Two new Bitcoin forks taking 10% of block reward to fund development


Nov 19, 2015
Quite interesting to see both Decred and Zcash adopt this model.

Self-funded development via block subsidy – In order to have an ongoing source of funding for development work, a consensus rule has been added to allocate 10% of each block subsidy to a development organization. This entity is transparent and responsible for funding development work performed by current and new developers so that the project remains sustainable without a funding dependence on outside forces in the future.

Zcash is launching as a for-profit company. For its first four years online, a portion of every mined Zcash coin will go directly to Wilcox’s Zcash company and a smaller portion to a non-profit he’s creating to oversee the Zcash code and community longterm. Wilcox says that he plans for 1 percent of Zcash’s currency to ultimately go towards that non-profit, and 10 percent to be paid to the for-profit startup.

That for-profit strategy, Wilcox says, was designed to raise money to fund the project: Much of the 10 percent it earns will repay Wilcox’s investors, who as of November had put more than $715,000 into Zcash. Those investors include Naval Ravikant, an investor in Twitter and Uber, Barry Silbert, the founder of startup equity-trading platform SecondMarket, and Roger Ver, a staunch libertarian who’s invested in bitcoin startups and Bitpay, and who also bankrolled much of the legal defense of now-convicted Silk Road creator Ross Ulbricht.
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Active Member
Nov 16, 2015
Self funding blockchains are indeed a fascinating development. Both Dash and Bitshares also have this build into the protocol, with sophisticated governance mechanisms to boot, to ensure that the funds are well allocated.

Have to admit I am very skeptical of the "premine". Why does Zcash need that if they will have a self funding blockchain? I am also skeptical that these funds are going to a for profit company, it should be going to a non profit foundation, like it does with both Dash and Bitshares.

It also seems crazy to me that the for profit company will be paying its investors, with the funding coming from the blockchain. If there is a presale or "premine" they should just be given the tokens, that way they are in the same boat as everyone else, and invested in the currencies success.

I really do think some altcoins hold themselves in some sort of special regard, it is only because it is zerocash that I think they are getting away with this. I think otherwise everyone would be shouting scam, your average new altcoin can not get away with such things, I do not see why Zcash should be an exception.
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Staff member
Aug 28, 2015
I have always thought that this strategy makes sense (some of the coinbase and txn fees should go to dev), but would prefer to see all funds acquired in that manner to require 4 years (the typical stock options vesting period) before they can be spent. That eliminates the possibility that the funds could be used for a pump and dump, unlike a premine or other strategies. VCs expect a 4-10 year investment to payoff cycle and look for a 10 to 100x return.


New Member
Jan 30, 2016
I can definitely see the advantages of a self-funding mechanism to pay for development work. However, this also seems like a centralization point that could be attacked or outlawed. Legal attacks might be mitigated by using a legal entity in a friendly jurisdiction somewhere in the world. However, the existence of a development fund poses several other questions. Who would administer the fund? How would these members be selected? If users revolted due to bad decisions of the administrators and successfully forked Bitcoin, what would happen to the money left in the old fund?

Justus Ranvier

Active Member
Aug 28, 2015
I'm generally sympathetic to the motivations behind both of those projects, but in the end an altcoin is still an altcoin.

The best long term solution is to just fix Bitcoin.
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Zangelbert Bingledack

Well-Known Member
Aug 29, 2015
I'm not convinced development needs direct funding. After all, many coders of the current Core calibre joined on many years ago working for free, and the pool of coders interested in Bitcoin is orders of magnitude larger now but they are not joining on at all proportionately (except mainly those who are willing to toe the party line), so the explanation must be that there is something keeping them from joining.

I definitely don't buy the line that there are too few of such experts in the world "so we are stuck with these ones"!

I imagine that the motivation to work on Core is quite low for a non-sycophant, both because of the unsatisfying nature of having your proposals batted down and because it would be very hard to break into the top ranks in order to get the prestige and the consulting work that comes with it.

Breaking the monopoly on implementations should change all that. It should be much easier and more satisfying to become one of the top devs of an implementation that has 30% share of nodes/miners/users, and I would expect lucrative consulting work would be forthcoming if devs wanted it.

Most telling is how the wallet ecosystem has exploded with development during the same timeframe, despite those devs working largely for free as well (correct me if I'm wrong). All that talent came on like we would have expected from the gigantic 2011 and 2013 price growth, while node client talent has remained closely controlled and insular.

I imagine the same explosion in dev participation in node clients regulating Bitcoin consensus will happen once the concepts we've discussed in this forum get out there, or simply once a hard fork away from Core monopoly actually happens. We may find when the dust settles that there are an abundance of developers itching for the opportunity to make a name for themselves by helping Bitcoin succeed.
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Well-Known Member
Aug 19, 2015
I'd say it is in the miners best interest to further the development of Bitcoin.

Sadly, we lack long-term thinking miners at the moment. I saw that KnC has a couple positions open, though...