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Flipstarter Centralization Rant.

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Avatar for JonathanSilverblood
Written by   221
10 months ago

A viewpoint that recently cought my attention with regards to Flipstarter is that it allegedly represents a centralization concern, and that should the IFP fail to activate we would, going forward, expect to be dependent on a small set of big donors like Marc De Mesel and the SLP foundation.

I would like to formally address this viewpoint by stating that Flipstarter is not, and will not be, the sole mechanic for funding infrastructure development, and that Flipstarter serves a real need that has not been addressed with the IFP.

Let me back up a bit, and remind everyone that the IFP is a proposal to enforce via threat of orphaning otherwise valid blocks if they do not send a specific amount of the coinbase reward to any of the whitelisted parties. Variations of it has been discussed for years, miners have requested it on multiple occasions and as of late, Bitcoin ABC has listened to those miners and implemented it in their node software.

This implementation however, has been the topic of significant controversy and while I won't go into all the details, I would like to focus on one specific property of the implementation in more depth: The whitelist of candidate recipients.

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Why a whitelist?

As it turns out, the initial proposal was going to go through a centralized party and would disburse funds to projects. This was met with backlash and in order to allow miners to directly send funds to the projects they care about, a whitelist was suggested. This is an improvement to the previous iteration but someone has to determine the scope and choose what entity gets whitelisted, and what entity does not.

Instead of discussing the topic for a handful of years more, Bitcoin ABC instead took action and implemented a whitelist according to some self-selected criteria and released an update to their node software.

The content of this whitelist is what I will be focusing on in relation to the centralization concern.

Is flipstarter any better?

Currently, two out of the five flipstarter campaigns have fullfilled and the BCHN and Verde campaigns now have the funding they requested in order to complete the commitment they took in their campaign proposals.

While they are neither technically nor morally bound to their donors in any way, they undoubtedly are grateful and thankful for the donations and should they need to run further campaigns later on are more likely than before to want to cater to the known sources of donations. That is one of the drawbacks of having known donors, and a drawback they will now have to deal with.

But what was the alternative? After all, neither BCHN nor Verde was whitelisted in the IFP implementation by Bitcoin ABC, and there was no guarantees or even expectations for them to be funded by it.

Even if they were, wouldn't they have had the same relation to the miners who would have chosen to fund them through the IFP?

Consider for a moment that the miners could've funded both BCHN and Verde through the IFP, and that they would do so without disclosing their identities, this would still mean that the funded node developers would cater to the "miner need" - an important aspect of the Bitcoin Cash ecosystem, for sure - but would necessarily be better than catering to businesses, the token ecosystem or the speculators? Maybe. Maybe not.

So.. everything's bad?

No, everything's connected. When we talk about decentralization, we should be aware of the weakest link, as that is the limiting factor for decentralization.

If our only source of funding for the ecosystem is Flipstarter, then we're in a really bad position. If it's only through the IFP, we're also in a bad position. If it's only through a blockstream-style corporation, same thing.

Thankfully, that's not where we are today, and the centralization concerns are unfounded.

Bitcoin ABC has already raised 6000+ BCH, Bitcoin Unlimited still have plenty of funding as a result of previous fundraising, price appreciations and reasonable management of their funds. Bitcoin Cash Node now has 1000+ BCH from their Flipstarter and general donations, Bitcoin Verde has 240+ BCH from their Flipstarter and established working business relations.

We should be embracing this diversity, as that is what makes us resilient.

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Avatar for JonathanSilverblood
Written by   221
10 months ago
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While they are neither technically nor morally bound to their donors in any way

About the morally part, I think we ARE morally bound to spend the donated funds in the way that our project proposed.

If circumstances were to arise that would make spending the money on a previously proposed task futile, then we would have a moral obligation to consult with the ecosystem on how to allot those funds. Quite what a good process is to do that, is still up for debate, but I think we could do some poll where signed votes from previous donors would count for more than unsigned ones from random participants.

Because I consider if you already provably donated money to BCHN, then you should have some stake in the project's decisions. That does not mean someone would be able to buy themselves a vote to do something destructive, but that we should listen to and respect the wishes of those who contribute to our project.

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10 months ago

if you already provably donated money to BCHN, then you should have some stake in the project's decisions

absolutely! thats why the donation campaigns should distribute project's tokens to the donors

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9 months ago

You're right, it could perhaps be written more clearly.

My intent was

While they are neither technically nor morally bound to their donors in any way [other than as stated in their campaigns]

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10 months ago

Flipstarter is a game changer and will provide tons of opportunities for investors. Good news flow and spreading the word are key.

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10 months ago

I agree with your message of diversity bringing resilience.

However, you imply that Flipstarter has an anonymity disadvantage compared to other funding methods. I see no basis for this claim. The difference of Flipstarter compared to regular donations is the assurance contract, not donor anonymity. Even with the IFP, "donors" (i.e. miners) can be both named and anonymous. It is also publicly known that Marc De Mesel was a large donor of Bitcoin ABC in the previous fundraiser on bitcoincash.org/bitcoin.com. Overall, I see no support for the claim that with other fundraising methods do not have a dependency on a few big donors - Flipstarter just makes it more transparent, which is good.

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10 months ago

It might be subtly in the writing, but it's not actaully I that imply that. It was brought to my attention that others might see it that way, so I addressed the implications of it.

Specifically, this reddit thread got me all worked up with the (intentionally or not) misleading allegations: https://www.reddit.com/r/Bitcoincash/comments/g9ia5z/should_we_call_it_a_good_new_centralization/

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10 months ago

Perfect!

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10 months ago

Good

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10 months ago

Good work

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10 months ago

Good work. Flipstater will add value by changing status

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10 months ago

Flipstarter will definitely add value by changing the status quo. More investors will be attracted if the promoters get it well in the long run.

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10 months ago