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Bitcoin Cash "miner tax" officially approved, with 5% block rewards allocated to development fund

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Bitcoin Cash "miner tax" officially approved, with 5% block rewards allocated to development fund

The controversial mining reward proposal that caused a significant debate within the Bitcoin Cash community earlier has been reintroduced, this time with confirmation from Bitcoin ABC. It is set to be implemented in the upcoming upgrade version (0.21.0), potentially leading to another split among miners.

Table of Contents

  • Tax reduced from 12.5% to 5%
  • Bitcoin Jesus criticizes miner tax again

Bitcoin Cash Internal Conflict Resurfaces

According to previous reports by ABM, BTC.TOP CEO Jiang Zhuo'er proposed at the end of January in a blog post to allocate 12.5% of mining rewards to support the development of Bitcoin Cash infrastructure, threatening to orphan blocks that do not comply with the proposal.

This move undoubtedly raised concerns within the crypto community about the future of BCH. Two weeks after the incident, Bitcoin ABC, one of the main operators of Bitcoin Cash nodes, stated in a blog post:

Bitcoin ABC has been monitoring discussions within the community since the proposal was first introduced, and has been in communication with Jiang Zhuo'er and others. Based on the feedback from the community, we have updated the "Infrastructure Funding Plan" and addressed major issues over the past few weeks. It will be implemented in the upcoming 0.21.0 version.

Tax to be Used for Ecosystem Development

The only silver lining is that the "miner tax" has been reduced from 12.5% of the block reward to 5%, with the following details in the updated funding plan:

  • The plan is only effective for miners who signal support for Bitcoin Improvement Proposals (BIP 9)
  • Tax reduced to 5% of the block reward
  • Funds can be allocated to multiple projects, including those on the whitelist

According to the announcement, the whitelist includes General Fund, Bitcoin ABC, Electron Cash, BCHD, and other major nodes. Bitcoin ABC emphasizes:

As a project, Bitcoin ABC believes that stable funding for Bitcoin Cash infrastructure is crucial for the project's success. While we are aware that certain aspects of this plan are controversial, we believe that the overall benefits will lead to a promising future, enabling Bitcoin Cash to grow, increase competitiveness, and achieve the goal of becoming the best money.

Previously, long-time Bitcoin Cash supporter Roger Ver announced that his mining pool Bitcoin.com decided not to support the proposal of using mining rewards for development funds. After the announcement, he publicly criticized the mandatory imposition of miner tax to avoid causing a hard fork.

Roger Ver criticizes the subsidy program for giving money to those who are bad with money, he believes it is these people who are doing poorly, hence they have no money. (source: youtube)

With Bitcoin ABC's decision finalized, it is unlikely to change unless the proposal is withdrawn. As the crypto community faces another split, the third controversial hard fork of Bitcoin Cash may be imminent.

Bitcoin Cash's share of blocks mined in the past seven days, Bitcoin.com accounts for only 1.9% source: coin dance

Further Reading

  • Mining Difficulty Approaching? Bitcoin Mining Costs Expected to Exceed Ten Thousand USD After Halving
  • Zcash Community Votes to Retain 20% Mining Reward for Development Fund, BCH Community Holds Different Views

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