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Amaury Séchet is Forking Bitcoin ABC away from Bitcoin Cash

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2 months ago (Last updated: 1 month ago)

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A situation is developing in Bitcoin Cash and if you care about P2P electronic cash, it is a very good time for you to become informed.

Amaury Announces 8% of the Block Reward to be Syphoned to Him

This immediate situation was sparked by Amaury Séchet’s announcement on 6 Aug 2020 that his Bitcoin ABC full node software for Bitcoin Cash would be enabling a new coinbase rule.

This coinbase rule, as things stand at the time of publication, diverts 8% of the coinbase payment — the block reward that miners earn for finding a block plus the transaction fees collected from transactions included in that block — to an address that is undoubtedly under the direct control of Amaury Séchet.

This kind of proposal is commonly known as an infrastructure funding plan, or IFP, in Bitcoin Cash circles.

Further, Amaury has stated he will not engage in a debate about this. This is the way his node software, called Bitcoin ABC, is going, and no one has a right to stop him, nor can they. No one can tell Amaury what to put in his software or remove from his software, he says.

Most of the Rest of the BCH Ecosystem Takes a Position

Almost all of the Bitcoin Cash ecosystem has declared their firm opposition to Amaury’s plans. This includes a very large percentage of the people building on Bitcoin Cash and as much as 70% of hashrate.

  • Bitcoin.com: Producers of the main BCH wallet as well as a significant amount of infrastructure, including the P2P exchange local.bitcoin.com. Founded by Roger Ver.

  • The SLP Foundation: The creators and maintainers of SLP token infrastructure on BCH, which is the only adopted token infrastructure for Bitcoin Cash. Users of SLP tokens include USDH, USDT, FLEX, SPICE and other tokens.

  • Read.cash: The creators and maintainers of one of the most successful platforms using BCH today for onboarding new BCH users.

  • Electron Cash (wallet)

  • The BCHD full node project

  • Member.cash

  • The Mainnet.cash project.

  • Miners accounting for 60-70% of Bitcoin Cash blocks over the last 7 days are signaling for the Bitcoin Cash Node full node software (which essentially is the same as Bitcoin ABC but without the 8% coinbase rule) or at least known to be against the 8% coinbase rule, including:

    • BinancePool

    • Huobi

    • Jiang Zhuoer’s BTC.TOP (Jiang Zhuoer was the official proposer of the first version of this coinbase rule)

    • OKEx Pool

    • Bitcoin.com mining pool

    • Smaller miners signaling for BCHN include P2Pool, Hashpipe and Easy2Mine (Wayi.cn).

  • Bitcoin Cash Node full node developers

  • Bitcoin Unlimited as a project and some of its members individually

  • The Knuth full node developer(s)

  • The Flowee full node developer

  • The Bitcoin Verde full node project

  • multiple independent developers

  • Zapit (wallet).

  • LazyFox.io, which is due to relaunch soon

  • General Protocols, including its BCH price oracle and smart contract redemption services

  • Other infrastructure such as

Some are Still in the Middle

A few have taken a middle-of-the-road position, including the following.

  • Haipo Yang, ViaBTC & CoinEX. Haipo will offer the miners who use his ViaBTC pool the option of whether to run Bitcoin ABC or Bitcoin Cash Node. ViaBTC has consistently been among the top BCH miners and mined the first BCH block in Aug 2017.

  • Hayden Otto of BitcoinBCH.com. Hayden has said he will stick with whatever chain retains the Bitcoin Cash branding. Hayden is a local adoption leader in Australia and has produced some outstanding BCH marketing videos.

  • Chris Troutner of FullStack.cash: Chris says he will support both chains if there is a split.

A Few Support Amaury

Amaury retains a little support.

  • Bitcoin ABC employees: 3 software developers (including Antony Zegers and Jason Cox), 2 support staff and Amaury.

  • Shammah Chancellor, former ABC developer and developer of a new wallet called Stamp.

  • Tobias Ruck, developer of an NFC card BCH payments system called be.cash. This although the be.cash project depends on the BCHD full node software and the USDH stablecoin. USDH depends on SLP token infrastructure. Whether BCHD will exist on Amaury’s new chain and whether there will be SLP tokens or another token protocol, or if USDH will adopt it, also remain to be seen. 

  • Vin Armani, CTO of CoinText.

  • Tendo Pein, creator of the Spedn smart contract language

  • Mike Malley, Founder of CoinSpice

  • Tyler Smith - creator of the Snowglobe protocol and engineer at Ava Labs (AVAX)

  • Joannes Vermorel

However, Amaury, as the situation stands at the time of publication, would be forced to proceed without a BCH wallet and would be forced to rely on multi-coin wallets such as Edge, if Edge decides to list Amaury’s coin. Or he would need to fork and maintain an existing wallet project, as well as create the infrastructure to support it.

Further, it seems likely he would lose Purse, BitPay and OpenBazaar, as well as a lot more merchant adoption.

Amaury can certainly fork all of the software he is losing, since it is all available under FOSS (free and open source) licenses. But he can't do devops on it all himself.

Amaury may or may not have ample funds to hire and pay engineers or contractors to help him do all of this, but that does not happen overnight. If he estimates he will lose the game he has foisted upon us all, then he would be well-served to scramble now to get his infrastructure up so he has a viable coin on 15 Nov 2020, the day he might fork off from Bitcoin Cash.

Some Have Yet to Speak

  • Jihan Wu / Bitmain / Antpool / BTC.com is the most important voice that we have yet to hear from among the miners.

  • USDH: a stablecoin SLP token.

  • USDT: a stablecoin SLP token.

  • GoCrypto will almost certainly stick with Bitcoin.com, and Bitcoin.com is against the 8% coinbase rule.

  • Most adoption efforts will likely stick with Bitcoin.com as they depend on the Bitcoin.com wallet and cash register app, among other things.

What is this Really About?

What Bitcoin ABC Says

The Bitcoin ABC talking points include the following.

  1. BCH protocol development is heavily underfunded.

  2. No one wants to fund Bitcoin ABC enough to do more than maintenance.

  3. Bitcoin ABC has been working hard for 3 years and deserves funding.

  4. Almost all of the other protocol developers working on Bitcoin Cash are incompetent in one way or another.

  5. People in BCH constantly criticize Amaury, frequently in extreme, incorrect or outright rude ways.

  6. The 8% coinbase rule will most perfectly align the incentives of Bitcoin ABC with those of the ecosystem as a whole.

  7. If Bitcoin ABC does not do the "right thing" after implementing the 8% coinbase rule (which at current prices and assuming Amaury was successful in his takeover attempt would generate USD$7.7 million in annual income for Bitcoin ABC), then another team could try to replace them.

Here is my point-for-point analysis.

  1. Protocol development funding is indeed meager compared to Ethereum or AVAX or even Bitcoin Core BTC. But it is not unfunded. There is significant funding. For example, Bitcoin ABC has at least USD$1.8 million in funding for the period of 1 May 2020 thru 30 Apr 2021, and still has 8 months to raise another $1.5 million to reach its total desired amount. Other protocol development teams raised, collectively, at least 2039 BCH (USD$600,000+) earlier in 2020 via flipstarters in addition to private donations that I am not counting. It is possible the other teams matched or exceeded Amaury's funding and that by collaborating there would be enough funds to execute the Bitcoin Cash roadmap.

  2. Bitcoin ABC maintains that their hands are tied when it comes to developing new features for Bitcoin Cash, such as raising the limit on the number of chained transactions, because they must maintain the existing software. They have done enormous code cleanup, fixes and backporting over the last 3 years. However, while this is very nice, was it really necessary and/or the best use of resources to polish the existing code? BCH is not a well-funded Fortune 500 corporation that has the resources with which to cross every t and dot every i. I am not qualified to judge technical matters fully, but is it possible a choice was consciously made to focus on code cleanup as a way to force the issue on more funding for Bitcoin ABC?

  3. It is true that Bitcoin ABC has been working hard and maybe they do deserve funding, but at what cost? What is the tradeoff? That we blow up Bitcoin Cash and turn it into a corporate coin? That is self-defeating.

  4. I don’t accept that Amaury and his small team are the only competent protocol developers in the ecosystem. The BCHN contributors put together a full node in record time and even added a mining efficiency improvement to their software. Sure, BCHN forked the ABC codebase but some of them have also contributed important code to the ABC codebase. It simply strains credulity and is too overtly self-serving for one guy to claim that (almost) everyone but him is incompetent.

  5. There is a contingent of people present in the BCH ecosystem that can be vile, rude, can overreact and otherwise be extremely unpleasant to deal with. So what? That is humanity. We work with what we have. It is not a good reason for blowing up Bitcoin Cash.

  6. The incentives on the 8% coinbase rule may align nicely but if it means splitting the coin and losing the grassroots, so what? The cost of that perfect alignment is simply too high. That said, said, the next point addresses the fact that this alignment is asymmetrical. It puts all the power in one person's hands, as things stand today.

  7. Once Amaury has millions of dollars in pocket, at least two serious problems exist. First a line is crossed that can not be uncrossed. Amaury will have demonstrated that, yes, on-chain payments can be intercepted and a portion of them can be extracted for third parties. How long until governments demand we do the same for all payments? Second, who will stop one man who has millions of dollars in his pocket from buying, or even faking, support? What would stop him from buying up hash and running it to support himself? This is like giving one guy in the room a gun and saying if he misuses it you can take steps to stop him. That’s careless and self-serving. None of us are that stupid.

What Others Say

There is a large variety of viewpoints on Amaury’s 8% coinbase rule announcement across the BCH ecosystem. Some embrace it. Some are on the fence. Some just want to see where the idea evolves to next.

But most projects and people who are actively building in Bitcoin Cash have declared their absolute opposition to it and their refusal to be a part of it, as you can see above.

  1. Opposition to the Method. Some are opposed to the way it is being pushed on the BCH space. It was announced out of the blue, months after 3 previous versions of the same thing had been attempted and had failed with literally 0% support of the miners.

  2. Opposition to Amaury. Some are opposed to Amaury on a personal basis and consider him a bad actor who is holding back Bitcoin Cash. They do not wish to see him have more power, much less if it is drawn from the block reward.

  3. Concern about Crossing Lines. Some oppose the ideas of crossing what they consider a line of interfering with the miner’s incentive to provide proof of work to secure the BCH blockchain. They consider the 8% coinbase rule would make BCH no longer sound money, no longer a contender to be the real Bitcoin, would reduce chain security too much and/or would open the door to future government demands to interfere with the free workings of the BCH blockchain.

  4. Rank Corruption. Some would consider that a cryptocurrency where any portion of the block reward is being syphoned into one person’s pocket, or even any legal entity’s pocket, such as a foundation, to be one of the most extreme forms of corruption possible, particularly in a system that aims to be free of middle-man corruption.

  5. Centralizing Force: Over time, no matter whether the coinbase rule (IFP) pays to one person or an all-star-team foundation, this central point will grow stronger. As its power grows, its ability to set network rules will also grow. And the ability for its power to be checked will relatively diminish, leaving us with an increasingly centralized ecosystem.

If one man can syphon 8% of the block reward away from the incentive system we have all bought into for a decade, would the resulting thing even be a cryptocurrency anymore? Could it claim to be decentralized? These, among others, are questions that BCH builders and users are asking, and that Amaury refuses to engage with in public.

This Could Have Gone Another Way

Had a consensus-building process been undertaken by Amaury Séchet first, had this been done professionally, I would be open to supporting this 8% coinbase rule. I know I am not the only one with this perspective. But Amaury is doing this backwards, first shocking the ecosystem out of nowhere with a dramatic announcement that almost everyone is opposed to.

Amaury’s clumsy approach is almost certainly calculated to elicit strong reactions from the ecosystem such that either people capitulate from fear/helplessness or they leave in disgust. And he can always compromise later to get what he was willing to accept in the first place.

This approach may look good when calculated on paper, game-theory-style, but in the real world it hardens positions and alienates people — which is what we are seeing right now.

The Worst-Case Scenario for Amaury is Probably Acceptable to Him

Some doubt Amaury’s sincerity or his will to fight this to the end. But the worst-case scenario for Amaury is that he gets everything he wants.

  • He forks off to his own coin.

  • He is free of people he dislikes.

  • He has a free hand to do as he pleases.

  • His coin is worth $80.

  • Still in the top 20 on CoinMarketCap.com

  • He increases his coinbase rule to 25% (or more).

  • His annual income? $6,570,000 (which is double what he said he needed in the May 2020 Bitcoin ABC business plan).

For bonus points, Amaury spent 3 months (most of which lays ahead of us) wreaking havoc with Bitcoin Cash, causing people to leave and the coin to lose momentum — and he successfully stuck his finger in the eye of everyone he dislikes!

Vulture the Ecosystem in 80 Days

Now Amaury is dangling the carrot of a share of any funds generated from his 8% coinbase rule. This will successfully pull some people away from Bitcoin Cash.

It will not be attractive to those of us who are ethical actors, who see what Amaury is doing and do not care to profit from Amaury’s selfish, callous and clumsy attempt to destroy Bitcoin Cash and vulture away the pieces.

His actions are tantamount to extortion and must be repudiated by ethical actors.

Amaury is not a team player. His collaborators will not enjoy free speech. Their projects will be at risk of a funding cut-off any time orders are not taken from Amaury.

What Could Happen on Nov 15?

A lot of things could happen and it is too early to offer a clear picture since things are likely to change before then. Given ABC’s rolling checkpoints and the fact that Amaury’s 8% coinbase rule change is a soft fork, it complicates matters.

Bitcoin ABC could gain majority hashrate and there would be no immediate split.

Nodes that do not include Amaury’s 8% coinbase rule, such as Bitcoin Cash Node, BCHD and others, could gain majority hash rate, and Bitcoin ABC would be forked off. But, due to the rolling checkpoints, this process is fraught with hazard.

Amaury could still back down or some compromise could be found, such as the formation of a foundation. This would avoid the specter of a contentious split, or even a BSV-like hash war. 

A compromise, however, seems unlikely at this juncture because Amaury has almost no one on his side and those opposing his plans and tactics are extremely united and strong. What Amaury has going for him is principally inertia, and little else. But that still counts for something.

Next Steps

  • Why shouldn't Amaury fork now? Amaury is the one changing the BCH protocol in an attempt to syphon 8% of miner block rewards into his hands. Amaury is instigating the fork here. If his 8% coinbase rule is so great, why not implement it now, on his own coin?

  • Those opposed to the 8% coinbase rule would do well to calmly communicate to the exchanges they patronize what is happening so they understand that one of many full node softwares in Bitcoin Cash is trying to change the protocol against the wishes of almost everyone else. The Bitcoin Cash protocol should continue to be known by the BCH ticker. What Amaury names his new coin is up to him.

  • ViaBTC, AntPool, BTC.com and other mining pools that have not signaled would be well-served to either talk Amaury down from his ledge in private and/or give their miners a choice between mining Bitcoin Cash and mining Amaury's coin, with its 8% reduction in miner income.

  • We must remain vigilant because Amaury is far from done. He has 80 days to wreak havoc with Bitcoin Cash at little cost to himself.

  • Don’t fall into the trap of seeing this as BCHN vs Bitcoin ABC. This is Amaury Séchet launching a calculated attack on Bitcoin Cash.

  • If you find this document to be a useful brief on the situation, please share it. People need to be informed. If you don't, please let me know why so I can improve my communications going forward. It is important that BCH users receive quality information around this situation so we can calm their fears and retain them, and ideally in their native languages. I may be producing more content around this topic over the next few weeks.

  • Let’s try to keep building. I welcome feedback on the ideas presented in my manifestos.

Conclusion

The bottom line is that Amaury Séchet is forking Bitcoin ABC from Bitcoin Cash. This is an accurate statement because his 8% coinbase rule changes the Bitcoin Cash protocol while almost everyone else who is building on Bitcoin Cash, including 70%+ of hashrate, wants the protocol to remain the same, i.e., to not syphon 8% of the coinbase to one man.

Further, almost no one supports Amaury. No miners are signaling for him.

This is Amaury vs Bitcoin Cash, and the end result, as things stand today, is that Amaury forks Bitcoin ABC off into its own coin.

Further Reading


NB: If I have gotten any facts wrong, I humbly request correction. If you want to be listed here along with your position, kindly DM georgedonnelly on Telegram or email george@panmoni.com. Thank you.

Tips totaling $100 or more will be spent to translate this article into Chinese first, then other languages as resources permit. When tipping, feel free to suggest what languages you want translated first.

Fork PNG credit.

This work is licensed under a Creative Commons Attribution 4.0 International License. You are free to republish it, share it, translate it. Just be sure to attribute authorship to "George Donnelly".


Updates

  • German translation added

  • Chinese translation ordered

  • Japanese and Bengali translations ordered

  • "What Others Say" point 5 "Centralizing Force" added.

  • "Further Reading" section added.

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