Threats Fly As Fight Over Siacoin's Crypto Mining 'Kill Switch' Intensifies

Last week, developers including siacoin creator David Vorick floated changes that would keep some mining equipment operators from earning value by securing the distributed storage protocol.

Having amassed $22 million from siacoin users for the production of mining machines, the situation has now degraded into a tangle of legal threats and proposals to fork the blockchain.

A third-party developer that was previously responsible for the upkeep of siacoin-related websites and web tools, the pseudonymous "RBZL" recently quit his engagement with siacoin, stating that the controversy over Obelisk has effectively stalled the platform's development.

Making matters worse is that those behind the effort suggest any legal action against Obelisk could impact Nebulous, the startup entity the currently employs open-source developers for the siacoin protocol.

Another siacoin user named "Bloqtwits" also contacted CoinDesk, claiming to represent a group of claimants that had purchased Obelisk miners and are now seeking a class action lawsuit.

The sole development body behind siacoin, Nebulous is custody of what is called the "Siafunds," a slice of a siacoin smart contract that is built to incentivize siacoin development.

Speaking to CoinDesk, a siacoin trader named Ken Scott Bell estimated the fund nears $56 million, or did at one point over the course of 2018.

Bell said the proposal seeks to find a way to defend against the mounting legal pressure against Obelisk and Nebulous, which he sees as an attack on the siacoin network.

Published two weeks ago, the proposal argues that once the mining units are released, Obelisk should give Obelisk miners the run of the network for a three-month period, after which other miners would again be able to secure the protocol.

"If we are going to take proactive measures to curate our mining community, the goal is going to be to set up a healthy, decentralized, open mining ecosystem," Vorick told CoinDesk, "It therefore does not make sense to me that we would switch away and then switch back."