Video version here:
Bitcoin Cash might be splitting in two this November... Again.
This time the issue revolves around whether to take a portion of the Bitcoin Cash mining reward and give it directly to a team who think they deserve it.
There are two clear sides to this issue. One side is Bitcoin ABC, and the other is a coalition led by the Bitcoin Cash Node which includes; former members of ABC, Bitcoin Unlimited, other full nodes that service Bitcoin Cash, all major wallets, and almost all service and token providers, among others. The contention is over mandating giving a part of the coinbase reward to Bitcoin ABC, a single development team of many currently on Bitcoin Cash, who say it'll be put to good use developing the chain. Bitcoin ABC believes they are not properly receiving the resources they need to scale bitcoin cash to global money. Since the inception of bitcoin, the full reward has always gone entirely to the miners who found the block.
Bitcoin ABC called this the Infrastructure Funding Plan, or IFP. The earliest form of IFP was first introduced by Jiang Zhour of BTCTop in February of this year. It originally redirected 12.5% of the coinbase reward towards a private development company, similar to the ZCASH funding model. Jiang has since retracted his original plan due to the lack of common agreement, while Bitcoin ABC has taken their proposal through a few new iterations - one of them simply gives the money to a multisig that consists of Amaury Sechet, Bitcoin ABC's lead developer, and two other people of his choosing. Another had a voting period for miners to show their support. By this time, a large part of the ecosystem already disagreed with the IFP - and only one single block had voted in support in many months.
Shortly after the IFP was introduced, the Bitcoin Cash Node, also known as BCHN, was announced, led by freetrader, who was one of the individuals, that together with Mr. Sechet, built the client that forked Bitcoin Cash, Bitcoin ABC, from Bitcoin BTC. They’ve since had a falling out, and have landed on different sides of the next chapter of peer to peer cash.
The current IFP iteration that ABC is going to implement takes a mandatory 8% of the coinbase reward from miners and diverts it to a multisignature wallet that ABC controls. 50% of this is promised to go to various ecosystem proposals, and will be voted on by large stakeholders in the ABC coin, as well as miners, via an organization called the Global Network Council. The other 50% is not subject to such debate and is reserved solely for Bitcoin ABC.
This IFP would be the biggest change to a Bitcoin chain… ever. Compared to simply raising the blocksize, like when BCH was first made, this directly changes the incentives of the chain. For one, the ABC team would be solidified as the only team directly subsidized by the protocol, making them effectively the only team who controls any changes to the chain. "No central point of failure" then goes out of the window. As for the other half, there will be politicking and campaigns to fight over which projects get this free money from the coinbase, as large stakeholders and miners must convince eachother their proposal is worthy of their peers’ votes.
And of course, since ABC is the only one determining the rules on this chain, they have the ability to change these governance rules as they see fit. Sayings of "but miners decide" has its skeptics as any miners who do not want to pay will have their blocks rejected, and will be forced to mine on another chain.
The non-IFP BCH chain will not have this so-called “miner tax” in it, and developer funding will continue to have to come from outside the protocol, from people who pay for what they want, as it always has been since bitcoin was created in 2009. Currently, over 50% of the Bitcoin Cash blocks are signalling their support for Bitcoin Cash Node, the non-IFP chain, against 0% that expressed support for ABC's IFP.
With such a drastic change the protocol, Bitcoin ABC will be forking off of Bitcoin Cash come November. As of the recording of this video, there is only one futures market open at Coinflex, and it has the ABC chain valued at 10% of Bitcoin Cash. I would expect more markets to open soon, and don't expect much from the ABC chain, as a large majority of the Bitcoin Cash ecosystem has already shown their disdain for ABC’s actions.
After November, I’m confident Bitcoin Cash will continue its quest of Peer to Peer Cash for the world, as it sheds yet another team who wants to use the protocol for their own profit.
I just saw this on youtube that's why I'm here 😅