The Bitcoin Foundation Is Crumbling from the Inside
A rogue board member wants to decentralize the Bitcoin Foundation.
Image: Flickr/BTC Keychain
Saying there's new drama in the world of Bitcoin is like saying rain is wet. In the case of the Bitcoin Foundation, a nonprofit group that funds the development of open source Bitcoin software, we might say that the rain has been particularly torrential this week.
Olivier Janssens, a Bitcoin Foundation board member, has gone rogue. On Saturday, Janssens posted on Reddit that the organization is "effectively bankrupt," has "fired" 90 percent of its staff, and is still trying to "control" Bitcoin by hiring developers to build and maintain Bitcoin Core, the original open source Bitcoin software designed by Satoshi Nakamoto.
According to Janssens, the foundation "has almost no money left" after failing to collect the donations it needed from its members last year to pay developers to work on Bitcoin Core. In a meeting meant to decide the foundation's financial future, the rest of the board struck down a motion to record the meeting and make it public, according to Janssens, hence why he felt he had to go public with the news.
"The truth is that they were not telling the members about the dire financial state for a while now," Janssens told Motherboard. "I think it's ethically wrong to raise funds while not putting all the facts on the table."
Janssens's proposed solution is to set up a special donation-based trust outside of the Bitcoin Foundation's financial control for Bitcoin Core development. This way, developers would "finally be liberated from any political influence," he said, and not be beholden to the wishes of the foundation. To start the decentralization process, Janssens has offered to bankroll a yearly salary for Core developers currently employed by the Bitcoin Foundation out of his own pocket.
"Everyone keeping tabs on the foundation knew it was in financial trouble"
Bitcoin Foundation Executive Director Patrick Murck said that Janssens is overstating the seriousness of the foundation's financial situation, and that his outburst is not exactly helping the foundation's admittedly shaky footing.
"The foundation is not bankrupt," Murck said. "At the same time, there are constraints coming for Core development that are structural. The funders didn't trust that the foundation board would not, essentially, blow itself up, and it seems they had reason to not trust that. They would give money, but not as much as we needed to support Bitcoin Core."
As for the claim that the foundation has fired most of its staff, "We haven't fired anybody," Murck said. "Zero. But people are leaving." According to Murck, the Bitcoin Foundation has been engaging in what he calls "staff reduction by attrition." As Murck describes it, as staff members have left the withering organization for greener pastures, they've simply not been replaced. So far, Murck said, this has cut down the foundation's ranks by about half.
On Sunday, Greg Egan, the Bitcoin Foundation's corporate counsel attorney, resigned, according to a tweet by Janssens. Egan did not respond to Motherboard's request for comment. Murck said he plans to leave the foundation in two weeks, citing staff reduction as well as both his commitment to the foundation and his failure to improve its financial position. "If we're going to be reducing staff," he said, "they'd better start with me."
Even if Janssens's claims regarding the Bitcoin Foundation's financial situation are overstated, his sentiment—that the Bitcoin Foundation is too centralized and secretive to develop Bitcoin Core technology—is shared by others in the cryptocurrency community.
Cody Wilson, the upstart who made his name advocating for 3D-printed guns, previously ran for a position on the Bitcoin Foundation board with the promise that he would use his power to disband the organization.
"Everyone keeping tabs on the foundation knew it was in financial trouble," Wilson told Motherboard. "Disbanding the foundation would have done more to help the libertarians in Bitcoin announce themselves than anything else. Now the decrepit organization has to slouch on to its inevitable end, with supposed libertarians hand-wringing about bad press and whether people will argue Bitcoin has died with it."
One the flip side, some in the Bitcoin community have questioned whether Janssens's plan is really a response to supposed "control" over Bitcoin Core, and if it would work to decentralize Bitcoin Core development.
Putting money in the hands of a private individual is not decentralizing anything
Jeff Garzik, one of the few long-time Bitcoin Core developers, described Janssens's claims as "conspiracy theories" on Twitter, and noted that private (some may say "centralized") organizations frequently develop open source software for their own ends to the benefit of the development community. For example, he wrote, IBM and Intel dedicate resources to working on Linux. "It is a huge mistake to create a single trust fund," he stated.
"In my mind, taking funding away from an organization with elected board members and into the hands of a private individual is not decentralizing anything," Murck said of Janssens's plan to start a trust fund.
The internal split in the Bitcoin Foundation ranks extends beyond Murck and Janssens's disagreement. When Motherboard reached out to Gavin Andresen, another long-time Core developer who is currently chief scientist for the Bitcoin Foundation, he was open to the idea of implementing Janssens's fund, although he did not comment on whether he would take Janssens's money or not.
"'That offer' is a partly-baked idea right now, there is no specific offer I could either accept or decline," Andresen told Motherboard in an email. "But I always encourage people to jump in and experiment and make things happen, and hope Olivier works out the details and manages to create something sustainable."
In the fight for the future of the Bitcoin Foundation—and, by extension, Bitcoin Core—the battle lines have been drawn. What happens next will be up to the Bitcoin Foundation board members, including Janssens. That is, if they can agree on anything.
CORRECTION: An earlier version of this article misspelled Olivier Jansens' surname in two instances. These inconsistencies have been corrected.