TL;DR: Influential mining pool operator BTC.TOP and its founder, Jiang Zhuoer, announced, in response to Bitcoin Cash infrastructure concerns, it, Antpool, ViaBTC, Bitcoin.com are launching a dedicated fund. Designed to last six months, and to begin in conjunction with the scheduled BCH May 15th, 2020 upgrade, the initiative hopes to raise more than $6,000,000 to distribute among major implementations. Funds will be administered through a Hong Kong corporation.
Bitcoin Cash Mining Pools to Implement Infrastructure Funding Plan
In addition to Jiang Zhuoer, Jihan Wu of Antpool, BTC.com; Haipo Yang of ViaBTC, and Roger Ver of Bitcoin.com are also claimed to be supportive of the funding proposal. They “intend to direct 12.5% of BCH coinbase rewards,” the plan explained, “to a fund that will support Bitcoin Cash infrastructure.This funding will last for 6 months, and it will provide significant and much needed support to the Bitcoin Cash ecosystem.”
Describing BCH infrastructure funding as having been perhaps “overlooked” or “underprioritized,” the announcement acknowledged how “long-term effects of neglect to infrastructure have the potential to be damaging. Or, even worse: the project can be captured by well-funded saboteurs. However, we can avoid these problems by providing an adequate level of stable funding, allowing Bitcoin Cash to thrive and succeed.”
Further detailing the proposed funding metrics are at first “counterintuitive,” mining pool operators noted “it would appear that BCH miners simply give up 12.5% of their rewards and would then lose 12.5% of their hash as well. However, after difficulty adjusts on BTC, it is a different story.”
Continuing with a BTC hash example, reward percentages work out so that “BTC is 97% hash and BCH 3%. If BCH gives up 12.5% of its reward, that 3% goes to about 2.6%, and BTC would go to 97.4%,” the announcement stressed. “0.375% of the total SHA-256 rewards are being pulled out of the entire system, but this cost will be split between BTC and BCH in the same ratio as the hash (97:3). The BCH hashrate will be diminished by 12.5%, but BTC mining will bear 97% of the cost of the diminished profitability, because there will be more hash competing for the same BTC rewards.”
More than $6,000,000 in 6 Months
Through some basic, not-too-far-fetched assumptions and calculations, the mining pool operators believe at “a current price of $300 per BCH, then donating 12.5% of the coinbase for a period of 180 days would total $6,075,000 (144 x 6.25 x 300 x 180 x 0.125),” Zhuoer assured.
The funds will be administered through a Hong Kong-based corporation, as yet unannounced, to “legally accept and disperse funds. The funds would be used to pay for development contributions to full node implementations as well as other critical infrastructure.”
Zhuoer was also sure to point out, “There is no ‘masternode’ voting or any other voting. This is a decision by miners to fund development directly. The initiative shall last 6 months (May 15th 2020 — November 15th 2020). The initiative is under the direction and control of the miners, who can at any time choose not to continue. This is not a protocol change. Instead this is a decision by miners on how to spend their coinbase rewards and which blocks should be built on.”
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