Taal Rejects Proposal for Bitcoin Cash Mining ‘Tax’

VANCOUVER, British Columbia, Jan. 28, 2020 (GLOBE NEWSWIRE) -- Taal Distributed Information Technologies Inc. (CSE:TAAL | FWB:9SQ | OTCQB:SQRMF) (the “Taal”) announced that it is not in favour of, and will not support, the newly-announced proposal to cause mining operations active on the Bitcoin Cash (“BCH”) blockchain to pay a 12.5% contribution on earned rewards to a Hong Kong-based corporation backed by four leaders representing five of the current largest known BCH mining pools (the “BCH Mining Group”), as first announced on the website medium.com by the head of BTC.toppool.   

On January 22, 2020, it was announced that a funding plan (the “Mandatory Funding Plan”) had been privately agreed upon by the BCH Mining Group and will be implemented on May 15, 2020 in conjunction with the next protocol upgrade of the BCH network. It was stated the Mandatory Funding Plan is proposed because BCH protocol developers do not have sufficient funds to support their continued infrastructure work; as a result, the BCH community has been discussing how to pay for the sustained protocol development work needed for the BCH network. The BCH Mining Group announced that the Mandatory Funding Plan is intended to last 6 months, until November 15, 2020, and will divert approximately USD $6 million worth of BCH coins from miner block rewards to a new Hong Kong corporation which would then provide funding to BCH developers. No details have been provided about who controls this new Hong Kong-based corporation or who will decide how to spend the BCH coins raised from the 12.5% forced contribution by miners.

It is Taal’s view that the Mandatory Funding Plan is a required “tax” enforced by orphaning BCH blocks mined by any operations that do not submit to the new scheme dictated by the five pools in the BCH Mining Group. If dissenting miners do not wish to pay the 12.5% contribution, they will have their blocks rejected (orphaned) by the BCH Mining Group and lose the entire block reward they would normally earn for writing a block. If the BCH Mining Group control a majority of BCH mining activity (including the significant anonymous portion of mining hash on the BCH network), they have the ability to unilaterally impose their will – and the 12.5% effective “tax” – upon minority miners, or alternatively force those minority participants off the BCH network by making it economically unviable to continue mining BCH.