion has many colors.
There are however “legitimate” points to be made. Why Hong Kong, who distributes, how exactly, when too, and also under what criteria?
They could have just sent it to the donation address of Bitcoin ABC, but presumably they intend to support the other clients too and also maybe protocol related aspects which don’t necessarily fall under a client.
The orphaning raises slippery slope objections, and this is the main point of some controversy because you get into philosophical arguments about should and is.
There is no point in us taking any position on those arguments because we would actually like to see BCH miners misbehave.
This proposal obviously has very good intentions, but if they censored transactions or otherwise engaged in what is “objectively” misbehavior, then some BCH-ers who already want to see BCH change its Proof of Work as it is technically insecure due to being minority hash, would jump at the opportunity to do just that as misbehavior would obviously tilt matters.
So if they misbehave it would be good for BCH, and where the only “objective” measurer of this proposal is concerned, they seems to be in favor of it:
BCH has fallen a bit in line with all other coins, but it has fallen less than any other top crypto.
It hasn’t risen, perhaps because $6 million isn’t that much and it’s a one off that raises the question what happens once this too runs out, but if the market didn’t like this proposal then BCH would have fallen quite a bit.
Instead, it’s BSV that’s shown as the biggest loser. For good reason too because their dev team could hardly compete with a starving BCH. With a well funded one… BCH did briefly overtake eth in market cap once.
ETH however burns in a year 3 times more than this entire proposal, so it’s not too clear whether it would make much of a difference.
If it was $60 million, then you’d be talking, but it’s in BCH so “just” a 10x in price and you get a player.
So this proposal kind of puts BCH back on the table with Amaury Sachet, BCH’s lead dev, potentially able to do quite a bit with a good portion of this $6 million.
The obvious one being getting more 10x devs as he calls them so that things can move as the halvening now stands just 70 days away for BCH.