Many of you might remember how I went a little off the rails last year with respect to the Bitcoin Foundation. I literally declared “war” on the organization publicly, and privately, I called out some of the most moneyed and influential supporters in the industry for failing to either oust the non-profit’s leadership or blow up the organization. In fact, I pushed so hard that I almost forced myself out of the industry, and spent most of the weekend at Bitcoin 2014 in Amsterdam (when I wasn’t collecting my “journalism” award, #humblebrag) apologizing to the people whose toes I had stepped on.
Fast forward a year, and the organization is limping into the abyss with probably no chance of recovery. As an industry, we’ll now have to inevitably bury one Foundation and quibble over how the next bitcoin core development research institute is structured, managed and funded. It would have been soooo much easier to have ripped the bandaid off last year. Ask yourselves: are the bitcoin core developers better off now because we failed to act at an opportune time last year? Did we postpone an ugly political overhaul, only to leave a vacuum surrounding the Bitcoin Core today?
It’s pretty frustrating.
Just don’t confuse this as an indictment of how the new leadership (since November) has performed. I think Patrick Murck and his team performed admirably in cutting costs, refocusing the organization and ramping up new smart and (gasp!) profitable initiatives like DevCore. Somehow though, they are getting thrown under the bus for problems they inherited. The level-headed proposal to split the Foundation in two was not only informed by donor feedback and fiscal realities, but it gave the organization the most realistic shot at emerging from the ashes of $4.5mm in year over year financial mismanagement.
Keep in mind, the old leadership pissed away millions of dollars in donor assets speculating on the price of bitcoin, which they never hedged or converted during the heady days of $1,000 BTC. And now, two new Bobby Big Wheel directors – who quite frankly couldn’t manage a lemonade stand – decide to sabotage the salvage efforts in the name of “transparency”.
It’s time to blow up the Bitcoin Foundation and form an entity that’s actually worthy of fostering the core protocol that butters this industry’s bread, and that’s worthy of counting some of the most brilliant technical minds in Bitcoin as its employees.
There was a time to push for substantive changes at the Foundation.
There was a time to push for transparency.
That time was last year.
The Foundation is dead. Long live the Core.
P.S. Just a stroll down memory lane…
Bitcoin 2014, Annual Members Meeting in Amsterdam, 1st question in the member Q&A:
Ryan Selkis: As many of you might know, I’ve been pretty critical of some of the policies and individuals associated with the Bitcoin Foundation. I did want to say that I think that the organization is generally positive and has done phenomenal work. I’m excited about the new board of directors and one comment before my question: I wanted to echo a private apology that I made with Jon for being overly critical in some of the events of early March and I wanted to just do that publicly.
That said, I think a lot of the issues that I’ve had with the foundation had to do with transparency; where you’re representing an industry that relies on a public blockchain which is radically transparent. Why do you think it’s all right then to just have a 990 that’s filed once a year instead of being “radically transparent” about sources and uses on an ongoing basis?
Jon Matonis: Okay, I’ll answer that first and then I’ll let others answer. The first part of the answer is that we’re a membership organization so we answer to and respond to our membership first and foremost. I’m not sure, you must be a member if you’re attending now here so that’s a positive.
Peter Vessenes: He’s probably an anonymous member, I imagine …
Ryan Selkis: I’m a lifetime member.
Jon Matonis: All right, thank you.
Thank you for the kind words as well. We don’t attempt to represent the community at large. That might be a secondary role that we’ve acquired but we set out to represent the industry and individual members. If we have the luxury of representing the entire community then we’re going to fulfill those duties as well. I don’t think that the rest of the community would agree with one statement though. We have 1,300 individual members and 200 industry members. That’s a very small part of the community. That comments that I’ve heard in this conference are why
don’t we have more individual members? Yes, there is a responsibility to the community but our first and primary responsibility is to the membership.
On the financial transparency side, I agree with you, because the world is moving too fast to just have annual report releases. There’s nothing that’s being hidden there so now that we have the resources, we could move to quarterly updates or something like that. It’s really just bandwidth and auditing. I’m not opposed to it.
https://app.box.com/s/1xbjbx9qiaua7xpyh94w
Events: “Bitcoin 2015” is happening this fall. Stay tuned.
Jobs, Jobs, Jobs
ConsenSys, New York (consensys.net)
Blockchain production studio building decentralized applications in the blockchain 2.0 space (mostly on Ethereum). These tools will be packaged into separate ventures that are individually funded and skinned for different business niches. We are hiring 5-15 students for a summer internship program where they will have access to our amazing team and have the opportunity to plug into numerous ongoing projects. (Since ConsenSys is itself a somewhat decentralized company, with personnel in various cities, remote working interns may be considered.)
-Please apply by sending an email to info@consensys.net with work samples, resume, and general interests in the space. If you include a proposal for a dApp, smart contract, or other useful tool you want to build, we may consider the development of that project.
Abra, San Francisco (VC-Backed)The 2.0 remittance app that just won the Launch Festival last week is looking for two senior engineering hires. (goabra.com) -iOS Dev Lead - Min 5 years development experience with at least 3 years on iPhone. Must understand location services, UI programming, and other core iOS servIces.-If you think you’re a good match or know someone who is, email contact@goabra.com. Grayscale Investments, New York (a DCG Company)
The manager of the Bitcoin Investment trust, the first publicly traded bitcoin investment vehicle, is making two non-engineering hires. (grayscale.co)-Account Manager - Min 3 years of demonstrated sales-driven success within the financial industry, preferably in an investor development or capital raising role; Series 7 and 63 licenses certifications. More info here. -Marketing Manager - Min 4 years of demonstrated success in product marketing, preferably in the financial space; looking for candidates with experience marketing either public or private investment products and/or marketing for asset management businesses. More info here.
Bolt, San Francisco (VC-backed)
The stealth startup focused on consumer applications of Bitcoin is making a number of engineering hires including Security Engineer, Ruby Engineer, and UI/UX Designer.
-Check out Bolt (bolt.com) and email jobs@bolt.com.
Elliptic, London (VC-backed)
-The full-service bitcoin custodian is also making a number of key hires including data scientists and front-end developers.
-Learn more and apply at elliptic.workable.com
Today’s Tid Bits
Big Investor Involvement Could Boost Bitcoin
http://www.wsj.com/articles/big-investor-involvement-could-boost-bitcoin-1428259814
As more investors enter the market and financial-services firms use bitcoin to streamline transactions, some prop traders are testing the waters for a bigger move in to bitcoin. DRW Holdings LLC, Citadel Securities LLC, and KCG Holdings all popular trading firms, have displayed interest in trading the digital currency. Most investors and traders are waiting for a stronger trading infrastructure and regulatory certainty before getting involved. More involvement will help reduce volatility in the bitcoin market and lead to legitimacy.
BNY Mellon Explores Bitcoin’s Potential
http://blogs.wsj.com/cio/2015/04/05/bny-mellon-explores-bitcoins-potential/
Suresh Kumar, the CIO of the Bank of New York Mellon Corp., is experimenting with bitcoin’s underlying blockchain technology in an attempt to make financial transactions more efficient. BNY Mellon will test bitcoins, known internally as BK Coins, as incentives for the company’s new corporate recognition program. The announcement was made at the bank’s innovation center on Wednesday.
The Former CIO of Nike is Joining a Bitcoin Startup
http://fortune.com/2015/04/06/nike-cio-bitcoin/
Anothy Watson, the former 10 month CIO of Nike who left the company in December, is joining Bitreserve as its president and COO. The bitcoin company allows users to transfer deposits of bitcoin into other currencies and allows customers to send and receive money where in the world for very low fees. The Los Angeles based company has $14.6 million in funding and 35 employees at five offices.
Bitcoin and Market Crashes
http://www.bloombergview.com/articles/2015-04-06/bitcoin-and-market-crashes
Jonathan Donier and Jean-Philippe Bouchaud, a pair of physicists working at Paris-based hedge fund, Capital Fund Management, are attempting to predict market crashes by analyzing the bitcoin market. Donier and Bouchaud found that the market is prone to crash when buy orders are scarce, and estimated how much a typical-size sell order should move the price. Using this method, the two were able to predict the size of the biggest 14 single-day drops in bitcoin value in early 2013. The two are hoping to carry this predictive ability to other markets, which will be much more difficult, since traders post and cancel orders much more frequently.
Bitcoin Marketplace Buttercoin Folds Despite $1.3 Million Investment
http://www.coindesk.com/bitcoin-marketplace-buttercoin-folds-despite-1-3-million-investment/
Buttercoin, a US bitcoin marketplace, is shutting down its doors, despite launching with a $1.3m in investor backing just four moths ago. The service will officially go offline Friday, April 10th at 11pm PST. The company shut down due to lack of VC interest. Customers will be advised to move their bitcoin by Friday, and any funds that remain will be converted into dollars and sent to the bank address linked to each account.
Bitcoin Foundation Divided Over Controversial Restructuring Proposal
http://www.coindesk.com/bitcoin-foundation-funds-board-divided/
The Bitcoin Foundation may no longer be able to finance bitcoin’s core development due the Foundation’s lack of finances. This has caused a split with some believing that the Foundation should pivot to becoming a more general interest and advocacy group. According to CoinDesk, the Bitcoin Foundation envisions itself splitting into two separate entities, one with supporting bitcoin’s core development and the other promoting bitcoin more broadly.
Buttonwood SF Founder Petitions California’s Proposed Bitcoin Bill
http://www.coindesk.com/buttonwood-sf-california-bitcoin-bill/
John Light, the founder of Buttonwood SF has started an online petition against California’s virtual currency bill, known as AB-1326 that would prohibit virtual currency businesses from operating unless they are licensed by the Department of Business Oversight or have received an exemption from the agency. Light started the petition once he realized that the bill would criminalize the cryptocurrency trading that takes place at his bitcoin meetup.
Board Member Olivier Janssens Leaks Damning Facts About the Bitcoin Foundation
https://www.cryptocoinsnews.com/board-member-olivier-janssens-leaks-damning-facts-bitcoin-foundation/
Olivier Janssens, newly elected member of the Bitcoin Foundation’s Board of Directors, took to Reddit to divulge some controversial facts about the organization. Janssens claimed that transparency is not a priority, that the Foundation is broke and “just fired 90% of its people,” that intimidation tactics are regularly used to suppress leaks, and that the Foundation’s leading developer, Gavin Andresen, is pessimistic about the Foundation’s future.
BitQuick Bids to Capture US Cash-to-Bitcoin Market
http://www.coindesk.com/bitquick-us-cash-bitcoin-market/
BitQuick, a peer-to-peer cash for bitcoin startup, is aiming to serve the underbanked market while positioning itself as a more secure and convenient option in the US. The service works as sellers list their prices on the marketplace, find a matching buyer, place bitcoin into a multi-signature escrow wallet, then the buyer deposits cash in to a local bank and the the bitcoin is released, completing the transaction.
$1 Million Legal Fight Ensnares Ripple, Bitstamp and Jed McCaleb
http://www.coindesk.com/bitstamp-court-1-million-dispute-ripple-jed-mccaleb/
Bitstamp, the popular bitcoin exchange that operates a Ripple gateway, has initiated legal action over more than $1m in disputed funds related to the sale of nearly 100m XRP last month. The $1,038,172 in disputed funds were used by Ripple Labs to purchase 96,342,361.6 XRP put up for sale through an account allegedly controlled by Jed McCaleb, the founder of both Ripple Labs and Stellar. The dispute represents McCaleb’s latest battle with Ripple Labs, the company he co-founded then later left to create Stellar. Ripple Labs is actively seeking to have the funds transferred back to its account, but the funds are currently in control of Bitstamp.
Bitcoin API Startup Gem Raises Funding Total to $3.3 Million
http://www.coindesk.com/bitcoin-gem-raises-1-3m-launches-multi-sig-api-worldwide/
Gem, a California-based bitcoin API developer, has announced an additional $1.3m in funding, raising its total to $3.3m. The newly acquired funds will be used to accelerate feature development and scale Gem’s services for developers worldwide. KEC Ventures led the investment. Gem also recently launched its multi-signature wallet API, which is now publicly available.
Federal Agents Arrest Bitcoin Gun Buyer in Sting Operation
http://www.coindesk.com/federal-agents-arrest-boston-bitcoin-gun-buyer-in-sting-operation/
Yesterday, a man from Hyannis, Massachusetts was charged and arrested after attempting to buy a .380 caliber pistol and a silencer, worth $2500, from a darknet website using bitcoin. Justin Moreira was arrested after he picked up the package with the weapon in it, sent by an undercover federal agent, from a local post office. Moreira, a convicted felon, now faces a maximum sentence of 10 years and a $250,000 fine.
GAWminers’ CEO Garza Rebrands PayBase to Mineral, Moves Operation Abroad
http://cointelegraph.com/news/113866/gawminers-ceo-garza-rebrands-paybase-to-mineral-moves-operation-abroad
Josh Garza, embattled CEO of GAWMiners and Paybase, has helped launch a new wallet and exchange service, Mineral, while relocating operations to Hong Kong. The move will frustrate PayCoin users still waiting for reimbursement following the promised $20 price floor. The Mineral platform is based on the Coin-Swap exchange code base that Garza recently purchased.
UBS to Open Blockchain Research Lab in London
http://blogs.wsj.com/digits/2015/04/02/ubs-to-open-blockchain-research-lab-in-london/
UBS is opening a technology lab in an accelerator space in London called Level39, to explore how blockchain technology can be used in financial services. UBS hopes its space will help solve industry wide issues such as the need to manage and analyze massive amounts of data. The move was also made in an attempt to get more involved with London’s fintech crowd and open up to external innovation. Barclays, Lloyds Banking Group, HSBC, Santander, and BBVA are all also involved in investing or hosting in fintech companies.
Russia’s Bitcoin Ban Expected in August; Expert Recommends Businesses ‘Get Out’
http://cointelegraph.com/news/113857/russias-bitcoin-ban-expected-in-august-expert-recommends-businesses-get-out
With the Bitcoin Conference Russia currently underway in Moscow, more details about the proposal to ban cryptocurrencies in Russia have emerged with many expecting the ban to officially pass in August of this year. Artem Tolkachev, a crypto-legal expert, recommends businesses “get out of Russian jurisdiction.” The distribution of bitcoins or other cryptocurrencies is expected to incur a penalty from 5,000 to 20,000 thousand rubles for individuals.
Coinbase Seeks 'Invasive’ Details on US Bitcoin Mining Operations
http://www.coindesk.com/coinbase-seeks-details-us-bitcoin-mining/
Coinbase’s compliance office is seeking to acquire operational information from bitcoin mining companies, which some firms are viewing as intrusive. MegaBigPower (MBP) and Bitman report that Coinbase has requested for time-stamped photographs and videos of mining facilities and details about the origin of the hardware the companies operate. Dave Carlson, owner of MBP, described most of the information they were requesting as “competitively private” and suspected that Coinbase was facing pressure from regulators to gather such information, or seeking details for business purposes. Carlson also claimed that his firm has not used Coinbase in a significant capacity since last summer.
Bitcoin Advocates Back Petition for BitLicense Safe Harbor Provision
http://www.coindesk.com/bitcoin-petition-bitlicense-safe-harbor/
Submitted as a part of a recently closed public comment period, more than 70 digital currency industry businesses, executives and advocates are backing a petition that calls for the easing or eradication of allegedly onerous components of New York’s BitLicense proposal. Coinbase, Blockstream, BitPay, Circle and Ripple Labs have all supported the proposal. Overall, the petition seeks to exempt small entrepreneurs, security intermediaries, micropayments providers, and open-source protocols from the extraneous requirements of the BitLicense.
Factom Raises $140k in First Day of 'Software Sale’
http://www.coindesk.com/factom-raises-140k-in-first-day-of-software-sale/
Yesterday, the blockchain-based record-keeping network, Factom raised 579 BTC, or roughly $140,000, through the first day of its crowdsale offering 2,000 Factoid tokens for every 1 BTC pledged by prospective users. Factoids will serve as the payments method users will need to communicate with Factom’s users, which will be running on their own blockchain within Factom. The “early bird” period of the sale is scheduled to run through April 7th.
Brawker CEO Cyril Houri Departs in Management Shakeup
http://www.coindesk.com/brawker-ceo-cyril-houri-departs-in-management-shakeup/
Cyril Houri, CEO of the bitcoin buying service, Brawker has left following a management shakeup. The decentralized platform, which allows bitcoin users to buy “almost anything” online at a discount, is now operated by its two-person development team.
Bitcoin Won’t Sponsor 2015 St. Petersburg Bowl
http://sports.yahoo.com/blogs/ncaaf-dr-saturday/report–bitcoin-won-t-sponsor-2015-st–petersburg-bowl-121751682.html
The 2015 St. Petersburg Bowl will no longer have Bitcoin (via BitPay) as its title sponsor. BitPay had originally signed a three-year deal to have Bitcoin be the title sponsor of the game, but this has fallen through
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