BCH Developer Fund – A lesson in freedom of association.

Are “crime coin” anarchists really advocating for a blockchain tax? How could it be that these self-described voluntaryists would try impose their own tax on other miners? That’s not very voluntary of them. In fact it’s downright coercive. Surely they must be hypocrites of the worst sort!

Lately, some have been arguing that the BCH developer fund proposal is a tax and as such is coercive by it’s nature. But i’d argue that those critiques are either grossly misinformed or just purposefully deceptive.

When most people discuss tax they are referring to a compulsory payment paid to a governing body. Common discussions about tax are referring to the governing body being an actual government not a private organization. But i’ll ignore that for now and assume a private, non-government related, organization could impose a tax on a population.

For an illustration on why the BCH developer fund is not a tax let’s examine two scenarios; in the first scenario we have an entrepreneur looking to start his own lemonade stand business, in the second scenario we have an entrepreneur looking to start his own ASIC mining business. Compare how each of them do business.

The lemonade entrepreneur uses their savings to purchase lemons, a lemon squeezer, a glass pitcher, some ice and paper cups, and a table and chair. They set everything up next to the sidewalk in their front yard which has lots of potential thirsty customers passing by.

The mining entrepreneur does the same except they buy some asics and a server, install some software and consume some electricity. Now they’re off finding blocks and sending blocks they find to other miners.

But what if no one is interested in the products they’re producing? Or what if a few people are interested but most are not? After all they both spent money producing a product, aren’t other people obligated to buy or accept that product?

The lemonade entrepreneur is trying to get passers by to buy their lemonade. The mining entrepreneur is trying to get other miners to accept their blocks. Neither of them have a right to demand those things from other people. A passerby must voluntarily purchase the lemonade and a miner must voluntarily accept a block.

This concept is called freedom of association. You may may recognize that free association differs from actual coercion by applying taxation to the entrepreneurs scenarios.

Say that government now enforces a tax on the lemonade entrepreneur. If any lemonade is sold 10% must be paid to the government. If it’s not paid for every single lemonade sale the government will send some reminder letters, and more letters, and more until eventually the government sends a court summons. If the court summons goes ignored for long enough the government sends men with guns who will throw the lemonade guy in a cage where it’s commonly joked about that he will be ass-raped for the duration of his stay.

Compare this to the developer fund. A cabal of private miners decide to only do business with other miners who contribute to the developer fund. If the new mining entrepreneur finds a block he can still send it to the cabal who might choose to reject it. But if they reject if that miner does find another miner that will accept the block then the cabal will do nothing to stop him. They don’t send nasty letters, they don’t send court summons, they won’t send men with guns. He’s completely free to send his block to any other miner who will accept it without repercussion. They won’t stop him and they surely won’t threaten violence.

In reality governments don’t usually come after lemonade stands for tax because it’s not economical and threatening people like that scares the cattle. If you feel the need to argue that point simply replace the lemonade stand with a budding Sunkist Corporation and re-evaluate. What’s important is to understand the difference between free association and coercion. One is based on individual freedom and the other is based on coercive threats of violence.