What is the Bitcoin Foundation, and What Does it Do?

Founded in late 2012, the Bitcoin Foundation is one of the oldest and most vocal non-profit organizations advocating for the development and use of bitcoin (BTC) in the mainstream financial world. According to the Foundation’s website, the organization “coordinates the efforts of the members of the bitcoin community, helping to create awareness of the benefits of bitcoin, how to use it and its related technology requirements, for technologists, regulators, the media and everyone else globally.” The foundation maintains as its vision the idea that “bitcoin will be a globally accepted method of exchanging and storing value which will operate without the need for third parties.” Per these statements, it seems clear that the Foundation is a lobbying or advocacy group working on behalf of digital currencies in general and for bitcoin specifically. Aside from generally supporting the development and spread of bitcoin and raising awareness, these statements leave a fair amount of ambiguity as to what specific aims and projects the Bitcoin Foundation has taken and will take on. Below, we’ll explore the creation of the Bitcoin Foundation, some of the projects and tasks it has undertaken, and some of the major players involved over the years, as well as ways in which the Foundation can be seen as controversial.

Creation of the Bitcoin Foundation

According to a report by the New Yorker, the Bitcoin Foundation was modeled on the Linux Foundation and receives most of its funding through grants provided by companies which make use of bitcoin and related technologies. The Foundation began with a small group of original members, including bitcoin pioneers Gavin Andresen, Charlie Shrem, Mark Karpeles, Peter Vessenes, Roger Ver, Patrick Murck and Mehul Puri. The Foundation grew quickly, and soon it divided its board members across three different categories: Founding Members, Individual Members, and Industry Members. As of this writing, the Executive Director of the Foundation is Llew Claasen, a digital marketing and product management expert. Other members of the board include Brock Pierce, Bobby Lee, Bruce Fenton, Elizabeth McCauley, Michael Perklin, Francois Pouliot and Vinny Lingham. The members of the board are elected from members of the three membership categories indicated above.

Membership in the Foundation on a general level is available to interested bitcoin enthusiasts with the payment of a small monthly or annual fee; the payment can be made via traditional credit card as well as in bitcoin. According to the Foundation website, individual members receive a variety of benefits, including participation in planning processes for advocacy and training projects, gaining access to discounts and special offers at partner events and on bitcoin-related products, accessing a special members-only Telegram group and newsletter, receiving members-only financial and operational reports from the Foundation’s Executive Director, and more.

Why Create the Foundation?

Hints as to why the founding members created the Bitcoin Foundation can be discovered in the organization’s manifesto. Per this document, the founding members believed that fiat currency was a poor long-term store of value, particularly because of the elimination of the gold standard. They also held that inflation, traditional financial services, and electronic payment processing were limiting factors in regards to resources, people living in poverty around the world, and more. The manifesto also suggests a number of central beliefs which the founding members held as rights available to every human; these include the “right to privacy in transactions that involve no harm to others,” “the right to keep your savings…anywhere in the world,” and similar economic freedoms.

As a result of these beliefs, the Foundation was created in support of six core values: privacy, guaranteed financial access, decentralization, autonomy, stable money supplies, and financial inclusion.

Activities and Projects

Aside from giving voice to individuals and communities which support bitcoin as a store of value and bitcoin-based projects more generally, the Bitcoin Foundation has engaged in numerous campaigns, outreach programs, and events in order to further its mission and values. The Foundation’s website suggests that “someone needs to speak with governments, regulators, financial institutions, technologists, the media and everyone else all over the world to protect bitcoin” and in order to advocate for the safe and legal conversion of fiat currency into bitcoin and vice versa, the use of bitcoin as a medium of exchange, and the use of bitcoin as a store of value. The Foundation states that it adopts that responsibility as an organization.

In pursuit of these aims, the Foundation has engaged in political lobbying, the organization of conferences and related events, the administration of research grants, the support of bitcoin protocol development and training programs, and general projects to raise awareness. The Foundation details its project priorities as related to different geographical areas in a strategy document available on the organization website. The organization also sponsors speakers at non-Foundation conferences and events through a project known as the “Bitcoin Speakers Bureau.”

Criticism and Controversy

Like most organizations affiliated in some way with digital currencies, the Bitcoin Foundation has experienced its share of criticism and controversy since its founding in 2012. In some cases, this has had to do with the individuals associated with the Foundation. For example, bitcoin pioneer Charlie Shrem was a founding member of the project and a vice-chairman of the Foundation. However, he pleaded guilty to aiding and abetting the operation of an unlicensed money-transmitting business as part of his affiliation with the Silk Road marketplace, eventually spending time in prison. Similarly, detractors have leveled criticism at former board member Mark Karpeles, who was the CEO of the Mt. Gox bitcoin exchange before it collapsed, over his relationship with Peter Vessenes. When Brock Pierce, a former child actor, was elected to the board of directors, certain individuals within the Foundation membership reacted negatively, in some cases choosing to disaffiliate from the Foundation.

As an organization, the Bitcoin Foundation has explored different strategies and overarching goals, with some members and outside analysts feeling strongly that the Foundation should aim in one direction or another. In late 2014, for example, the Foundation announced plans to reduce or eliminate its education initiatives in favor of support for core development of bitcoin projects. In response, members of the bitcoin community were split, with some advocating for the continued pursuit of outreach and public policy initiatives, hile others wholeheartedly supported the Foundation’s decision to switch tactics. Crypto-anarchist Cody Wilson announced plans to run for a board seat on the Foundation in 2014, suggesting that he “will run on a platform of the complete dissolution of the Bitcoin Foundation.” Later, in mid-2015, board member Olivier Janssens alluded in public to the possibility of the Foundation’s near-term insolvency, which had previously been kept secret by the board. In the fallout from this statement, a number of the staff and leadership of the Foundation were terminated, including Janssens.

Going forward, it’s difficult to tell exactly what the future holds for the Bitcoin Foundation. While there will doubtless be many individuals within the cryptocurrency community that share the Foundation’s goals and values, the means and specific activities those individuals will adopt in order to further those goals remain unclear. Some of these projects may involve the Bitcoin Foundation, while others may take new forms, either with different, competing organizations or on an individual level.