This isn’t the first time the legitimacy of the Bitcoin Foundation‘s future has been in question, and it very well might not be the last.
Bloomberg reported on Wednesday (Dec. 30) that Bruce Fenton, the group’s executive director, shared some very blunt news about the foundation: “We need additional funds if we wish to retain employees,” he said at a board meeting on Dec. 15. What the numbers have revealed over a two-year period is the loss of $7 million. According to Bloomberg’s report, the financials, as of Nov. 30, show that the foundation has just over $12,000 worth of assets.
What’s been done to keep the Bitcoin Foundation afloat has been fundraising, lobbying, events and helping digital currency players evolve into the space. But now, Fenton reminded the group, it’s time for the foundation to rake in some cash and do so quickly.
Minutes from the board meeting that were recently released showed tension among the board as board member Jim Harper, a senior fellow at the think tank Cato Institute, questioned what the foundation was bringing to its members in terms of value. He went on to say: “Asking for money is just throwing money away.” Another board member questioned if the foundation could even be fixed.
In April, just days after a newly elected board member said that the Bitcoin Foundation is “effectively bankrupt,” the organization responded that it was not, but it was working from an austerity budget after the collapse in bitcoin’s price “drastically affected the foundation’s bottom line, as the majority of assets were held in bitcoin,” according to a foundation blog post from April 7.
The foundation was also downsizing its team at the time so remaining resources could be focused on “funding developers working on the Bitcoin Core Protocol,” the post said, adding that Executive Director Patrick Murck was voluntarily stepping down to take himself off the payroll and would serve as a volunteer. Those explanations came in the wake of a post on a Bitcoin Foundation forum on April 4 by newly elected board member Olivier Janssens, who said the foundation “has almost no money left and just fired 90 percent of its people” and that it can no longer afford to fund development of the Bitcoin Core Protocol. Janssens also recommended that the foundation’s members replace the entire board or shut the organization down.
“The foundation started a lot of ambitious projects at the end of 2013 and beginning of 2014,” Bitcoin Foundation Chief Scientist and former board member Gavin Andresen told IDG News. “Unfortunately, most of those projects never had a chance to show any results, because they had to be cut back or dropped, as funds dried up due to the combination of a falling bitcoin price and declining membership revenue.”
But as the Bitcoin Foundation struggles to stay afloat, the news in the bitcoin ecosystem probably demonstrates why. With its volatile price reputation hard to shake and an ever-changing value for a currency that’s not supported by the U.S. federal government, there’s plenty of bitcoin skeptics out there. The closure and bankruptcy of so many bitcoin exchanges, including the infamous Mt. Gox collapse, hasn’t helped its cause.
Andresen told Bloomberg in an email that he doesn’t know “if the foundation has a future.”
“It is very difficult to regain trust once trust has been lost, and the illegal behavior of two of the foundation’s former board members destroyed a lot of trust,” he wrote about the three-year-old organization that was initially created to bring awareness to the new financial technology in the market.
The December board meeting appeared to be close to the end of the Bitcoin Foundation, with some members voting to end the organization, according to Bloomberg’s report, but then, ironically, the foundation also added new board members who believe in its vision. Therefore, after all was said and done, the Bitcoin Foundation’s board voted to keep the organization running. This came after one board member was removed and another stepped down.
Bobby Lee, a Bitcoin Foundation board member, said in an email to Bloomberg that “despite the recent negativity about the Bitcoin Foundation, there are still many people who believe in the need for a global nonprofit platform that advocates for bitcoin.”
“The past 18 months were tough for bitcoin and its entire ecosystem; I did not give up on bitcoin then, and I will not give up on Bitcoin Foundation today,” his email continued.
Whether or not that’s a sustainable enough model for this organization to remain viable is still up for debate.