Bitcoin Foundation to be Split in Half

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Following the issues raised over the weekend by one of the new Directors of the Bitcoin Foundation, Olivier Janssens. The Bitcoin Foundation, through Patrick Murck (Executive Director), has released their strategic proposal that was presented to the board earlier this year ( an assumption is that it was presented at the last Board meeting).

The Bitcoin Foundation – Strategic Proposal

Initially outlining the current situation, how at the close of January 2014 the Foundations treasury was at $5.2mm and in the following year, the close of January 2015, the Treasury stands at $463k.

Part of the reason for this difference is stated to have been due to the falling bitcoin prices. At the end of January 2014, the average value was $800-$900 (Bitstamp), compared to $250 at the same time in 2015.

Poor reputation and a decline in membership are also stated as part of the reason the Treasury has sunk so low.

In spite of this we have made significant progress in turning around the financial situation with consistent month/month revenue growth and declines in operating loss.

The proposal describes March (just gone) as possibly the first cash-flow positive month the Foundation has had since its earliest days.

bitcoin foundation

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treasuryThe strategic proposal also shows a summary of expenses from the beginning of 2015 and the forecast of operating expenses. And the challenges and opportunity that lies ahead.

With descriptions of the current situation faced from the IRS;

The IRS has indicated that our 501(c)6 status may be in jeopardy if we are directly funding software development and advancing a specific product (Bitcoin Core). We can transition to a 501(c)4 without penalty if focus is purely promotion, education and community development.

New proposals are made to enable the Foundation to continue to support Core Development and pursue promotional elements, such as education and outreach.

The proposal for the new Company for Core Development would target fundraising of $2 million that would be led by Patrick Murck and Gavin Andresen. It would be structured to support developers, taking into account their time and effort contributed. It would continue to support DevCore and other related promotional and community efforts, and it would lead standards efforts.

Summary

Concluding with a summary of moving the Foundation from a ‘Linux’ model to a ‘Mozilla’ model. Continuing to hold DevCore’s and other new conferences, and creating NewCo (a new company dedicated to core development).

However, the proposal ends with the stating that due to limited funding left such restructuring would need time.

What do you think should happen next? If you are a Bitcoin Foundation member you can leave your comment on their forums here, otherwise leave your comment below.

The Facts About the Bitcoin Foundation.

Contesting, or confirming, depending how you look at it, what is now in the public eye. The Bitcoin Foundation Board of Directors have released a newsletter (email) which can be viewed in full here.

  1. The Foundation is not bankrupt.
  2. The Foundation did not fire 90% of its people.
  3. Donors expressed concerns over corporate governance structure.
  4. Patrick Murck, the Executive Director, volunteered to step off payroll.

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