The Moral Case Against “Bitcoin Cash”

Most people opposed to the “Bitcoin Cash” project are critical of their hijacking the brand name. There is no trademark protection available for the term “Bitcoin”. That means that anyone is free to call their unrelated project “Bitcoin” and there is nothing anyone can do about it with trademark law. “Bitcoin Cash” is profiting from that loophole.

While not illegal, this may be questionable from an ethical point of view.

On the other hand, the supporters of the “Bitcoin cash” project think they have a claim to the name. In their view, they are only forking the code to uphold the original concept.

But I have another problem with the “Bitcoin cash” vision.

The main selling point seems to be that they want to keep fees low with their bigger blocks.

That obviously means less fee income for miners. The latest information available shows $3,436 in fee income over the last 24 hours for “Bitcoin cash” (moving $678 million) and $667,539 in fee income over the last 24 hours for Bitcoin (moving $6.879 billion).

If true, this shows that the concept is working. “Bitcoin cash” fees are two hundred times lower while moving around ten times less. That in turn means that the fee per dollar moved is around twenty times lower for “Bitcoin cash” at this particular moment.

The moral problem with that is: Someone has to pay for securing the network. Mining hardware and electricity to run them cost money. If the users are not supposed to pay, someone else needs to do so.

One answer is to pay by inflation. This has been what Bitcoin has done in its first years, when usage was low. Miners got the newly mined bitcoins as reward and little else.

Obviously, this can’t go on infinitely if you have a fixed cap on the number of coins that can be issued. At some point, users actually need to pay their fair share, as determined in the auction price for getting into the next block, as opposed to getting free rides.

I for one don’t like the idea of users getting a free ride, pushing the costs to someone else. That is basically the same mentality as someone who thinks taxes are for everybody else to pay. I think it is no coincidence that many supporters of the “Bitcoin cash” project are advocating against paying a fair share in taxes as well.

A couple of weeks ago I saw a poster at a train station asking people to kindly refrain from calling an ambulance for a mosquito bite, or a toothache. Ambulances are not your taxi.

That reminded me of the idea of putting all coffee payment transaction on the basic layer blockchain, to be recorded for eternity in thousands of copies all over the globe. That’s an irresponsible use of precious public infrastructure. You’re not supposed to do that, in my humble view. Take those transactions to cash, credit cards or some second layer Bitcoin application like lightning network.

Don’t call an ambulance for a mosquito bite. Don’t put your small amount transaction on the basic layer blockchain.

If you insist on doing so, for the very least pay your fair share of the cost of keeping the network safe. Don’t try to get someone else to pay for your lunch.