While seemingly innocuous, the post, authored by cryptocurrency analytics site and mining pool BTC.TOP’s CEO, Jiang Zhuoer, unveiled a plan that caught many off guard.
The plan: to “secure a bright future for Bitcoin Cash, “12.5% of BCH coinbase rewards [should be directed] to a fund.” The plan further stated that if implemented, this tacit tax would likely raise around $6 million, which would be managed by a Hong Kong entity to boost the ecosystem of the Bitcoin fork, created in August 2017.
At first, this was widely supported; Roger Ver, former CEO of Bitcoin.com and one of the industry’s most prominent investors, along with Jihan Wu of Bitmain backed the proposal, as did a prominent developer of the blockchain.
Though, it seems that some have begun to switch sides, showing hesitance towards the implementation of this plan, especially because it effectively goes against the Bitcoin industry’s premise of centralization.
Bitcoin Cash Supporters Start to Dismiss Mining Tax
In a blog post, Bitcoin.com, Roger Ver’s company that has its own mining pool, revealed that the company will not go forward in supporting the plan for now:
“As it stands now, Bitcoin.com 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.”
They added that despite the names that originally signed the proposal, ” it is clear that the existing proposal does not have enough support, and we will be working to come up with a plan that is profitable for all the relevant parties and which preserves the fundamental economics of Bitcoin Cash.”
This hesitance was echoed by Canadian crypto mining startup Taal Distributed Information Technologies. The Vancouver-based company in a press release wrote that the effective “tax” may “be viewed as coercive and give rise to securities law issues and antitrust concerns in numerous jurisdictions where BCH is mined and traded.”
It added that if the proposal is activated, Taal will only mine on Bitcoin and Bitcoin SV.
Not to mention, this tax would theoretically decrease the profitability of Bitcoin Cash mining, which is already unprofitable in comparison to BTC according to Binance Research, potentially causing some to jump the chain for other SHA-256 networks.
Some Still Bullish on BCH’s Prospects
Although the decision not to implement the mining tax may be seen as a blow to Bitcoin Cash’s ecosystem by some due to decreased funding, many proponents are strong believers that the fork will see a strong price appreciation in the coming years.
Speaking with Forbes, Ver said that BCH may eventually surpass Bitcoin in terms of market capitalization:
Bitcoin.com is partnering with more household names to bring bitcoin cash usage to actual commerce for real people and real businesses. As that adoption of BCH-based commerce grows, so will its market cap.
This came shortly after he said in a CNBC interview that BCH has the “ability to go up a thousand times where it is currently because it’s looking to become peer to peer electronic cash for the entire world.”
Some, however, say that the upcoming block reward reduction event for BCH could be extremely bearish, potentially putting a damper on the cheery sentiment conveyed by Ver and his ilk.