Bitcoin Foundation: broken beyond repair?

Monday 13 April 2015

Whichever way you look at it, The Bitcoin Foundation is in trouble. Running short of cash and short of devs as the best case scenario, bankrupt and dysfunctional to the core as the worst. What’s going on, and is it a problem?

The Bitcoin Foundation exists to ‘standardize, protect and promote the use of Bitcoin cryptographic money for the benefit of users worldwide.’ It was created in September 2012 and, 30 months later, is apparently circling the drain due to financial and management issues.

Bitcoin is a decentralised currency. This is worth stating again because it is so important. It is a decentralised currency. Its purpose - its only purpose, in fact - is to solve or address the problems and injustices inherent in the centralisation of money and the structures surrounding it.

Thus the centralisation represented in the Bitcoin Foundation - or any other cryptocurrency organisation, be it an exchange, a not-for-profit that implicitly or explicitly claims to represent bitcoin, or anything else - can be seen as an immeasurable irony. When those organisations fail, we see why. As cryptocurrency advocates and enthusiasts, we can afford to be dogmatic about decentralisation. It’s not just a big deal: it is the deal. Without it, there’s no point.


Bitcoin Foundation: circling the drain or just a bad patch?

‘Effectively bankrupt’

On April 4, Olivier Janssens, a recently-elected member of the Bitcoin Foundation’s board, uploaded a post to the Bitcoin Foundation’s own website. In it, he describes in less than complimentary terms some of the issues that the organisation has been experiencing. ‘I was elected on a platform of transparency and decentralization of core development. Since the beginning, the Foundation has been sorely lacking any transparency of its actions. I can no longer in good conscience hide the truth on what I have witnessed in the Bitcoin Foundation since I was elected last month.’ The Foundation, he states, ‘is effectively bankrupt [as] a result of 2 years of ridiculous spending and poorly thought out decisions.’

Janssen, an entrepreneur and early bitcoin adopter, summarises his concerns in a list of bullet points:

  • The Foundation has almost no money left, and just fired 90% of its people. Some will stay on as volunteers.
  • Core dev can no longer be funded by it, and Patrick Murck is trying to re-create a new Foundation just for core dev, because the current name is tarnished. Do not fall for this.
  • The current Executive Director (Patrick Murck), will be gone in 2 weeks, and they are trying to find the next person to blame everything on.
  • [Board member] Jim Harper was threatened for doing a press release which was (barely) critical of the Foundation after he got elected. The Foundation tries to make sure we hide the truth by subtly threatening us on a regular basis.
  • If I get asked to leave the Foundation for telling the truth, so be it. The truth is being told.

He claims that the current board are ‘very bad at taking personal responsibility’, and that they had threatened him if he went public.

Response by the Bitcoin Foundation

There are sides to every story, and the Bitcoin Foundation provided theirs in a subsequent blog post titled The Facts about the Bitcoin Foundation. This provides a quick fisk of Janssens’ article, making the following points:

  • The Foundation is not bankrupt - though it has been severely affected by the fall in bitcoin’s price over the last year. Like so many governments, the board embarked on a pathway of austerity to address their shortfalls.
  • The Foundation did not fire 90% of its people. It ‘downsized’, and many people left voluntarily.
  • Donors had expressed concerns about the Foundation’s governance structure - specifically the existence of an elected board.
  • Patrick Murck left voluntarily.

Much of this boils down to semantics and points of view, a case of potato/potato (an expression that admittedly works better when spoken). We may never know exactly what happened in the smoke-filled rooms of the Bitcoin Foundation - but that’s precisely the point, here. The opacity and centralisation of the Foundation - which, like it or not, represents a focus for bitcoin advocacy and development - is absolutely and painfully at odds with the ideals of openness, transparency and decentralisation that are the values of the currency it seeks to promote.

Regardless of who was right and who was wrong, Janssens deserves the last word in this episode. ‘The lesson for all of us in Bitcoin,’ he concludes, ‘is to never put any trust in a centralized org again that wanted to represent Bitcoin or the Core Development of Bitcoin.’

Damn straight, brother.

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