Even though the source of this event is the BCH community, its outcome will also affect all SHA-256-mined coins like Bitcoin BTC and Bitcoin SV. Please read this carefully even if you dislike BCH because it will affect all three communities.
Bitcoin ABC, the node software historically used by many BCH miners, has decided to implement a controversial consensus rule that forces any BCH block to redirect 8% of the miner's reward to Bitcoin ABC. Blocks that do not redirect this fee will be orphaned by Bitcoin ABC nodes.
The collected funds are intended to fund Bitcoin ABC development and to provide seed funding BCH-related companies.
All other BCH node implementations as well as the vast majority of the BCH community is strongly against this unilateral, self-beneficial move. A team of independent developers has since copied Bitcoin ABC, removed the controversial fee and released the result under the name BCHN.
There will now be a battle on which side comes out as the majority on November 15th.
The cost for ABC's funding would not be borne by BCH miners only. Due to the difficulty adjustment algorithm, every SHA-256 mined coin like BTC and BSV would pay.
On average, the SHA-256 hashpower generates a block of BTC, BSV and BCH every 10 minutes, which will give 6.25 of each coin to the SHA-256 miners. At current rates, this amounts to 6.25 x ($10673 + $163 + $227) = $69144.
If Bitcoin ABC should win, 8% of the BCH reward would be directed to them:
6.25 x $227 x 0.08 = $113.5 every 10 minutes, $6M per year.
The same amount of hash power would now generate $113.5 less revenue every 10 minutes.
Yes, that is "only" a loss of <0.2% of SHA-256 mining profitability today. Maybe that loss would be acceptable, especially from the perspective of the Bitcoin ABC team that would benefit from it. But the issue is that it sets a really dangerous precedent.
It touches a core coin distribution mechanism that all Bitcoin derivatives share: the coin reward belongs to the miners.
What if Bitcoin Core would suddenly introduce a similar rule for BTC? What if Bitcoin SV does? Who stops Bitcoin ABC from raising their fee to 20% later down the road?
Also, if the value ratio between BTC and BCH changes, this 0.2% could quickly grow.
So the question is: will BTC, BSV and BCH miners support development teams redirecting a portion of the block reward to themselves?
I know that there is some animosity between the three mentioned cryptocurrencies. But I am hoping we can put them aside to fight this money grab.
Make all miners aware of what is going on by linking them to this article. Translate it to other languages and share it, you hereby have my permission.
If you are a miner:
Replace Bitcoin ABC with BCHN before November 15th
Talk to other SHA-256 miners, they will all be affected
Publicly state that you will put your hashpower against this move by Bitcoin ABC
Redirect hash power towards BCHN on November 15th to make your opinion heard
Follow the hash signaling on https://cash.coin.dance/blocks (currently 0% for Bitcoin ABC, 55% for BCHN, 45% undecided/neutral?)
For brevity, I left out a lot of the details surrounding this controversy.
Here is link to a collection of relevant articles:
And here are my previous articles: