Bitcoin Cash miners propose to redirect 12.5% of block rewards to ecosystem fund

In a blog post released today Jiang Zhuoer, CEO of BTC.TOP, the largest mining pool on Bitcoin Cash (BCH), shared a proposal to redirect 12.5% of BCH block rewards to a Hong Kong based ecosystem fund. Under the proposal, block rewards would be redirected to the fund for six months, beginning on May 15th 2020, Bitcoin Cash’s next semi-annual upgrade. Zhuoer claims to have support from the majority of BCH hashrate, including BTC.TOP, Antpool, BTC.com, ViaBTC, and Bitcoin.com, which collectively make up about a third of Bitcoin Cash’s hash rate. Under the proposal, miners will orphan BCH blocks that do not follow the plan in order to ensure all miners participate.

Why it matters:

• Although not done with malicious intent, the proposal highlights the potential pitfalls of miner centralization. If implemented, it would demonstrate how such centralization can be used to take over a protocol and capture additional seigniorage.
• Development funding is a known weak point for many cryptocurrency projects. Therefore, it is unsurprising to see bold proposals for solving this issue. At current prices, the proposal would raise ~$7 million for Bitcoin Cash ecosystem development in just six months.