Burstcoin (BURST) PoCC Resigns after Scandal; Community Optimistic It Can Continue

January 3, 2019 / by Zachary Mashiach

The Burstcoin (BURST) community was rocked last week by a scandal involving the Proof of Capacity Consortium (PoCC), a group of semi-official Burstcoin developers. The PoCC commandeered miner’s hard drives without consent in order to merge mine Bitcoin HD (BHD).

The PoCC offered no compensation and sold all of the BHD they mined for profit, instead of giving the BHD to the Burstcoin miners who earned it. That despite the fact that merge mining BHD led to increased electricity costs since Bitcoin HD is less efficient than Burstcoin.

Further, the PoCC merge mined BHD to attack Bitcoin HD, diverting most of the mining rewards from actual BHD miners and dumping BHD to crash the market. An anonymous Bitcoin HD miner has already threatened that the BHD team will retaliate against BURST with a 51 percent attack.

A community backlash ensued after this scandal came to light, and now the PoCC is resigning according to its official statement:

We always said we owe this community nothing and some of us even said they doubt there is such a thing as “the community. There is a more or less loosely coupled bunch of (self-)interest groups, so when we talk about community, we, in fact, mean “community.

There always has been a very unhealthy expectation attitude within the community.

You give us stuff. We gladly take it and may even utter a cheerio or two.” There also is a severe misconception about the role of the PoCC. We are not just developers. We are a team of highly skilled individuals with a lot of experience.

Statements we heard in the past days and the perceived sentiment made us re-evaluate our position and ambition within the Burst ecosystem. While we absolutely believe we could have led Burst to the top 10, we have come to the conclusion that such an endeavor needs undeviating coherence of core team and a determined goal-oriented community.

We also came to the conclusion, that there is not a healthy culture of give and take between core team and community and what’s worse, that it is unlikely to establish such.

We do not feel to have been in any sort of power, certainly nothing we would need to cling to. The past days made our decision to leave Burst easy. There will be no power struggles, fights or anything warmonger-ish we have heard in the past days. It’s all yours – good riddance!

The PoCC resignation statement made no comment regarding the scandal that caused this resignation in the first place. The PoCC says it is halting development but will keep running critical infrastructure like the block explorer, the semi-official Burstcoin news page, and the Burstcoin wiki, but may shut them down in the future. The PoCC states that it will sell this critical infrastructure at “fair cost covering terms,” and not simply give the infrastructure over to people willing to run it.

Further, PoCC says it now has the right to dump its coins, whereas before it was required to hold the coins.

The PoCC members have agreed to waive the requirement to hold BURST and can freely decide what to do with their coins. Some have decided to sell and to do so in a fair manner. Their hodl accounts are being transferred to the exchanges shortly after the publication of this letter.

The price of BURST has already crashed 20 percent today, following this announcement, likely a combination of panic selling and PoCC dumping BURST. The coins that PoCC is referring are likely from the 1.5 percent fee on their pool, which was previously used as a development fund.

This entire saga shows the danger of giving too much power to a centralized development team. PoCC abused its power to make a profit by merge mining Bitcoin HD, and now it is possibly holding critical infrastructure hostage and dumping all of the BURST that was earmarked for development. Further, the PoCC is leaving the Burstcoin community with a messy situation in which Bitcoin HD’s team may attack the Burstcoin blockchain.

Hope For A Future Without The PoCC

An anonymous Burstcoin cypherpunk said, “Burstcoin was good without the PoCC and will survive with or without them. Anyone interested in working on BURST should reach out to the community and try to get involved in some of the work. Burstcoin is not dead. Burstcoin was around 3 years before the PoCC, it was around for 1 year with the PoCC. The PoCC did some stuff but not everything. There’s a lot of broken stuff the PoCC has not released. There’s a lot of stuff that isn’t finished, numerous things that they got people excited about but did not deliver. They walked away. Burstcoin will live, it just will not live in the way the PoCC wants. The development now must become community driven rather than PoCC driven”.

Indeed, Burstcoin (BURST) is the king of Proof of Capacity (PoC), a unique mining algorithm that is highly energy efficient, making BURST profitable to mine on any personal computer, versus Proof of Work which is not profitable unless Application-Specific Integrated Circuits (ASICs) are used.

In the long run, Burstcoin (BURST) will likely be quite successful since it’s one of the only unique cryptocurrencies. Further, BURST has an expansive community full of cypherpunks, and the community is quite capable of continuing development.