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Let's make things clear about the fund proposal

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Avatar for lubokkanev
Written by   11
4 months ago
Topics: Bitcoin Cash

The money isn't coming from miners

Not BCH miners, not BTC miners, not Calvin.

The money comes from the block reward thus from inflating the coins of the BCH holders. This inflation is usually used to secure the chain and now users will exchange some of the security for money for development. Miners mine what's profitable, no change for them.

This exchange is probably a good idea

We already have much less hash than BTC. Going from 3% to 2.5% probably won't be that bad. Moving that money for development is probably better.

Having the money sent to some miner-controlled company is bad

There's no transparency. The company can be seized. The funds can be stoled by the miners (unlikely I think). It's way better to make some smart contracts.

The way this security for money exchange is executed is incredibly dangerous

Fiat is bad because it lets central banks print as much money as they want, thus devaluating people's savings. Bitcoin was born to fix this problem.

Satoshi designed the system such that a colluding majority of miners have the power to change the rules. This could be a problem because all miners want more money so they could collude and inflate the coin. It's not a big concern, because people will never support this, that's why they're in crypto after all.

But here we are, thinking about allowing miners to print coins that go to their fund. You might say "they are not printing more coins, they are just redirecting them" but this is just a small detail that doesn't change things much. This fund might get super important and continue forever. Then security might get lacking and guess what - "let's increase the block reward but keep the fund". It's a slippery slope that leads back to uncontrolled inflation.

Conclusion

It's generally a good idea to put money for development. It's a clever idea to exchange security for that fund. It's a bad idea to allow miners to enforce inflation for their private fund.

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Avatar for lubokkanev
Written by   11
4 months ago
Topics: Bitcoin Cash
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Comments

"But here we are, thinking about allowing miners to print coins that go to their fund."

This is inaccurate.

The block reward remains exactly the same under the proposal, the only difference is that 12.5% of it goes to a different address.

Repeating and spelling it out, very slowly: It is not additional 12.5% over the 12.5 BCH block reward, it is 12.5% of the 12.5 BCH reward. The sum of coins that go towards infrastructure development and remaining coinbase reward will always add up to 12.5 BCH. Or, after the halving, to 6.25 BCH.

$ 0.10
4 months ago

It's someone else' reward. In the grand scheme of things I'd rate that as worse than printing additional coins.

$ 0.00
4 months ago

Finally, someone from the elite that understands.

Where can I read more of you thoughts on all of this.

$ 0.00
4 months ago

Yeah, that was pretty clear. Doesn't mean it'll remain that way though. Maybe they'll take all of the mining reward next. Create even more coins after that.

It's a slippery slope not worth going towards.

$ 0.00
4 months ago

You might want to edit your article then, because that's not what it says.

$ 0.00
4 months ago

That's in the article already.

$ 0.00
4 months ago

Agree, needs an edit that "this may happen in the future", Author gives an impression this model in its current form causes inflation fl So his conclusion is correct that its clever and funds are needed for Dev, but should change to see it would be bad if miners try to cause inflation in the future

$ 0.00
4 months ago

All of this is mentioned in the vey next sentence.

$ 0.00
4 months ago

I'm changing my mind on this whole issue. I used to think having part of block reward / inflation go to development is good way to get sustainable funding that avoids the tragedy of the commons problem that voluntary donations business model has, where only a few donate and the rest free rides, hence why I liked Dash and Zcash.

But, piece of inflation paying for everything also causes voluntary donations in money, development and marketing, to collapse as now everybody expects to get payed. It also centralizes development and marketing as now everybody becomes dependent on this one funding stream. It also causes politics to emerge as now you have to sell yourself well in order to get funding from that stream. Typically such foundation with guaranteed income stream, ends up being overtaken by parasites who pay themselves well and care little for the mission as true entrepreneurs that care are not attracted to such employee positions.

Despite the loud complaining by Amaury Sechet about lack of funding for development, the amount of development done on BCH is actually very impressive. You currently have several independent clients/implementations, large and small ones, last 6 months we got CashFusion, SLP tokens, and BCH has by far highest amount of idealist promoting and spending it. True, financial donations are lacking but have not been cultivated yet also.

There was only 1 fundraiser to my knowledge where one could donate easily to different teams, that was actually quite successful raising an impressive 800 BCH or so in 2 months, however this success was not recognized as Amaury was causing trouble yet again complaining some parties should not have been on the list, KYC/AML regulations were not complied to (yet he did not follow up when I proposed to sign a paper as large donator), and didn't even thank the community for the 400 BCH his team got, nor did his partner David Allan from the Development Foundation who received 200 BCH or so.

The biggest problem for me with this 'proposal' is that some miners force all other miners, as well as all coinholders, to pay for something they deem good, via inflation. This is a slippery slope that will likely lead to many other costs they deem necessary, by further reducing security or when no more possible, increasing inflation, creating a bigger and bigger group of parasites leeching from the system. This will chase away the goodwill and enthusiasm so many have for BCH and will likely make it irrelevant over time.

I think best is to reject this proposal in full and start to embrace the donation business model more by launching not a temporary but permanent fundraise where builders (devs, marketeers, spokespeople) can make their case why they would like more donations, and donators can build a reputation based on their generosity.

$ 0.10
4 months ago

Nicely put!

$ 0.00
4 months ago

I think a multi-sig wallets with miners who mined the blocks with control of the fund or a smart contract would be better than a private company?

$ 0.10
4 months ago

Totally!

$ 0.00
4 months ago

@MarkDeMesel Thanks dude!

$ 0.00
4 months ago

welcome, great article going to the foundations of inflation

$ 0.00
4 months ago
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