My take on the BCH 12.5% dev funding

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Avatar for FUBAR-BDHR
4 years ago

Here's my take on the proposed 12.5% mining tax to fund developers. Yes I'm going to call it a tax since if it's implemented without changes it will be mandatory.

First a bit of history. Originally miners and developers were one in the same. Satoshi mined and wrote the original code. As bitcoin wasn't worth anything at the time there was no real funding. Other early developers also mined. I'm sure not all of them but lets face it mining was not something anyone could do. It took technical knowledge. Even when I started mining in early 2014 you needed decent knowledge of your machine and OS in order to mine. With mining pools coming into the picture needing to compile your own code and run your own node was no longer necessary. So somewhere along the line the devs are miners aspect changed. Mining pools still ran their own custom code and had their own dev teams. Sure they all were using the same code base but they were modifying it for what they needed. Even in 2017 pools weren't signaling their support because it took time for them to update their code bases for whatever they were going to run.

So for most of the history of bitcoin some devs were being paid by mining . Today that really isn't the case. For the majority mining isn't profitable anymore. Even when I mined most of the time it was at a loss. So there really hasn't been developers being paid by mining for bitcoin cash. Devs have always been separate from miners since the fork with few exceptions.

So that brings us to the need to fund devs. I believe there is a need to fund them. Miners funding them only seems logical. But is it really? Here's my take on the pros can cons of the current proposal.

Pros:

  • Developers get funding.

  • Costs are distributed evenly.

Cons

  • It immediately becomes 12.5% less profitable to mine the BCH chain. Profit seeking hash moves to other coins.

  • Chain more vulnerable to attack due to above.

  • Miners with higher costs and thin profit margins are forced to quit mining causing more centralization of mining.

  • Central control of funds means one company controls who gets funded

  • Devs that don't get funded may not upgrade their software.

  • The above could be politically motivated. Devs A & B get funded C, D & E don't. Development becomes more centralized.

  • Chain split. This is a big one. Do we really want to risk another chain split?

  • Companies can be controlled no matter how good the intentions. People can be bought or threatened to gain influence or control fo the funds. A government can outright seize control.

  • Set amount can lead to under or over funding based on price of BCH. $6 million can become $3 million or $60 million.

  • Short term. What about future developers that don't get funding in the 6 month period?


Uncertain about:

  • Who gets the funding?

  • Are amounts set or flexible?

  • What about new developers?

  • What happens to any excess funds?

With that said you can pretty much figure out that I'm against the mining tax. So what do we need?

  • Decentralized distribution. No central entity controlling funding.

  • Multiple funding sources. Sure miners that want to should fund developers but so should other companies whose businesses rely on crypto. Exchanges for instance.

  • Flexible list of developers receiving funding that is updated frequently. This allows for new developers to receive funding while removing funding from any bad actors.

  • Transparency. All decisions and transactions need to be public. Who gets funded, why, how much all need to be out in the open.

  • Documentation on who/what can be funded and how to get that funding.

  • Code. Once agreed upon the code/smart contracts/tokens/ whatever is needed has to exist and be tested.

How to achieve it I don't know but most of all what is needed right now is a plan. Discussion and agreement by the community on that plan needs to take place. Sure there has been discussion but it's been forced discussion. This came out of nowhere. Had the whole thing been discussed and feedback taken before the proposal we would not be in this situation now.

So to summarize: Development funding good. Current proposal terrible.

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4 years ago

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