Crypto Killed the Tax Man: Bitcoin Cash Escapes Hash War Over Mining Tax Grenade

Bitcoin Cash just dodged a hash war after a major mining pool supporting the BCH mining tax reversed its stance on the issue.
Bitcoin Cash
A full-blown crisis involving the taxation of bitcoin cash miners is at an end, for now. | Source:
  • Hash war may be averted after major mining pool withdraws its support for the plan.
  • Anonymous miners threatened a hash war in response to the tax, which could have lead to a chain split.
  • announced the withdrawal of its support for the tax plan in its current form.

The proposed Bitcoin Cash (BCH) tax levy on miners could now be dead in the water. – one of the five mining pools backing the plan – has withdrawn its support for the tax plan. The sudden u-turn comes just hours after an anonymous group of miners threatened to launch a hash war in opposition to the tax.

Hash War Averted For Now

Tuesday’s post by BCH mining pool,, announced the firm’s re-thinking of the BCH tax proposal. While the possibility of another chain split remains possible, will not continue to support the tax plan.

As it stands now, 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.

Tuesday’s blog post noted the tax plan’s lack of clarity when it came to deciding where the $6 million in tax collections would go.

We think the lack of clarity in this is one of the main drivers of confusion and contention around the various funding proposals. In venture capital, investors do not find talented technical individuals and hand them money to ‘do something’.

The tax was initially levied as a way of funding Bitcoin Cash’s development in-house. A 12.5% tax would be collected from BCH block rewards for 6 months until $6 million was raised. These funds would then be distributed to BCH developers for the betterment of the project.

The reason funding discussions are taking place is because proper funding will strengthen the Bitcoin Cash ecosystem, but it cannot come at the expense of compromising the foundational goals of Bitcoin Cash. will not risk a chain split or a change to the underlying economics.

Bitcoin Cash Hardforkers Stand Down

The anonymous mining group which threatened the chain split took notice of’s reversal. The group announced their intention to halt plans for a hardfork, and will continue to support BCH for the time being.

We have taken notice of post here. We trust are going to be able to convince the rest of the signatories to severely amend the IFP. We are therefore standing down and will not start our competing pool for the time being and will continue to support the BCH pools instead.

The tax proposal triggered vigorous debate among developers, miners and investors in the week since its announcement. Originally declared “set in stone” by its author, Jiang Zhuoer, the plan attracted criticism on a number of fronts.

But the turning point for came when the prospect of another chain split reared its head. Both Bitcoin Cash (BCH) and Bitcoin SV (BSV) spent tens of millions competing for hashrate in 2018.

The previous war also had a disastrous effect on cryptocurrency prices, not least Bitcoin Cash itself. The coin lost 87% of its value in five weeks in November of that year. A repeat of this messy affair is sought by no one in the cryptocurrency space.

Samburaj Das edited this article for If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

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