Vitalik Buterin ‘Highly Applauds’ Bitcoin Cash Mining Cartel’s Proposal To Soft Fork BCH
- Roger Ver, Antpool’s Jihan Wu, BTC.Top’s Jang Zhuoer and Haip Yang of ViaBTC agree on BCH funding plan
- Although redirecting BCH coinbase rewards from the miners to Hong kong corporation billed as voluntary, Vitalik Buterin says it is “a compulsory soft fork”
A group of Bitcoin Cash (BCH) miners are coming together to ensure interest in the cryptocurrency and that it remains a “strong and vibrant” digital asset.
Bitcoin Jesus turned Bitcoin Cash proponent Roger Ver along with Antpool’s Jihan Wu, BTC.Top’s Jang Zhuoer and Haip Yang of ViaBTC are proposing a funding plan, for which “conditions are ripe” and makes sense at this time.
Before the “upcoming bull market in 2020-2021/22” BCH miners want to accelerate its development. But unlike Bitcoin where Zhuoer says the corporate donors like Blockstream have an undue influence on developers and only a few companies have taken the commitment to bear the costs while other members are free-riders, BCH miners want to direct Coinbase rewards to developers.
Directing BCH Coinbase Rewards to a Fund
Under this plan, the entire set of SHA-256 mining including the BTC mining bears the cost, explains the Medium post written by Zhuoer.
For this funding, these miners that represent “a majority of hash rate” in Bitcoin Cash intend to direct 12.5% of BCH Coinbase rewards to a fund, meant to last six months from May 15th, 2020 to November 15th, 2020, that will support BCH infrastructure.
At BCH’s current price of $340, it would mean a total of $6,885,000 sum will go towards having a “positive impact” on Bitcoin Cash and its ecosystem.
A Hong Kong corporation has also been “set up to legally accept and disperse funds.”
Ethereum co-founder Vitalik Buterin says though redirecting rewards from the miners to Hong kong corporation is billed as voluntary, “in reality it is, of course, a compulsory soft fork.”
Burger King’s Shutdown is McDonald's Loss?
He explains that by giving up 12.5% of its reward, BCH’s hash rate will reduce while Bitcoin’s will increase. Removal of the rewards from the total SHA-256 rewards means this cost will be split between Bitcoin and Bitcoin Cash. Zhuoer said,
“The BCH hashrate will be diminished by 12.5%, but BTC mining will bear (most) 97% of the cost of the diminished profitability, because there will be more hash competing for the same BTC rewards.”
While BitMEX Research says, “It is probably a good idea, from a security perspective,” Zhuoer’s idea that Bitcoin miners will bear the brunt of the cost is simply absurd.
This is a bit like Burger King saying they plan to close 12.5% of their stores, yet McDonald's workers will bear most of the costs, since wages will be driven down
— BitMEX Research (@BitMEXResearch) January 22, 2020
Miners will orphan blocks if opposed
The feature will be activated at the same time as the May 15th protocol upgrade, three days after the proposed Bitcoin reward halving date, and as such, the code will soon be ready for testing and deployment.
Because this is under the control of the miners, “who can at any time choose not to continue,” those that do not follow this plan, these miners will orphan BCH blocks. WhalePanda said,
“BCH implementing a 12.5% miner's tax is hilarious and anyone not donating will have their blocks orphaned. Literally a centralized totalitarian regime with a 51% attack threat.”
If the 65% group of BCH miners orphan blocks from the 35%, they would not only retain the 12.5% tax but could also effectively lower difficulty and increase profits. 😅 https://t.co/p4NmYbnPmJ
— Samson Mow (@Excellion) January 22, 2020
This mining cartel that currently owns about 28% of the BCH has rate “can't enforce this coercive soft fork unless they come up with a lot more hashrate,” said Litecoin founder Charlie Lee. This he says is likely to lead to many forks and,
“If this soft fork goes through, it will be very destabilizing because there’s incentive for a large BTC miner to 51% attack this. They can switch to mining BCH and proceed to mine 11 blocks in a row. They get all the BCH, which is at least 14% more profitable than mining BTC.”
While Buterin “highly applauds” the cypherpunks in a tweet,
That said, the thing that I highly applaud is cypherpunks taking public goods challenges seriously. I've been increasingly harping on this topic, as have others:https://t.co/uV5JmbbYHh
— vitalik.eth (@VitalikButerin) January 23, 2020