Wikipedia's Uphill Battle for Bitcoin

Thursday 07 August 2014

As most bitcoin followers have probably seen, the Wikimedia Foundation — parent of Wikipedia, the world's most popular encyclopedia and the sixth most popular website across the globe — has finally started accepting bitcoin donations. This has been a desire of the bitcoin community for years now, and the wish was finally granted on the 30th of July when Wikimedia made a blog post announcing their acceptance of the cryptocurrency.

Wikimedia bitcoinFor those unfamiliar with Wikimedia's structure, the foundation is in charge of running a variety of online wikis, Wikipedia included. The foundation takes care of the backbone of these projects, such as running the servers, providing updates, and dealing with legalities. However, these projects are mostly sustained through independent volunteer efforts by everyday people worldwide. At times, the views of the editing community can conflict with the views of the foundation (a recent example being the implementation of Media Viewer, which has seen all sorts of discussion and debate across various Wikipedia forums). This unique environment lead to a very interesting mix of discussions between the bitcoin-community, Wikimedia volunteers, and employees of the Wikimedia Foundation itself. Let's jump into a look at the discussions and the shifting of views throughout the last few years.

The Founder Comments

Jimmy Wales, the co-founder of Wikipedia, currently serves on the board of trustees of the Wikimedia Foundation and regularly participates in public discussions on the English Wikipedia. One of the first instances of Wales providing input on bitcoin was back in 2012, when an editor approached Wales on his Wikipedia talk page and asked if bitcoin could be accepted in Wikipedia's yearly donation drive (you know, the one with giant banners that gets the internet riled up for a week). The discussion resulted in Wales providing a few key points to the idea of bitcoin donations. The first problem, Wales pointed out, was that adding additional payment options for donors can actually decrease revenue, "presumably by adding complexity and surprise to the checkout process." Another issue was the unanswered question of whether or not accepting bitcoin would be worth the monetary cost of implementing it. A couple of users replied by pointing out the quick and low-cost option of using BitPay, or simply placing a bitcoin address on the site's donation page. Ultimately, however, Wales made the note that he was not involved with the foundation's decisions for payment options, and that it would be a "a bit of an uphill battle" to persuade the Wikimedia Foundation to accept bitcoin.

The idea of accepting bitcoin remained at a standstill for two more years until discussions started up again at the beginning of 2014.

Internal Discussion

In January of 2014, an internal discussion between Wikimedia Foundation employees surfaced. Matthew Walker, a software engineer for Wikimedia, explained the limitations of accepting bitcoin donations. The most staggering point was Walker's statement that any new payment option is not even worth considering unless it is to net at least $500,000 (USD) for the foundation. The need for this type of money was justified by the costly requirement of coding, testing, maintenance, auditing, and other technicalities. Also noted, however, was that there had not yet been any formal analysis of the cryptocurrency from the foundation or the organization's legal department. Finally, Walker also noted a rather chilling comment about the attitude of the bitcoin community towards him and his team:

"The bitcoin community should be aware that their persistent and often times aggressive, rude, and vulgar messaging towards me and my fellow coworkers is not appreciated; nor does it help their cause."

Erik Möller, Vice President of Engineering and Product Development at the time, stated in a reply to Walker that he would rather the foundation not accept bitcoin donations. Möller's personal analysis was that bitcoin's fluctuating value made it a risky investment, something that the Wikimedia Foundation's "very competent financial managers already steer clear of...." Möller also mentioned his discouragement with bitcoin's tendency to be used as an investment tool, given its natural tendency to appreciate over time. Despite these negative views, Möller did state that a positive aspect of bitcoin would be "a renewed interest in peer-to-peer networks," which was compared to the file-sharing torrent network that happens to match Wikimedia's ideals of the free culture movement. Ultimately, however, Möller conceded his views to the foundation's fundraising team, stating that the decision to accept bitcoin should be based solely on the results of a cost and benefit analysis.

Katie Horn, the fundraising tech lead for the Wikimedia Foundation, provided her input shortly afterwards. Horn started off by referring to Walker's $500,000 figure, stating that the amount isn't based off of the cost of implementing bitcoin donations, but rather, the cost of devoting time and manpower to bitcoin that could otherwise be put to use in implementing other projects that would net greater results. Horn believed that other candidates for acceptable donation methods would net more money than bitcoin would, and until evidence would show otherwise, it would not be looked into. Even with easy integration methods of Coinbase, BitPay, or even just posting a bitcoin address, Horn also stated that there would still need to be extensive coding done for any new payment methods. From a technological standpoint, these included coding a new donation interface, a payment listener, and automated nightly auditing. Horn noted that any volunteer interest in helping develop the backend code for accepting bitcoin would be welcome to do so, though there was absolutely no guarantee that bitcoin would still be enabled.

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Jimmy Experiments

Wales made a notable appearance in the bitcoin scene again when on March 6, 2014, he made a simple tweet:

Wales's next tweet was his bitcoin address, and from there, it took off. Plenty of people started sending bitcoin Wales's way, whether it was to welcome Wales to the bitcoin community or to provide a donation to the Wikimedia Foundation. Wales had originally created his bitcoin address for personal use, but seeing the massive influx of bitcoins sent to his address, he decided to cash all the bitcoins into USD and donate it to the Wikimedia Foundation. In essence, Wales had accidentally provided a front for Wikimedia to accept bitcoin donations that netted positive results.
Soon after, Wales approached the bitcoin community on Reddit's bitcoin subreddit. Wales asked the community a few questions regarding technicalities behind bitcoin, and also his intention to reopen discussions with the Wikimedia Foundation's Board of Directors on bitcoin donations. Wales reiterated the point that additional payment options can actually hinder revenue, stating:

"The art and science of landing page design involves, as it turns out, lots of things that are counter-intuitive. But I think the main basic principle is that once someone has decided to donate, any complications of any kind causes a significant portion of them to bounce."

However, Wales also suggested that the foundation could simply post their address across their social media profiles, while avoiding placement on the donation page as a payment. In the end, the Reddit thread garnered over 3,000 votes, and resulted in plenty of healthy back-and-forth discussion between Wales and the bitcoin community.
The next month, on April 11th, Wales revealed that the Wikimedia staff had been looking into a "lightweight implementation" of bitcoin, while practicing caution in doing so. 

It seemed like the Wikimedia Foundation was getting closer to accepting bitcoin. The only question, then, was when?

Wikimedia Takes The Leap

Finally, on June 20, 2014, Wikimedia made the surprise announcement of accepting bitcoin for donations, thanks to both high demand and cleared up legalities. Regarding the legal side of things, Wikimedia attributed their confidence to guidance from the United States Internal Revenue Service with their reveal of their Virtual Currency Guidance article on March 25, 2014. With the growth of bitcoin over the years, along with a secured legal basis to stand on, Wikimedia's team members gained the confidence needed to accept bitcoin on the sixth most popular website in the world.
Volunteers having a say in the Wikimedia Foundation's daily activities made for a very unique and interesting discussion landscape between the community and official Wikimedia Foundation employees. Plenty of discussions were had, views expressed, and at some points, even heated debate occurred. What Wales described as an "uphill battle" back in 2012 was finally won this year, furthering the validity of bitcoin in today's world.

Kevin Payravi

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