It all started with this Medium article: “Infrastructure Funding Plan for Bitcoin Cash“.
The article was written by the CEO of one of the biggest Bitcoin Cash mining pools and co-signed by three of the highest profile names in the BCH ecosystem. Basically, the proposal was that for a six-month period, miners would allocate 12.5% of the block reward to fund infrastructure and protocol development. This would result in approximately $6M worth of BCH being made available to pay developers who work on the network.
To say that the article ruffled some feathers would be an understatement. First came the questions, like who was going to control the money and decide how it would be used, was it right to orphan blocks that didn’t follow the new coinbase rule, and was this a tax?
I considered the questions fair because the Infrastructure Funding Plan (“IFP”) was a big deal. Throughout the decade long history of Bitcoin and all of its major forks, the block reward had always gone entirely to the miners to incentivize them to secure the network. To divert some of that money to fund developers constituted a non-trivial change.
But the inconvenient truth is that protocol development is hard. For about a year, Amaury had been trying to explain to the community that Bitcoin ABC needed proper funding if they were going to be able to accomplish their mission. They wanted to hire more protocol developers, cryptographers, web developers, and so on, not to mention they needed to have enough money to be able to provide a certain amount of stability for their potential new hires.
But many in the Bitcoin Cash community didn’t see it that way. In their minds, the only way developers should be paid was through donations. Prove your work and then beg for funding, to put it bluntly. They also believed that miners forcing other miners to pay 12.5% of their block reward to developers or risk getting orphaned was the equivalent of forcing these miners to pay a tax.
Little by little the mob grew. The anti-IFP faction started putting out articles and signing joint statements, and Bitcoin ABC was suddenly the bad guy with Amaury cast as the devil himself.
I admit that at first I wasn’t sure what to think. Initially, I was excited because I thought it meant Bitcoin ABC would finally have the proper funding to pursue their roadmap. It also didn’t hurt that because of the way sha256 mining works, the IFP wouldn’t really cost BCH miners much to begin with since all the other sha256 miners would bear the vast majority of the 12.5% going to the developers.
But seeing how the community reacted concerned me. What if everyone dumped all their coins in protest? What good would the IFP be if the coins weren’t worth anything to begin with? Another way of putting it would be that I was afraid of what would happen to my money.
The funniest thing about the whole episode was that the original article had this section in it:
“Non-debate theory：Non-debate theory is my invention. Non-debate, is to gain time to work hard. When you debate, everything becomes more complicated and it wastes time. Nothing can be done. Don’t debate, and just try. Be brave and experiment.”
Unfortunately, for the next several months all we had were debates. And in the end, rather than being brave and being willing to try, those who originally proposed the IFP backed down and Bitcoin ABC was left high and dry.
Despite having created Bitcoin Cash and thanklessly maintaining and stewarding the project for years, Bitcoin ABC was essentially told to either work for donations or their services would no longer be needed.
To their credit, ABC did everything that was asked of them. They put together a business plan detailing all the work they wanted to accomplish. How much would be spent on what, how long each piece would take, and so on. But even after all that, while every other useless node team got funded, Bitcoin ABC got nothing.
So Bitcoin ABC did the only thing that made sense. They announced they would implement a new coinbase rule that would require anyone running their software to mine and validate blocks to allocate 8% of the block reward to an address under ABC’s control. Half of this money would go to fund protocol development, and the other half would go to a Global Network Council of stakeholders who would decide how best to use that money.
Everyone balked. A group of hobby developers forked the ABC codebase, removed the new coinbase rule saying it was a tax, and on November 15, 2020, the Bitcoin Cash network split into two separate chains.
The vast majority of the ecosystem, including the mining pool operators who had originally proposed the IFP, supported the anti-ABC camp.
The mob had won, and it wasn’t close.
After the split, Bitcoin ABC was forced to start all over again. They went from being the lead development team of a network that once had a higher market cap than Ethereum, to now finding themselves working on a network that was barely hanging on by a thread.
But they didn’t quit. And neither did the small group of people who supported them. A few dedicated miners kept the chain alive, and as the BCH mob dumped their newly split BCHA coins, investors like myself who believed in what ABC was trying to do bought as much as we could.
Instead of giving up, ABC regrouped. Despite anti-ABC forces continuing to mount various attacks even after the split, they were no match for Bitcoin ABC who easily overcame every challenge and continued building, with some members even doing so on a volunteer basis in order to keep the lights on until the proceeds from the new coinbase rule were worth anything.
The team put their heads down and focused on the future. They had to create new infrastructure like block explorers and wallets that supported the new coin. They coordinated with the different exchanges to protect their users. All while working behind the scenes to put together an entirely new brand, new logo, new website, new base unit, and most importantly, new code.
I obviously can’t read anyone’s mind. I can’t tell you why the miners did what they did, or why some people saw the new funding mechanism as a potential solution while others saw it as a huge problem. But I think what it boils down to is what we each value, and whether we choose to see the good in people, or the bad.
I supported Bitcoin ABC and the BCHA side of the fork because I had witnessed all the good work Amaury and his team had accomplished over the years, and I had faith they would use the funding to do the right thing. On the other hand, those who were against the IFP were afraid that this would give Bitcoin ABC too much power. They worried Amaury would take the money and run, or just sit back and collect a paycheck while achieving nothing in return. In other words, despite having no evidence to support such fears, they chose to see only the potential for bad in people.
I agree that Bitcoin shouldn’t require trust, but to me that doesn’t mean we shouldn’t ever trust anyone. So the question is, what do you value? Do you value seeing the good in people, in giving people the opportunity to profit off their work when they’ve earned the right to do so? Or do you value acting scared and protecting yourself against the smallest dangers no matter the cost?
I believe in rewarding people who are good at working, not at politics. I believe in being brave and standing by your convictions even if you are in the minority. And I believe that the new coinbase rule isn’t a tax but a demonstration of free market capitalism at its best. After all, how could it have been a tax when last I checked no BCH miners are currently paying a single satoshi for protocol development.
There’s this saying that good ideas don’t require force. I can tell you right now I chose to support Bitcoin ABC not by force but my convictions.
As for the BCH miners and other stakeholders who hung ABC out to dry, it looks like the only thing they were ever forced to do was cower to the mob, and that’s definitely not the kind of community I want to be a part of.
In Part 5, we will look into the promise of eCash.