Another day, another drama at Bitcoin Cash, the chain-split of bitcoin which now risks a second split of itself.
This time it’s over development funding, with the main client – Bitcoin ABC – launching new protocol code that sends 5% of each block to either Bitcoin ABC, Electron Cash, BCHD or a General Foundation if 66% of the hashrate signals for it.
The change is set to go through in May, but it is facing considerable opposition from Bitcoin Unlimited (BU), a client that pays their “Chief Scientist” $100,000 a year to “write articles to explain BU technology and initiatives, collaborate with other developers, carry out experiments, and organize workshops.”
No code there, but somehow this chief scientist is working on “technology to allow blocks beyond 25 GB to be validated on low-cost hardware.”
Beyond. After securing this income to “write articles,” the chief scientist even got one translated into Chinese that “deconstructed the proposed ‘dev tax’ for BCH and argued why such a scheme has no place in a decentralised cryptocurrency.”
All fine and good, but in the entire article we can’t see a suggested solution to the problem of funding devs, rather than article writers.
And it’s a big problem because everything kind of falls on one guy, Amaury Sechet, who isn’t very good at writing articles, but is pretty good at code.
As with most coders his communication skills are in need of improvement, not least because it isn’t clear whether this is being opposed more strongly by BU or Roger Ver who apparently donated some $500,000 to BU.
Ideology v Pragmatism
On the surface and with some substance too, this is all that same argument between ideologues and pragmatists with one basically saying there are universal rules while the other says exceptions prove the rule.
On the ideology side this is a tax that introduces fiscal policy. On the pragmatic side, it’s miners deciding to fund devs.
On the realpolitik side, it’s not clear what role Ver is playing. His employees almost instantly came out against the proposal even though he signed the initial one, but there’s some background between Ver and Sechet.
We haven’t spoken to either of them, so we’re guessing/speculating, but what might have happened is as follows.
So there’s this debate about scalability in bitcoin and it goes on and on and people start getting fed up with it all, so opinion moves towards just splitting, but BU devs were amateurs by their own admission so a proper dev team had to be found.
Coincidentally Blockstream got fed up too and wanted segwit quickly activated so they came up with what Peter Todd would probably call an evil soft fork, but they called it a user activated soft fork.
To counteract that, Bitmain got a dev team to come up with a user activated hard fork led by Sechet.
Then there was this whole segwit2x thing where they all agreed to activate segwit and later on they were to activate a blocksize increase to 2MB.
Bitmain agreed to this segwit2x so, at least as far as they said publicly, they called off the user activated hardfork opting instead for waiting for 2MB.
Sechet however publicly said the fork is going ahead anyway, the chain-split, and the timing was right so on August the 1st 2017 BCH was created.
Fast forward to late 2018 and there’s some politics at Bitmain, Jihun Wu is seemingly kicked out. Together with the bear market, money starts drying up.
Sechet therefore presumably had to turn to Ver for funding. Ver subtly goes public in arguing some protocol change had not been made. Sechet subtly basically says pay up, and very conveniently Wu manages to get back to being on charge of Bitmain.
So there’s now an actual proposal to solve the money problem, but a controversial one and legitimately controversial, not least because it is a fairly hard problem.
Obviously this dev funding debate didn’t start now. There was a whole one in bitcoin too back when, with the initial attempt at solving it being the founding of a Bitcoin Foundation.
The devs that were not on the board of that foundation naturally did not like it, so through numerous maneuvers the foundation become irrelevant and was replaced with the for profit corporation Blockstream.
Plenty of BCH supporters are bitcoin OGs, so this block funding just doesn’t sit right with them.
Meaning if there is a split, it would probably be a fairly genuine split and thus the big question.
To Split or Not Split
It is probable relations between ABC and BU have now reached the point of irreconcilable. The BCH community however is very small, and after the BSV split it became smaller still, but remained largely intact.
Whether small and lean or a broad church is better, is a good question. A question that doesn’t have an answer because if there is a split it would be a unique one, so there isn’t much precedent to it.
Although one can argue the split between big blockers and small blockers was kind of a similar size, but that was more clear cut in as far as obviously capacity has to increase with the question initially being by how much until eventually it became 1MB forever on one side, and now for BU it’s apparently 25 GB.
Here the issue is a bit more liquid in as far as there are reasonable arguments on both sides, but not many reasonable solutions.
Miners can just donate, opposers would say. That assumes miners are swimming in cash after two years of a bear market when that might not be the case at all.
Assuming instead miners can’t afford to just donate, what do opposers suggest is the solution?
Of that we haven’t heard much except for jabs here and there of let the devs without funding go. Something easily said, but Bitcoin Cash runs on code not articles.
So you could split into a code network and an article coin, with ABC maintaining the BCH ticker and name since they the ones that created it. The other one then can do what they always wanted to do, stop this “devs deving” and just write articles.
It is probable most BCH holders don’t care about what miners do with their own block rewards, and they might like the fact they’re making BTC pay for it.
It is also probable the other coin may be able to run on articles, but it is easy to see how this can be a mess.
“There are numerous objections now, I am inclined to start the donation plan after the community reaches basic agreement. If they fail to achieve it, we could set up the General Foundation first, let’s see its operation effect funding by donation, then we could proceed the hash voting next time,” Jiang Zhuoer of BTC.TOP says.
So in the end it sounds like it’s back to the future with a new foundation relaying on donations which maybe works this time even though it didn’t for the Litecoin Foundation.
Perhaps better than splitting however, but it’s not very clear how this coin will be able to continue competing.