Bitcoin developer wants to hard fork the network — and give away Satoshi coins

A polemic is about to erupt on Bitcoin.

That’s because long-time developer Paul Sztorc just announced that he is planning an August hard fork under the name eCash. Even though Bitcoin has lived through its share of hard forks already, this one is different. Embedded in the proposal is Sztorc's intention to reassign up to half of Satoshi Nakamoto’s purported 1.1 million Bitcoin stash. That amounts to nearly $40 billion at current prices.

Why? To fund development on the new blockchain.

“This will no doubt be a controversial decision,” Sztorc wrote on X on April 24. “But I think it is necessary, and in fact, ideal.”

Sztorc’s solution is unprecedented and it breaks one of Bitcoin’s most sacred rules — respect Satoshi’s original distribution of coins no matter how long ago they moved. Indeed, never before has a Bitcoin hard fork dared to touch Satoshi’s stack. Not BitcoinSV, not BitcoinCash, not Bitcoin Gold.

But Sztorc says he has no choice. Hard forks face an impossible funding problem which is how to build infrastructure before launch when there’s no revenue and no tokens to sell.

Paul Sztorc did not immediately reply to a request for comment from DL News. 

What is eCash?

Unlike BitcoinCash’s 2017 fork, which increased the block size, eCash will activate drivechains, Sztorc’s proposal for enabling scalable Layer 2 networks that Bitcoin core developers have refused to merge for years.

In short, drivechains are sidechains secured by Bitcoin miners that enable new features without changing Bitcoin's base layer. Their existence would bring the type of programmability that other blockchains enjoy onto Bitcoin.

Sztorc said that seven Layer 2 networks are already in development, including a privacy-focused chain similar to Zcash, a prediction market, a decentralised exchange, and a quantum-resistant chain.

Bitcoin holders will receive an equal amount of eCash coins in the fork. So if you hold 4.19 Bitcoin, you’ll get 4.19 eCash.

Accredited investors

On its own, reassigning Satoshi’s coins is a hard pill to swallow.

But there’s another layer to Sztorc’s idea that, if swallowed, will make it impossible to keep down. He plans to manually redistribute the coins to “high-quality investors (i.e., accredited).”

Bitcoin's origin story dates from 2009, when anyone with a computer could start mining. There was no presale, venture capital, nor insiders. Satoshi mined alongside everybody else with the same hardware, the same difficulty, and the same opportunity.

Sztorc's proposal flips that idea on its head, and brings to light some uncomfortable questions.

Who are the investors who will be granted preferential access to those coins? What is the deal structure? Over what time period will he reassign the coins? And what happens if investors start to sell those coins en masse?

Hard forking Bitcoin

When a blockchain hard forks, a new chain appears by copying the existing one. Users holding coins on the original chain automatically receive an equal amount on the new chain.

Hard forks tend to be controversial because they fragment the community, split liquidity, and force users to choose between competing visions of what a cryptocurrency should be.

Even so, Sztorc is attempting one. He has spent years pushing Bitcoin core developers to adopt Drivechain, but has had to face severe headwinds from maintainers who argue it introduces security risks.

So, frustrated by years of rejection, Sztorc is now forking Bitcoin to implement Drivechain himself.

“Back in 2017, the Bitcoin tech stack was strong, and expectations for Lightning were strong,” Sztorc wrote. “Today is the reverse.”

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.