Why Are Bitcoin Cash Miners Facing a 12.5% Tax?

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Bitcoin Cash miners have been told that they face a 12.5% tax on the blocks they mine as part of an “infrastructure funding plan”. But why has the tax been levied, and what does the community think of it?

From Voluntary to Mandatory “Donations”

Bitcoin Cash’s infrastructure funding plan was announced on Medium by Jiang Zhuoer, CEO of mining pool BTC.TOP, who began the piece by criticizing the existing method of raising funds for developers. Zhouer complained that the current system of miners voluntarily donating a portion of their income to developers left corporate donors with “an undue influence on developers” and promoted an uneven system where some members were “free riders” and others bore the community development costs.

Zhuoer’s solution is to adopt a system similar to that used by Zcash and force all miners to pay a 12.5% tax on their block rewards, with anyone not contributing having their blocks orphaned. The collected money will be paid into “a Hong Kong corporation” that has been “set up to legally accept and disperse funds.”

Zhouer Braced for Negative Reaction

Zhouer’s solution, which has the backing of Roger Ver and Jihan Wu among other big fish in the Bitcoin Cash pond, will not go down well with many miners (if any), something Zhouer has preempted:

Although the main beneficiaries of this plan is the Bitcoin Cash ecosystem, some in the community may have reservations or objections to this plan because it is somewhat unprecedented and represents a departure from tradition. But the conditions are ripe and the plan makes sense at this time.

In other words, it’s happening, get used to it. The new protocol, which will go live on May 15 along with a scheduled protocol upgrade, will be trialed for six months to gauge success.

“NOT Bitcoin”

The response from the non-Bitcoin Cash community was a cross between horror and disbelief:

Only time will tell what the smaller miners think of the plans, but we’re pretty sure we can guess their reaction…