V God opposes: BCH collects 12.5% ​​miner tax, V God calls it a mandatory soft fork

12.5% ​​of BCH block rewards are allocated to development funds, causing controversy over centralization, and Vitalik Buterin opposes

Jiang Zhuoer, CEO of BTC.TOP, the largest BCH mining pool, released a proposal through Medium that would allocate 12.5% ​​of BCH block rewards to the BCH development fund . The financing plan will last for 6 months , providing important and much-needed support to the BCH ecosystem. A Hong Kong company has been established to legally accept and distribute funds to pay for development expenses, covering the implementation of full nodes and the research and development of other key infrastructure . The blog post shows that the plan will be implemented in BCH's May 2020 protocol upgrade . The fund will receive about 112.5 BCH per day for six months, a total of about 20,588 BCH. If calculated at a price of $300, the fund will receive a total of about $ 6.075 million . The proposal has received support from other large BCH mining pools, including Antpool, BTC.com, ViaBTC and Bitcoin.com . These five pools account for 34.5% of BCH's total computing power. For miners who are unwilling to follow the plan, orphan blocks will be processed. The article states that this is done to avoid the tragedy of the commons, and that this is not a protocol modification, and that miners can decide at any time not to continue this initiative . The article ends with the signatures of supporters Jiang Zhuoer BTC.TOP, Wu Jihan Antpool & BTC.com, Yang Haipo ViaBTC, and Bitcoin Jesus Roger Ver Bitcoin.com.

Note: The full text of the BCH Infrastructure Financing Plan published by Jiang Zhuoer on Medium :

https://medium.com/@jiangzhuoer/infrastructure-funding-plan-for-bitcoin-cash-131fdcd2412e

Regarding the BCH proposal, ETH founder Vitalik Buterin sent several tweets saying that this is a mandatory soft fork and he does not agree with the solution:

Subject: BCH conducts a Zcash-style soft fork for an in-protocol developer fund.

I have to admit, we’re not even a month into what Mark Lutter calls “weird 2020,” and weird things are happening.

12.5% ​​of the BCH block reward was redirected from miners to “a Hong Kong company.” The article labeled it as a voluntary fork, but in reality, it was a mandatory soft fork .

[ 5. Orphan Block Policy

In order to ensure participation and subsidies for the entire SHA-256 mining algorithm pool, we will orphan BCH blocks that are unwilling to follow the plan. This is necessary to avoid the tragedy of the commons. ]

It’s worth mentioning the irony here: BCH is a blockchain that was born out of a reaction to an ideology that believed soft forks were the only reasonable way to make changes because they were “voluntary.” Now BCH is about to conduct a controversial soft fork and insinuate that it was “voluntary.”

[ d) This is not a protocol change. It is a decision by miners to decide how to spend their block rewards and which blocks to build on. ]

But at the same time, this can also be seen as a natural extension of today’s BCH ideology , especially the “consensus market”: https://medium.com/@Mengerian/the-market-for-consensus-203de92ed844#.y05ia7ee2

The idea here is that miners should propose different consensus rules and try to enforce them by forking non-compliant blocks, which will naturally stabilize towards a consensus rule that the majority can accept.

This idea was first applied to block size (which is what Bitcoin Unlimited did); *will* this idea be applied to the 2^160 dimensional parameter of which addresses get which share of the block reward to fund development?

I disagree with this market-for-consensus idea because it has bad equilibrium and can easily lead to entrenched interests . This miner group seems to respect this concern (after all, BCH has also largely abandoned the consensus market for block size) and make the fund time-limited:

[Built-in developer funding mechanisms like DASH have both advantages and disadvantages. Some of the key differences of this program include:

a) There is no “masternode” vote or any other form of voting. This is a decision made by miners, directly funding R&D.

b) This initiative will last for 6 months (15 May 2020 to 15 November 2020)]

That being said, I highly commend the cypherpunks for taking the challenge of public goods seriously. I, like others, am contributing to a growing discussion on this topic: https://medium.com/ethereum-optimism/optimism-cd9bea61a3ee

The main challenge now is governance . The public goods problem is not a temporary emergency, but a systemic problem that requires a systemic solution. This requires credible neutral governance that people can accept in the long run. https://nakamoto.com/credible-neutrality/

I’m certainly bullish on quadratic funding; here’s my review of the third round of the Gitcoin Grants QF, and a review of the fourth round is coming soon! https://vitalik.ca/general/2019/10/24/gitcoin.html

(Postscript disclaimer: I have no idea how this “Hong Kong company” is structured or to whom the money will be donated. I have a lot of uncertainty about the extent to which this money will actually fund necessary development. Governance is important.)

BitMEX Research agrees with BCH’s approach and uses Burger King’s store closure as an analogy:

From a security perspective, it is a good idea for BCH miners to donate 12.5% ​​of the block reward to the developer fund, which will be implemented after the Bitcoin block reward halving. Although it is only 3 days away from the expected date.

It's a bit like Burger King saying they plan to close 12.5% ​​of their stores, but McDonald's workers will bear most of the cost because wages will be held down. From some perspective this is true, but the point is that Burger King has fewer stores.

Cryptocurrency analyst WhalePanda believes this is centralized totalitarianism:

$BCH implementing a 12.5% ​​miner tax is ridiculous, anyone who doesn't donate will have their blocks orphaned.

This is what a centralized, totalitarian regime looks like, with the threat of a 51% attack.

"A Hong Kong company has been established to legally receive and distribute funds"

Nic Carter, founder of blockchain analysis company Coinmetrics, pointed out the centralization of BCH:

This is what is called “removing the veil of decentralization”.

Alex Bosworth, a Bitcoin Lightning Network developer, was relatively negative, mentioning the threat of a 51% attack and not optimistic about BCH in the future:

Fork coin manipulators are coming up with novel business models to speed up mining rewards instead.

Since they are completely centralized blockchains, it would be easy for them to create a conspiracy to steal block rewards or steal the coins controlled by Satoshi Nakamoto through a hard fork.

Imposing a censorship tax on PoW is a way to cover up a 51% attack that would double the mining rewards for the conspiracy group. Since the group can spend the tax on electricity costs, the corresponding difficulty adjustment means they are the only ones who can economically mine blocks.

Since checkpoints are used for forking coins, not PoW, why do we have PoW subsidy rewards? With a "developer fund", you can imagine more failures. A "community fund" to pay people who work hard on producing Minion memes. An "SEO fund" to pay for occupying Twitter URL names and domains.

BSV investor and billionaire Calvin Ayre believes this will anger anti-tax supporters:

I've talked to several lawyers who say adding a miner tax to BCH would turn the token into a permissionless security. This would disrupt BCH's business model as a crime coin and anger all the anti-tax people who support them. This is like shooting yourself in the foot.