The Bitcoin Foundation’s bankruptcy could be a good thing

The Bitcoin Foundation may eventually go bankrupt. At least that’s what Olivier Janssens, who recently joined the foundation’s board of directors, says.

     Janssens informed the community on Reddit on December 15, 2015 that he had been forcibly removed from the Bitcoin Foundation board of directors. The former board member claimed that the board voted to remove him in response to his previous actions to force the foundation to draft a plan for raising additional funds from the community for development, and his tenure at the foundation ended with his last board meeting. In response to the board's decision to remove him, Janssens said, "I guess requiring a business plan before deciding to raise funds may represent bad intentions on my part."

     The resolution was initiated after the departure of Janssens, who was initially in favor of shutting down the foundation outright — though he didn’t actually suggest voting that way himself. Janssens said it came down to a very similar vote, “2 for (Jim and me) and 3 against. We were one vote away from shutting it down.”

     The remaining board members didn’t like the idea of ​​planning ahead of fundraising, probably because they were going broke and needed cash. According to Janssens, the main focus of the last board meeting was the organization’s severe lack of funds. Janssens claimed in a Reddit post that “the foundation only has a few bitcoins left. They have been running on a skeleton staff for the past six months, but even so, the currency has run out.”

     This revelation comes after the Bitcoin Foundation found itself at the center of a storm of community hatred in 2014, causing it to lose essentially all credibility. The organization spent the better part of half a year draining the Bitcoin community of money by engaging with politicians and supporting extremely unpopular regulations in the Bitcoin world. The most counterproductive action by the Bitcoin Foundation was their support for – or at least lack of resistance to – the hated New York BitLicense. While the Foundation assured the community that it would work closely with the New York Department of Financial Services to ensure that the BitLicense was not too restrictive, their efforts were superficial and underwhelming. At one point, the Bitcoin Foundation’s Marco Santori even advised global Bitcoin regulators:

We believe these BitLicense hearings continue the much-needed conversation between individual states and the federal government about how to streamline, standardize, and adequately protect the regulatory system that can continue to develop for the United States as a whole (and perhaps internationally).

     Thus, by the end of 2014, the Bitcoin Foundation found itself in a state of turmoil. This was a testament to the failure of their political efforts, as the BitLicense was pushed forward, ignoring the concerns of most of the community. Furthermore, as the price of Bitcoin collapsed, the small amount of currency they had left quickly lost value after their political misdeeds were exposed. Worst of all, the Bitcoin community – the very people they swore to represent – ​​hated them, and many even called for the Foundation to be dissolved.

     With empty pockets and a damaged reputation, the organization decided to make a big change. A new executive director took charge of the foundation, abandoned most of its political work, and moved toward funding core development and promoting education about Bitcoin. Community members more or less welcomed the change; some members praised the foundation for returning to its roots, while others were relieved that it would stop wasting community currency.

     These changes still saw the Foundation take a secondary role in the Bitcoin world in 2015, and the community shifted its enthusiasm. As we debated block size and impatiently waited for Bitcoin’s price to rise, the Foundation held a handful of small educational conferences and a series of “DevCore” workshops focused on developing Bitcoin Core.

     Janssens's Reddit statement is correct, the foundation really doesn't seem to be changing its ways. Even after facing the difficulties in 2014, the board still believed that they had enough influence to raise funds without a plan, hoping that the community would trust them to do what they should do. What's more, the board voted to remove Janssens just because he wanted to create a growth plan when they went out to raise funds.

Janssens succinctly outlines the situation that the foundation cannot remedy:

     The truth is, the Foundation is pretty much bankrupt. They are left with just their name and ego, and without a community that will support them, they have clearly fallen into disrepute over the past year. I have no information to give you about any of their actions since then.

     Bitcoin Foundation, we hope you enjoy your time in the spotlight. It’s safe to say that the community will not miss you.