All You Need to Know About Bitcoin Cash’s ‘Btax’
In this article we explain why the new Bitcoin Cash client has caused quite an uproar among the BCH community and take a quick look at the ongoings of an actual BCH hard fork product that has managed to come into a life of its own.
BCH is dead, BTAX is born https://t.co/LUsHfGQ904
— cryptorebel_SV (@cryptorebel_SV) February 15, 2020
What is Btax? The Low-Down
Btax is the name given by Twitter to a new Bitcoin Cash protocol released by Bitcoin ABC which, among other changes, would allocate 5% of each miner (block) reward to one (or any) of several different development projects designed to boost the Bitcoin Cash infrastructure. There are 2 separate implementations of the Bitcoin Cash protocol, one being Bitcoin ABC and the other named Bitcoin Unlimited (BU). Currently, Bitcoin ABC nodes comprise about 60% of the total node count, making them the majority faction.
The new version of the Bitcoin ABC client is release 0.21.0, also known as BIP 9, and would activate the 5% deduction from each block (as well as 5% collected in fees for each block) the moment 66% of all nodes are running the client (starting May 15th). After this point, blocks without the designated taxation would be ignored from the network. The four projects whose BCH addresses will be hard coded as tax recipients were selected based on the following criteria:
- They must share common infrastructure and be projects of which different products can be built on top.
- They must provide a “public good,” as defined as adding to the welfare of the Bitcoin Cash ecosystem.
- They must use open source software licenses that are compatible with other projects in the Bitcoin Cash ecosystem.
- They are willing to prioritize projects that are in need of money.
The four addresses hard coded into the new client include those representing
- Bitcoin ABC: developers of the protocol committed to enhancing the welfare of Bitcoin Cash.
- Electron Cash: wallet software dedicated to BCH (similar to Bitcoin’s Electrum wallet).
- BCHD: an alternative Bitcoin Cash full node implementation written in Go (golang).
- General Fund: an unknown entity that is thought to be a Hong Kong-based company.
"[The money will be approved for] a General Fund, Bitcoin ABC, Electron Cash, and BCHD…"
"The plan should prioritize projects that are in need of money."
Haha, in other words, "This money is for myself and my friends, but priority goes to me."
— Steve Patterson (@steveinpursuit) February 15, 2020
After the Infrastructure Fund Plan (IFP) was first announced by Jiang Zhuoer, the CEO of mining pool BTC.TOP, it immediately drew a lot of criticism from a large portion of the Bitcoin Cash community who wondered why these changes needed to be made. Though slight alterations to the plan were made, an inspection of the coded changes behind the 0.21 version of Bitcoin ABC revealed how big of a change was occurring, which was also quickly deemed to be an underhanded maneuver on the part of ABC developers.
The new ABC build containing the IFP was released by long-time Bitcoin Cash developer Amaury Séchet who had been with the project since its beginning. Those in favor of IFP include Séchet, Zhuoer, and contingencies of miners who saw it as a favorable alternative to having to pay other fees with which they did not necessarily agree. Initially, Bitcoin Cash’s leading public figure, Roger Ver, was also on board with the proposal, but quickly distanced himself from it after the blowback it received from the larger community. Those against the proposal include the majority of Bitcoin Cash-related businesses, individuals, mining pool operators, and Bitcoin Unlimited developers, the most vocal of which is Peter Rizun.
ABC 0.21 changes the BCH protocol to issue 5% of every new coin and 5% of all transaction fees to Amaury Sechet and his friends. Do not run this software if you care about the future of bitcoin: a peer-to-peer electronic cash system. https://t.co/7woOXGnIpd
— Peter R. Rizun (@PeterRizun) February 19, 2020
An informal survey conducted on Reddit revealed that the IFP wielded virtually no support among the community, with dozens of Redditors weighing in with the reasons why they were against the proposal. An average comment from that particular Reddit thread read something like this:
“I oppose this proposal. It claims to solve a non-problem and does so in an ineffective, immoral, and probably illegal fashion.
I believe the people proposing and supporting this proposal need to hit themselves on the head and wake up. I can not imagine how an ethical and intelligent person could support such a proposal.” – Reddit user tl121
Most IFP-related criticism stems from the following observations about how it is coded into ABC 0.21:
- It is mandatory, meaning that miners could not opt-out of having to pay a portion of their earnings from each block found.
- It is coded in a non-transparent and manipulative fashion, requiring only 66% of the support of the network to go into effect (as opposed to the previously proposed 95%), and cannot be easily queried from within the client.
- There is no time limit as to when the 5% “tax” will come to an end. It would theoretically run forever, or until there is a hard fork which removes it or alters its conditions.
- One of the projects in the “hardcoded whitelist” of supported addresses receiving the “tax” amounts belongs to an entity that has not been vouched the community (that being the General Fund, which is described as being “an unknown, unmonitored and non-transparent entity, presumably a Hong Kong company with an unknown shareholder structure, unknown management, unknown rules, unknown intentions”).
- It contains an automated method of garnering votes from everyone running the ABC client on the date of May 15th, regardless of what parameters have been manually set in order to vote against the IFP, which means that nodes will have to run non-ABC clients in order to vote against it.
This will make BCH no longer Bitcoin. I will not be following this fork. https://t.co/ZkcfxwjHk1
— Paul (@SingularityP) February 15, 2020
A counter-proposal client has already been developed that adopts all of the changes being made in ABC 0.21 except for IFP. Named Bitcoin Cash Node (BCH Node) and sponsored by Bitcoin Unlimited supporters, the client serves as a replacement for miners and businesses which are already running the ABC client but do not wish to partake in the IFP-related “tax.” The goal of the BCH Node is to offer an alternative, “tax-free” client while minimizing the risk of a chain split which would likely be harmful to all contingencies of the BCH ecosystem.
With 0.21 already released and being implemented by a dozen or so nodes as of the time of this writing, the wheels have been put in motion for what looks like an inevitable hard fork of the Bitcoin Cash network, unless if Séchet and other voices within the ABC faction can somehow better make their case. This would mean overturning an incredible amount of disdain and distrust within the community that has already managed to build within two or three week’s time.
As things currently stand, it is likely Bitcoin Cash will hard fork once again, creating two new coins, for the second time in three years. The price of BCH had already shed $100, or roughly 25%, in the last 6 days alone, falling 12% in the last 24 hours.
Unless some sort of drastic and unifying measures are soon taken within the heavily-shaken Bitcoin Cash community, the coin’s popularity could be permanently debilitated, ending its chances of ever surpassing BTC in a hopelessly awaited and now mythic “flippening” event. Amid all the chaos, at least Twitter seems to be having some fun with it.
— Btax (@Btax13) February 18, 2020
Craig Wright: Bitcoin is Illegal (except for Bitcoin SV, of course)
Bitcoin SV, which is an actual hard fork of Bitcoin Cash that came into existence after it failed to win the majority of hash power in 2018’s great Bitcoin Cash Civil War, is having an interesting week as its own burgeoning community is currently meeting up at the CoinGeek London conference. The event features speakers such as Wikipedia’s Jimmy Wales, nChain’s Jimmy Nguyen, and of course, Craig Wright.
Not one to remain out of the crypto news headlines for very long, Wright published a post to his blog last Thursday where he laid the grounds for his potential ownership and control of all forked version of Bitcoin, including BTC, BCH and of course, BSV. The blog entry, titled Forking and Passing Off, references several different computer information-related laws surrounding database ownership, attempting to make the case that BTC and BCH are both non-sanctioned use cases of the original blockchain database set forth in 2009, under the pretense that they are under his ownership.
How could they be under his ownership? Well, not only would his groundwork have to legally recognized, but he would also have to be legally recognized as Satoshi Nakamoto, the creator of Bitcoin. So far, he hasn’t managed to carry out this second task to the degree which he would have liked, and it is speculated that the reasoning behind making such a blog post in the first place is primarily for attention-related purposes. On one hand, he could possibly be scaring up new converts into switching from BTC or BCH to BSV. On the other hand, he could just be making good talking points to further discuss during his speech to be given at CoinGeek London. Either way, crypto law experts aren’t buying it.
tl;dr — guy writes rambling blog post describing a course of action, if you can call it that, with about the same chance of success as a moth in a flame. https://t.co/2XPalR2g6Q
— Palley (@stephendpalley) February 17, 2020