Five big mining pools called for "strong donation", 42 million yuan BCH miners decided?

Text | Huang Xueyi

Production | Planet Odaily

On January 22, CEO of Leibite Mining Pool (BTC.TOP) Jiang Zhuoer published a blog post announcing a "BCH Infrastructure Financing Plan" (hereinafter referred to as the "Plan").
"Plan" supporters include Jiang Zhuoer, Wu Jihan (Antpool (BTC.com)), Yang Haibo (ViaBTC), and "Bitcoin Jesus" Roger Ver (Bitcoin.com). The content of the "Plan" is, "We "A proposal will be added to BCH's May upgrade to donate 12.5% ​​of BCH's block rewards for the next 6 months to developers; it has now established a company in Hong Kong to prepare for acceptance and distribution of funds; With the BCH mining pool, "We will be alone in those BCH blocks that are unwilling to follow the plan."

This post sparked a thousand waves and was quickly discussed widely by the BCH community.

According to the Odaily Planet Daily, most currency holders and miners agree with the starting point of this "plan" -raising funds for public chain development, but the way the "plan" is implemented is quite controversial.

"Donation is a good thing, and it is terrible that these four people can agree to implement it." One netizen exclaimed. There are two kinds of crises implied in this plan. The "planning" launch of the mining pool has a lot of computing power (power) and is quite arbitrary.

According to BTC.com data, these 5 mining pools rank among the top 7 in BCH computing power, with the total computing power exceeding 51%, reaching 54.5%, and possessing considerable speaking power.

After listening to the community's opinions, Jiang Zhuoer and Roger Ver re-clarified that this plan is only "proposed", and there is still room for discussion on the details of the "plan". Whether to implement it or not can be determined by means of voting by computing power.

But the big coal miners' "alliance" has been formed, and most small and medium miners are unlikely to have a say.

"The Solitary Alliance"

"There are three major elements of the public chain battle: money, technology, and users. The technology battle does not happen overnight, but money can stand out." Niu Fengxuan, founder of DAppReview, once asserted.

Indeed, without money, it means that the underlying technology of the public chain is difficult to develop and it is also unattractive to developers of the upper ecosystem. In order to avoid the development of broken grain and further strengthen the ecology, there is no doubt that the public chain cannot do without continuous financial support.

In addition to large one-time fundraising, there are two models that can bring "cash flow" to the public chain. One is a block reward model similar to Dash and Zcash (also known as a "tax-extraction" mechanism), and the other is a Tezos-like inflation reward model. The "plan" proposed by Jiang Zhuoer and others belongs to the first category.

The "Plan" mentioned that while the BCH was being upgraded on May 15, this year, a 6-month block reward donation will be opened. The donation part accounts for 12.5% ​​of the BCH block reward. Based on the current US $ 300 per BCH, the value of the donated funds in six months can reach US $ 6.07 million (approximately 42 million yuan).

In order to ensure the participation of the BCH mining pool, the "Plan" stated that "We will be alone in BCH blocks that are unwilling to follow the plan. "

In the SHA-256 mining algorithm, if a block does not belong to the longest chain, it is called an "solitary block"; the solitary block is meaningless, and the miner who finds this solitary block will not get any block reward.

In this "plan", the term "solitary block" is used as a verb, which means that once the plan is "implemented", the "plan" initiated mining pool will have a certain computing power advantage to jointly exclude those who do not Donate ”the mining pool so that it cannot join the longest chain and get the corresponding block reward. In order to achieve this goal, the collaborators have also been referred to by some netizens as the "Orphaned Alliance."

The Plan also disclosed that a Hong Kong company (in the form of a fund) has been set up to accept and allocate funds, and the funds will be used to pay for development costs.

Regarding activating this feature at the time of the protocol upgrade, "Plan" said that it will help ecosystem participants to promote it in a consistent manner. Of course, this also means preparing your code for testing and deployment as soon as possible. "We will work with multiple BCH nodes to join the code and promote this plan as part of the May 2020 agreement upgrade."

In addition to the "plan" content, Jiang Zhuoer, who is responsible for publishing, also proposed his own ideas on the donation process:

  • Before the start of the miner donation plan, the BCH Miner Fund will be established and accept donations from miners, as well as donations from non-miner individuals and companies. The foundation will run for a while and let the community see the effect. The foundation's decision power will be voted by the donor in proportion to the donated funds (those who do not want to vote can abstain).
  • Support miners to donate directly to development projects. For example, miner X can start n% of the production to the address of project A, and m% of the production to the address of project B. If the miner does not know which project to donate to, he can donate to the foundation, or refer to the fund's distribution ratio and donate directly to each project.
  • What if some miners feel that all projects are bad, don't want to donate, or don't accept donations? In order to avoid the "tragedy of the commons", he has the right to send this part of the output that should be donated to the black hole address to permanently destroy these coins-this is essentially donating these coins to all BCH holders.

800 BCH are difficult to assemble,

The "tragedy of the commons" developed by the public chain

After the "plan" was released, it aroused heated discussions within and outside the community.

"It should have been so long ago!" Many BCHer cheered in various communities.

According to the Odaily Planet Daily, most currency holders and miners agree with the starting point of this "plan"-to continuously raise funds for public chain development.

Just in the middle of last year, BCH developers had problems raising funds.

On May 30, 2019, BCH organizations such as Bitcoinincash.org launched a total of 800 BCH (about $ 350,000) to support the continuous operation of the development team. (Note: BCH currently has these four main development teams, Bitcoin ABC, Bitcoin Unlimited, BCHD and Bcash)

"The 800 BCH raised this time is for the current needs of developers. This is the first phase. After that, we will also seek stable and continuous financial support. I am afraid that before the BCH Development Foundation finds a long-term funding source, I am afraid It all depends on fundraising, "said David R. Allen, one of the sponsors.

Unexpectedly, as long as the long-term fundraising plan started, it was poured with cold water.

Half a month after the fundraiser was launched, Cryptopotato reported that the BCH Development Foundation had raised only 43% of the target amount. It wasn't until some developers cried in the forum that the fundraising funds were doubled. But for developers, what will happen next time fundraising is unknown.

As with other decentralized communities, BCH developer funding faces an inefficient and unsustainable situation. This "plan" obviously needs to solve this problem thoroughly in a relatively long period of time.

"Although there are some disputes among all miners for donating developers, it is undoubtedly a better solution than donating developers to a few companies. Adequate donation funds will help speed up the development of BCH and quickly achieve the roadmaps such as avalanches. Development Plan."

The "Plan" also revealed a "urgency", bluntly BCH should seize the window before the arrival of the bull market to give developers sufficient food and grass to accelerate the development of BCH and user growth.

Part of this "urgency" comes from its "brother" BSV. Both have similar large-block expansion routes and payment public chain visions, but after the two were separated at the end of 2018, BSV's on-chain application and transaction volume soon surpassed BCH. The figure below shows the daily trading volume of BTC (yellow line), BCH (green line), and BSV (red line). From the figure, it can be seen that beyond the stress test, the trading volume of BSV has overwhelmed both.

Concerns about a hash power dictatorship

Opposition is focused on the form of implementation of the Plan.

"The donation is not terrible. The terrible thing is that the four can agree to implement it." In the words of a netizen.

There are two kinds of crises hidden in it. The "solitary league" has too much computing power (power) and is arbitrary.

A BCH bluntly stated on the forum, "These mining pools (intended to be) backed by computing power, exclude uncooperative blocks, (ie, modify the agreement in a substantial sense, so that each block of new coins has a Copies directly or indirectly to the team. This solution will change the fundamental nature of BCH: from a fully open public chain to a semi-private chain of ambiguous nature that divides some of the new coins into the hands of specific people in the agreement. Some people may I think this is a last resort plan for survival. Considering the long-term promotion, investment, and talent demand, we don't really understand whether it is cost-effective … The mining pool is forced to redistribute coins with computing power. I do n’t know the same allocation Can a person collect taxes on any currency and any transaction on the chain, as long as he has done public relations, there is no taboo. "

The "Orphaned Alliance" announced this "mandatory plan" behavior without public discussion, which runs counter to the decentralized decision-making mechanism of the blockchain.

The "Orphaned Alliance" is not unconscious about this, saying in the Plan, "Because this plan is unprecedented and deviates from traditional practices, some people in the community may have reservations or objections to the plan. But (we Think) conditions are ripe. "

After listening to the community, the Orphans Alliance seemed to realize that the problem could be worse than expected.

On January 25, Bitcoin.com (a website of Roger Ver) issued an announcement saying that the "plan" is still being developed. The proposed changes will not take effect until May 2020, and there will be sufficient time to allow as many parties as possible to discuss a solution. The chain will not be split due to protocol changes. If most miners are inefficient, infeasible or otherwise detrimental to BCH or its business, miners may choose to terminate the fund.

In an updated blog post, Jiang Zhuoer called for a public vote on the implementation of the Plan.

"I hope to complete a 3-month miner vote (possibly using bmp.virtualpol.com to vote). If 2/3 of the hashrate vote in favor of the donation, I hope the developer can write the donation plan into 2020 The May version upgrade, if it is too late, write the November 2020 version upgrade, and the donation will continue for 6 months until the next upgrade, "Jiang Zhuoer wrote.

However, once the big miners have formed an "alliance", most medium and small miners are unlikely to have a say.

"From the perspective of professional miners, this is indeed difficult to accept, because the miners' net profit is already low enough. Miners who do not reinvest their profits are thrown away in fierce competition, which will inevitably shrink market share. More importantly, the motivation of miners is often inconsistent with our needs (pursuing the benefits of the future). If there is no longing for the future of BCH, there are not many reasons to care about the development of BCH. Relevant.

Even if some miners are willing to make certain sacrifices for long-term benefits, in the short term, miners will face successive challenges of halving block rewards and paying 12.5% ​​"taxes" on the basis of small profits. A netizen suggested that if the computing power is reduced sharply, it will also pose a hidden danger to the security of the BCH network.

Hong Shuning, a digital currency analyst, expressed concern about the use of donations. "The key lies in whether the miners can freely choose the donation target. If so, how to avoid donating to themselves, and if not, how to avoid being manipulated by a few people."

In response to this, Jiang Zhuoer replied on Weibo that "the money I donate is up to you, and it is not a big problem."

But there is another problem. If many passive donors have done so, does this "plan" make sense?

Of course, the "plan" is still under discussion, and details need to be filled and improved, we may wish to wait patiently.

It is worth mentioning that in May 2018, Copernicus, the BCH development team of Bitmain, proposed a block reward model similar to Dash. However, at that time BCH was on the eve of the fire of the fork. Although the proposal caused heated discussions, it was not promoted.

If the "plan" is successfully implemented, some BCHers are already thinking "Will there be a public chain to follow suit".

However, observing the particularity of BCH, we can see that it may be difficult for other public chains to implement it.

First of all, this is a "tax payment" plan proposed by the big miners, which is contrary to their role positioning and short-term interests.

Secondly, in the mainstream POW currency, except for BSV, I am afraid that no currency can achieve a high degree of consensus among stakeholders, and the computing power is concentrated there.

After all, are you optimistic about this "plan"?