Bitcoin Cash Donations: who pays for blockchain development?
Bitcoin Cash Donations: who pays for blockchain development?

Bitcoin Cash Donations: who pays for blockchain development?

By Lorenzo Dalvit - 17 Feb 2020

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An update was released a few hours ago regarding the financing and donations for the development of the Bitcoin Cash blockchain

Roger Ver has distanced himself from Jiang Zhuoer’s message from January 22nd, despite his signature and that of his company. 

In an explanatory video, Roger reveals some communication problems between him and the Asian miner that could have led to a misunderstanding

Roger Ver doesn’t seem to like the announcement of Amaury Sachet published on the Bitcoin ABC website either. The text highlights some ways of selecting projects worthy of funding, which would exclude the candidacy of, Ver’s company.

The issue that has emerged in recent months brings attention to this problem: how and where to find resources for the development of a blockchain? 

It was once again the miner Jiang Zhuoer, CEO of Btc.Top, who expressed himself. His mining farm accounts for about 5% of Bitcoin’s hashrate, considering all three blockchains that affect the Sha256 algorithm: BTC – BCH – BSV.

bitcoin cash donations

The latest statement seems to have exhausted the need to convince the community. Plenty of ink has already been spilled and pragmatism has prevailed. 

A few simple points:


  • It will start by the hash voting, if 2/3 of network hash agrees, the donation plan will be put into effect. (I believe the miners have right to vote on how to spend their output).

  • For the 5% of the coinbase donated by miners, the miners shall have the option, at their sole discretion, to select a number of donation objects, such as: General Foundation, ABC, BCHD, Electrion Cash.

  • The donation plan will last for 6 months (as one version is valid for a maximum period of 6 months). I suggest that we stop the fund raising after 6 months, and we may restart it eventually to prevent it becoming a permanent rule.

  • There are numerous objections now, I am inclined to start the donation plan after that the community reaches a basic agreement. If they fail to achieve it, we could set up the General Foundation first, let’s see its operation effect funding by donation, then we could proceed the hash voting next time.


A major tug-of-war is about to begin and the community is on the move:

  • On Reddit, for example, there’s support for the “no” vote. A large part of the community that expresses itself on the social network seems to be against it and therefore “AGAINST IFP”.

  • When it comes to reporting preference for miners through their hashing power, there could be a boycott by the BTC and BSV miners. Even if they are not involved in the discussion, they could deflect consensus through their hashing power.

The players at stake in this game are divided into two macro categories: miners and non-miners.

The goals and problems of the miners are quite intuitable: to grow the network by extracting as much economic advantage as possible from it.

Among the non-miners are all those who develop, use, spend, accumulate, hate or love cryptocurrencies.

Who pays the developers of Bitcoin Cash?

Public blockchains are typically not controlled by a company or a state, and open source code development is delegated to passionate code developers, which has been the case for Bitcoin since its inception and for many other cryptocurrencies. 

As is well known, however, the goodwill of a small group of benefactors is not enough to evolve a protocol. The more complex the objectives, the greater the economic requirements to support the developments.

So far there have been several ways for stimulating the development of blockchain protocols:

  1. A growth in the network is followed by an increase in the price of the underlying cryptocurrency and the contributor perceives a speculative advantage. This has been true for the first groups of developers who have gained a lot from Bitcoin’s appreciation. The first developers were often also Miners using domestic hardware, which is now impossible. Currently many of those who support BTC do so thanks to the financial freedom gained in the early years of the chain.

  2. Big Miners are encouraged to support developments by paying programmers who are able to take advantage of the protocol they are invested in. This only became apparent after the specialization of these figures and the arrival of mining farms.

  3. Reward systems for developments included in the code of the blockchain, as happens with ZCash or Dash. A part of the transaction costs or monetary inflation end up automatically to a foundation created to support the programming costs.

  4. ICO and pre-mining with the establishment of a development foundation. With the arrival of ICOs and donations for the launch of new blockchain, it was possible to observe the phenomenon of donation. A large amount of money – as was the case for Ethereum – is donated to a group of visionaries who set up a foundation to finance the developments. Often part of the initial coin issuance is reserved for the exclusive purpose of future developments of the code.

  5. Software companies that take advantage of seeing one particular development of the code over another may have an incentive to support developments of the protocol. It is absurd to imagine that Microsoft would want to include a Bitcoin feature that could guarantee the use of one of its patents.

  6. A career in the development of Bitcoin could lead some developers to support a project, their contribution becomes an excellent reference.

It is worth noting that for some experts in the field, the protocol should be completed and made stable so that it is no longer subjected to dangerous dynamics of manipulation. Power games make the network fragile

Attacks by certain interested parties could make the system more fragile, which by its nature boasts of being unbreakable. 

Every time the code changes, there is a shift in weights and measures with sometimes unpredictable effects.

Lorenzo Dalvit

Blockchain enthusiast tutor, expert in sales and marketing, social community manager, artistic director, musician, lover of disruptive paradigms and life. All my skill are about human interaction and connection

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