Bitcoin Cash Dev Tax Future Unclear As Pulls Support

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A mining tax proposal in Bitcoin Cash has an uncertain future.

In order for it to work, a majority of miners would need to enforce a fork that encoded the transactions, which send the funds to an entity that uses them to fund development of Bitcoin Cash.

The Difficulty of Taxing Bitcoin Cash Miners

Not just miners, but other participants in the network would need to be in support of the proposal, brought on by various Bitcoin Cash personalities.

The developer tax proposal is simple enough to understand. Developers want to take 12.5% of miner’s mining rewards from them, in order to fund themselves. There are those in the mining and other parts of the Bitcoin Cash community who believe this to be a valid idea. One of them even runs a major mining pool.

Initially, it seemed like the thing was going to happen, with a number of important miners as well as and other parties lending their support. However, it appears it might take a lot more than that. At least one major mining pool, BTC.TOP, thought it would be a good idea to orphan blocks that didn’t comply with the new reward-sharing schedule.

At least one major signatory has dropped out, namely

Dead In The Water?

A note from the team on the site outlines why the company has decided to back out of a proposed 12.5% mining tax.

We participated in this process because we know that developer funding is an important issue to solve and that a proper funding mechanism will help Bitcoin Cash continue to grow as fast, reliable cash for the world. […] As it stands now, will not go through with supporting any plan unless there is more agreement in the ecosystem such that the risk of a chain split is negligible. […] We think it is clear that the existing proposal does not have enough support. […]

According to Bloomberg, that may not be all there is to it. Peter Rizun is quoted as saying that the tax is “wounded, but not dead.” Apparently, in May, Rizun and others may have an opportunity to try again.

As for now, without the support of major parties including the likes of, it seems there’s just not enough momentum built for the developer tax to take place at this time.

Miners are always free to donate some of their proceeds to development, as Litecoin’s Charlie Lee has suggested LTC miners do.

Many in the crypto space loathe the very idea of taxes, and levying one for the sake of developing something already being developed by so many companies, is an interesting idea, to say the least. Like the Linux Kernel and other open source projects, perhaps companies should fund the development directly, for their own benefit.

One potential outcome of a tax is a hardfork, that results in another two versions of Bitcoin Cash. Bitcoin SV is already a fork of Bitcoin Cash. A question of liquidity would arise if a third fork were to be born out of Bitcoin Cash, which itself is a fork.

The bottom line, for now, seems to be “no dev tax.” That could change, either soon or in May, but it’s unlikely unless an overall increase in public and company support is given to the idea.