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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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.
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.
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.