Bitcoin Cash is proposing the introduction of a 12.5 percent tax on mined bitcoin cash coins for six months. They believe these changes are needed to fund the foundation behind the cryptocurrency. Anybody who is not ‘donating’, will have their blocks orphaned and therefore rendered useless. The proposal was published by Jiang Zhuoer, the CEO of mining pool BTC.TOP.
BTC.TOP will be working together with the mining pools Antpool, BTC.com, ViaBTC and Bitcoin.com. Together these pools control control the majority of the Bitcoin Cash hash rate, which means together they control to the direction of the cryptocurrency. The boss of the Bitcoin.com mining pool is Roger Vet, who’s been criticized many times before.
The group wants to acquire 6 million dollars in funding throughout the six month period, calculated based on the current $300 value of BCH. This will start on May 15th 2020 and end on November 15th 2020.
Currently the development of Bitcoin Cash is being funded by corporate donations. According to Zhuoer this comes with two major drawbacks:
- Corporate donors have influence on developers.
- Only a few companies commit to providing money, while other members are ‘free-riders’.
The CEO of the Chinese mining pool believes that a tax on miners is a better mechanism that benefits the development of Bitcoin Cash. “This debate has been long enough, instead of continuing this pointless debate, why not give it a try”, Zhuoer said about the miner taxation.
The group of mining pools is talking about a donation. But it’s not. It’s a tax forced upon the 49 percent by those in control of the 51 percent. Because the group has the majority hash rate, they can decide on the future of Bitcoin Cash. As a result they can decide that miners who don’t subsidize the foundation will have their blocks orphaned. Technically this would be called a 51% Attack, as the foundation is using its computer power to create a majority vote and influence the blockchain.
“To ensure participation and include subsidization from the whole pool of SHA-256 mining, miners will orphan BCH blocks that do not follow the plan. This is needed to avoid a tragedy of the commons.”Bitcoin Cash tax proposal
There’s already a Hong Kong corporation in place to legally accept and disperse the funds. The funds would be used to pay for the development of Bitcoin Cash and other critical infrastructures. The name of the corporation is unknown, but it might as well be the Bitcoin Cash Tax Office, or BCHTO.
Also published on Medium.