Home>EXCHANGES>Bitcoin Cash Dev Tax Could Have Serious Impact on Bitcoin Mining
EXCHANGES

Bitcoin Cash Dev Tax Could Have Serious Impact on Bitcoin Mining



Miners claiming to represent the majority of Bitcoin Cash’s (BCH) hash rate intend to implement a plan to tax other miners in the community. Most remarkably, this tax could also affect all cryptocurrencies that share the SHA256 algorithm, including Bitcoin.

Bitcoin Cash Miners to Be Subject to a 12.5 Percent Tax
The plan, under the name of Infrastructure Funding Plan for Bitcoin Cash, is becoming a heated topic of discussion among the crypto community. Taxes are never welcome. But the miners advancing the plan believe the funds from the tax would help ensure that BHC remains a strong and vibrant cryptocurrency.

According to the plan, miners would be subject to a mandatory tax of 12.5 percent, for a six-month trial period. On January 22, 2020, in his article announcing the proposal, Jiang Zhuoer wrote,
To provide this funding, we intend to direct 12.5% of BCH Coinbase rewards to a fund that will support Bitcoin Cash infrastructure. This funding will last for six months, and it will provide significant and much needed support to the Bitcoin Cash ecosystem.
To avoid free riding and the tragedy of commons, the Infrastructure Funding Plan for Bitcoin Cash will allow miners to orphan BCH blocks that do not adhere to the plan.
The Entire Set of Sha-256 Mining to Bear the Cost Under the Plan
Most notably, this tax could also impact the Bitcoin (BTC) ecosystem, argues Deribit in a recent blog post. Because BCH and BTC cryptocurrencies are very similar and both use the SHA256 algorithm, Deribit’s believes miners from the BCH network will migrate their machines on to the Bitcoin network to avoid the tax.
Hypothetically speaking, this could have a dramatic effect on Bitcoin’s difficulty, which in turn would make mining that much harder for smaller operators.
Before the tax, BCH contributed around 2.6% to the SHA256 reward pool. After lowering this by 12.5%, it will then contribute 2.275% (2.6% * 0.875). As a result, only 2.275% of SHA256 hashrate should be allocated to BCH as well. Therefore, some number of BCH miners who are still cashflow-profitable will reallocate their hashpower to BTC and BSV.
Deribit continued,
Their entrance will make difficulty on BTC and BSV go up and difficulty on BCH go down. If difficulty increases at equal price + hashing capacity, the ROI of all SHA256 miners goes down. We can thus see the cost of the tax is born by all SHA miners equally, making the least profitable SHA256 miners go out of business, not the least profitable BCH miners.
Roger Ver Changes His Mind on Dev Tax
According to the Bitcoin Cash announcement, the plan is supported by key personalities of the crypto ecosystem, such as Jiang Zhuoer, Jihan Wu, and Haipo Yang. However, voices of discord are now rising.

Notably, Bitcoin.com founder Roger Ver appeared to be a supporter of Zhuoer’s announcement at first. However, now, Ver seems to have changed his mind and rejects the plan. On January 30,  2020, Bitcoin.com stated,
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.
What do you think of BCH’s proposed Infrastructure Funding Plan for Bitcoin Cash? Let us know your comments below.
____________________________________________________________________________________
Images via Shutterstock The post appeared first on Bitcoinist.com.

 

source: https://bitcoinist.com/bitcoin-cash-dev-tax-could-have-serious-impact-on-bitcoin-mining/

TheBitcoinNews.com is here for you 24/7 to keep you informed on everything crypto. Like what we do? Tip us some BAT

Send Tip now!

Post source: Bitcoin Cash Dev Tax Could Have Serious Impact on Bitcoin Mining

More Bitcoin News and Cryptocurrency News on TheBitcoinNews.com



  • Bitcoin
  • Ethereum
  • Bitcoin cash
  • Litecoin
  • Cardano
  • Dash
  • Stellar
  • Ethereum classic
  • Lisk
  • Tron
  • Neo
  • Qtum
  • Omisego
  • Binance coin
  • Zcash
Scan to Donate Bitcoin to 1J6PGL1oemFb3hxabLygq4WgWx8cbfji1r

Please help us if you can with some Bitcoin

Scan the QR code or copy the address below into your wallet to send some Bitcoin

Scan to Donate Ethereum to 0xA8E701dd11280a98e8F2e0A14064AC829E32D50F

Please help us if you can with some Ethereum

Scan the QR code or copy the address below into your wallet to send some Ethereum

Scan to Donate Bitcoin cash to qrth4e0g93h3gpxex8ycwuxtsa332tha5qvkmlz0g5

Please help us if you can with some Bitcoin cash

Scan the QR code or copy the address below into your wallet to send some Bitcoin cash

Scan to Donate Litecoin to LTxxjySMDtERJhHYJ99UFW9AamAWTwCAZ4

Please help us if you can with some Litecoin

Scan the QR code or copy the address below into your wallet to send some Litecoin

Scan to Donate Cardano to DdzFFzCqrhsopoZLhbouUwh2NvvWMPeFrXQW9vNNpPKrjKbRGyLRN5joJgCeZ6e1MRHtPHeLffpkNpQs5AdDA8qFCZ4gA9bYtaerNQTk

Please help us if you can with some Cardano

Scan the QR code or copy the address below into your wallet to send some Cardano

Scan to Donate Dash to XmAdEHrwiVZJVkAxe8hK5U6HZB59L5yhmK

Please help us if you can with some Dash

Scan the QR code or copy the address below into your wallet to send some Dash

Scan to Donate Stellar to GD4KROE42HPOMT7BT6M27HHLFCOSIXPYY2V3WSCX5FYEWRJDIJQ4RWFT

Please help us if you can with some Stellar

Scan the QR code or copy the address below into your wallet to send some Stellar

Scan to Donate Ethereum classic to 0x5BF3fCAC8deA20CF21C9D0D9d058E00EEfc431Ae

Please help us if you can with some Ethereum classic

Scan the QR code or copy the address below into your wallet to send some Ethereum classic

Scan to Donate Lisk to 15642042552518336132L

Please help us if you can with some Lisk

Scan the QR code or copy the address below into your wallet to send some Lisk

Scan to Donate Tron to TYnAenRiV6BsTiE6FVyAcDDxZtBKUQTFxN

Please help us if you can with some Tron

Scan the QR code or copy the address below into your wallet to send some Tron

Scan to Donate Neo to ATiXRHVqYqrNktbxJfcDETfnrSUWSG4cPb

Please help us if you can with some Neo

Scan the QR code or copy the address below into your wallet to send some Neo

Scan to Donate Qtum to QUYXxY6kX7TY2HSLwVYMwFaJNZLwvX5uyp

Please help us if you can with some Qtum

Scan the QR code or copy the address below into your wallet to send some Qtum

Scan to Donate Omisego to 0xA8E701dd11280a98e8F2e0A14064AC829E32D50F

Please help us if you can with some Omisego

Scan the QR code or copy the address below into your wallet to send some Omisego

Scan to Donate Binance coin to 0xA8E701dd11280a98e8F2e0A14064AC829E32D50F

Please help us if you can with some Binance coin

Scan the QR code or copy the address below into your wallet to send some Binance coin

Scan to Donate Zcash to t1cBCyKgSSqWaNrkpvQZUSTuxMmAbbAyFpZ

Please help us if you can with some Zcash

Scan the QR code or copy the address below into your wallet to send some Zcash



Source link

Review Overview

Summary