Bitcoin Foundation news

World latest news

The Bitcoin Foundation’s meteoric rise and subsequent collapse

Once one of the most influential organizations in crypto, the Bitcoin Foundation is now a husk of its former self. Here’s how the once all-encompassing organization fell from grace. From the ruins of Mt. Gox, an equally controversial organization is born Envisioned as a transparent organization whose aim was to fight for the Bitcoin cause, the Bitcoin Foundation was everything but transparent. The organization was founded by six members in July 2012, just as the crypto industry was recovering from the colossal Mt. Gox hack, according to research from BitMEX looking at the Foundation’s history. Board members of Bitcoin Foundation according to a 2013 snapshot were: Gavin Andresen, an early Bitcoin developer Chief Scientist Mark Karpeles, the CEO of MtGox Board Member Jon Matonis, monetary economist Board Member and Secretary Patrick Murck, a principal at Engage Legal General Counsel Charlie Shrem, the CEO of BitInstant Vice Chairman Peter Vessenes, the CEO of CoinLab Executive Director, Chairman of the Board, Treasurer All board members of the Foundation were founders, except Jon Matonis. Roger Ver was also a founder but was not a board member. The first piece of controversy around the organization happened from inception. The seventh founder listed Satoshi Nakamoto, the anonymous creator of Bitcoin. Equally unclear was the organization’s objective. According to its official website, the Bitcoin Foundation, dubbed “the Corporation,” claimed its goal was to promote and protect Bitcoin’s decentralized, distributed, and private nature. The Foundation’s objectives were further elaborated the following year, where it stated that its mission was to fund Bitcoin’s infrastructure and development team, which will make Bitcoin more trustworthy and useful. With that being said, the Foundation also cited promoting Bitcoin as one of its main purposes, positioning itself as a link between the growing crypto community and the disillusioned and misunderstanding general public, especially at a time when Bitcoin was painted solely as a tool for buying drugs and laundering money. The BitMEX report distilled the Foundation’s objectives and found that, in practice, its main roles were to financially support Bitcoin’s main developer, Gavin Andresen, arranging Bitcoin conferences, and promoting the new asset class to regulators. But, despite its secrecy, the Bitcoin Foundation quickly gained popularity, attracting dozens of corporate and lifetime members throughout 2012 and 2013. Some of the most notable names that have joined the foundation in that time included Brian Armstrong, the founder of Coinbase, Jesse Powell, the co-founder and CEO of Kraken Exchange, and Erik Voorhees, the founder of ShapeShift and Coinapult. Apart from the 84 lifetime members, the organization also had 317 anonymous members, as well as dozens of corporate ones, including Mt. Gox, Coinbase, Gyft, ZipBit, Mercado Bitcoin, and CoinLab. It is unclear whether these members realized how broken leadership was within the Foundation. With three separate classes of members—founders, individuals, and corporations—the Foundation was still solely governed by the Foundation board. Despite the fact that the board members were chosen ‘by-election,’ the Foundation’s governance structure gave too much power to its founders, effectively removing its members from any meaningful decision-making. The dubious reputations of the board members The omnipotent board had its first elections in 2013, where it selected the heads of the industry. But, the rather uneventful 2013 slowly made way for 2014, which brought several high-profiled scandals to light that seriously tarnished the Foundation’s reputation. Namely, the beginning of the year saw two holders of the founding industry seats—Charlie Shrem and Mark Karpeles—resign. On Jan. 26 2014, Shrem was arrested at JFK airport for unlicensed money transmitting and money laundering. Two days later, he resigned from his position at the Foundation. Related: Founder of Hacked Bitcoin Exchange Mt.Gox Mark Karpeles Sentenced to Over Two Years Less than a month later, Mark Karpeles, the CEO of Mt. Gox, resigned as well. Karpeles’s resignation came as news about Mt. Gox’s insolvency came to light, effectively tarnishing the reputation of the entire crypto industry. To fulfill the two empty seats, the board appointed Bobby Lee and Brock Pierce as replacements. However, this choice turned out to be even more controversial than Karpeles’s resignation. Pierce, a former child actor, still faced old accusations around the sexual exploitation of children during his acting career. Some members of the board reportedly said that that a more thorough vetting process should have been in place when appointing new seats and that Pierce shouldn’t have been appointed. Where did all the Bitcoin go? The controversy that surrounded Pierce’s appointment as a holder of an industry seat at the board couldn’t have come at a better time. With most members engaged in a bitter fight over the Foundation’s governance, hundreds of thousands of dollars of the organization’s Bitcoin holdings were being mismanaged. While the BitMEX research made it clear that it found no evidence indicating any of the Foundation’s members embezzled its funds, a hard look at the data shows some questionable expenditures. The Foundation saw significant losses between 2012 and 2014, despite paying salaries to just a handful of its founding and board members. According to the organization’s IRS-990 forms, the majority of the funds went to cover Gavin Andresen’s salary, which rose from $15,000 in 2012 to $147,917 in 2014. The organization’s total pay costs rose from a modest $29,000 in 2012, to a staggering $1.1 million in 2014. (Source: BitMEX Research) BitMEX data found that that the sharp increase in the Foundation’s spending in 2014 almost completely depleted its reserves. To make matters worse, the Foundation’s persistent and ceaseless inability to disclose its Bitcoin balance made tracking its increasing expenses almost impossible. At the end of each year, the Foundation disclosed the USD value of its Bitcoin holdings in its IRS-990 forms. The forms also contained both realized and unrealized Bitcoin gains. After carefully analyzing the disclosures, BitMEX found several worrying discrepancies in the Foundation’s real and published balances. (Source: BitMEX Research) In 2013, the Foundation disclosed an unrealized Bitcoin gain of $5.2 million. However, when taking into account the annual price movement and the calculated year-end balance, the unrealized gains were only $4.4 million. The following year, an unrealized Bitcoin loss of $2 million was disclosed. BitMEX’s calculations found the loss to be only $600,000. The same year, the Foundation disclosed Bitcoin sales proceeds of $569,728 for selling 4,200 BTC. As expected, the real amount was far, far greater than the one disclosed. Namely, even when assuming that all of the Foundation’s Bitcoin was sold at its lowest price, selling the 4,600 coins should have brought the proceeds to $1.2 million. (Source: BitMEX Research) With a difference of around $2.8 million between BitMEX’s research and the Foundation’s official disclosures, an important question arose—what happened to all that money? While BitMEX made it clear that its findings weren’t accusing the Foundation of embezzlement, both the data and the testimonies from board members showed that it wasn’t all that unlikely. In March 2014, a Foundation committee chairman voiced his concerns about the possibility of those funds being embezzled. Andreas Antonopoulos, a best-selling Bitcoin book author, seemed to grow increasingly frustrated with the organization, saying that the Foundation was the very definition of a failure of leadership. “You say they are funded. Where are those funds? Who controls those funds? When were they last audited? Are they actually solvent? Or have all of those funds disappeared into a big black hole?,” he said in the Let’s Talk Bitcoin podcast. He also referenced the scandals the Foundation’s board saw that same year, implying that it wasn’t all that unlikely that the funds have been stolen or embezzled. “Just remember who was in the leadership until recently, who is in the leadership today and what their track record of ethics has been and I would suggest that I would not be surprised at all if the Foundation implodes in a giant embezzlement problem sometime down the line or funds get stolen, within quotes or without quotes, or something like that.” As time went by, more and more members of the Foundation demanded answers. Journalist Ryan Selkis, who would later go on to create Messari Crypto, was another key member that began asking tough questions. During the 2014 conference in Amsterdam, Selkis asked the board of the Foundation to address the lack of transparency when it comes to money. Unsurprisingly, the board members weren’t too keen on answering the question. According to the official transcript from the meeting, the board said it was spending all of its resources on “making Bitcoin bigger.” Improving transparency was possible, board members said, but they were prioritizing their work on improving Bitcoin’s public perception. 2015 elections mark the end of the Bitcoin Foundation The 2015 February elections served as a breaking point for the Foundation. With issues of transparency and governance on the table, the elections had even more weight than usual. But, as predicted by Murphy’s law, everything that could go wrong did go wrong. After no candidate managed to secure 50 percent of the vote, the Foundation switched from the ‘Helios’ to the ‘Swarm’ voting system. The number of candidates was also arbitrarily reduced and the voter registration process was said to be almost unmanageable. After two of the newly appointed board members were voted out of the board while the mandates of the remaining members were expiring, the Foundation violated its by-laws and decided not to conduct any further board elections. That marked the beginning of the Foundation’s end, as it began distancing itself more and more from its members. The decay of its internal governance was only matched by the loss of respect from its members. BitMEX found that this was the time the Foundation lost any legitimacy it had left, rendering itself “obsolete.” While the Foundation still exists, it serves no real purpose. The elected terms of all of its board members and chairmen have long expired and most of its activity was taken on by other companies, some of them founded by its former members. “Bitcoin never needed a Foundation,” BitMEX said in its research, which couldn’t have been a better conclusion. The Bitcoin Foundation can be seen as a slow, long, and ultimately uncalled-for lesson about what happens when people attempt to unify and govern a decentralized, trustless system. The post The Bitcoin Foundation’s meteoric rise and subsequent collapse appeared first on CryptoSlate.

Bitcoin Foundation Co-Founder Interviewed an Indian Lawmaker on Crypto Regulations. Here’s How it Went

Charlie Shrem, an early Bitcoin adopter, entrepreneur, and educator, recently met with a member of the Indian Parliament to discuss India’s stand on crypto. Reportedly, Indian lawmakers have proposed a blanket ban on cryptocurrencies. However, the proposal has been met with much criticism from the 5 million crypto-enthusiasts in the country. Moreover, until now, the lawmakers in the country have largely avoided making official statements on the topic as well. Charlie Shrem has gotten in touch with Rajeev Chandrasekhar, a Member of the Upper House of the Indian Parliament and member of the Committee on Finance of India. He said that the meeting with the politician went “very well.” He tweeted, The Indian government and RBI is not interested in stifling the crypto industry. They have made some rough moves but are looking forward to working with industry groups now. Rajeev Chandrasekhar, Indian Member of Parliament and Financial Committee The Indian central bank, the RBI (Reserve Bank of India) has restricted the crypto business in India by prohibiting banking services to exchanges. Moreover, the authorities also have a negative view of them. Recently, Koinex, one of the largest platform in the country closed down citing excessive scrutiny. However, the recent G20 meeting laid down the guidelines for virtual assets service providers around the world. Hence, India as a member, can be expected to follow them as well. Moreover, India’s proposal for a ban could affect the country’s development adversely. Tim Draper, billionaire Venture Capitalist earlier noted that “it will set India back by 40 years’ if they go through with the ban. However, even that was met with criticism from the Indian political leaders. This is probably the first time Indian crypto-enthusiasts could be hearing positive views on crypto from a political leader. Charlie mentioned that MP Rajeev Chandrasekhar also “wants to get involved.” The entire podcast of the interview will be released on September 10th, 2019. With the RBI vs. Crypto case continues to dangle in the Supreme Court, crypto-enthusiasts in India will be eagerly looking to it. Do you think that India would regulate cryptocurrencies instead of banning it? Please share our views with us.  The post Bitcoin Foundation Co-Founder Interviewed an Indian Lawmaker on Crypto Regulations. Here’s How it Went appeared first on Coingape.

Crypto-news website faces lawsuit for allegedly using copyrighted photograph of Bitcoin Foundation’s Charlie Shrem

Photographer John Curtis Rice has filed a lawsuit against Cointelegraph, a popular cryptocurrency news website, for allegedly using a copyrighted photograph of Charlie Shrem, Founder of Bitcoin Foundation. Stephen Palley, a well-known lawyer in the cryptospace, was the first to break the news on social media and tweeted, New federal court lawsuit alleges Cointelegraph Media […] The post Crypto-news website faces lawsuit for allegedly using copyrighted photograph of Bitcoin Foundation’s Charlie Shrem appeared first on AMBCrypto.

Bitcoin Foundation Chairman Shares 2019 Cryptocurrency Forecast: dApps, STOs and Gaming

The last few years have seen a rapid development of new technologies, with cryptocurrencies and blockchain being right in the center of it. The industry is still quite experimental, but it also proves its ability to adapt, change, and focus on what is necessary. Meanwhile, it is also marked by a great diversity which allows […]
Bitcoin Exchange Guide

Tron [TRX] did a Great Job of Building Community and Attracting Developers: Bitcoin Foundation Chairman

Brock Pierce, Bitcoin Foundation’s Chairman and co-founder of the EOS Alliance praises Tron for its efforts that are “required for a blockchain to be successful,” while Tron achieved big numbers in terms of increased transactions, accounts, and Dapps. Tron Surpasses 200 Million in 38 Days after the First 100M Recently, Tron had its niTROn Summit 2019 where they made a lot of promises and claims to its community. Marcu Zhao, the head of the Tron public chain declared that Tron, “will listen to the community to achieve the decentralization of developing team and attract more developers to join us.” In the meantime, Tron made a lot of development as Tron enthusiast Misha Leaderman took to Twitter to share, “TRON has reached 6,000,000 Block Height. Two days after the hugely successful niTROn Summit, TRX has: surpassed 1,5 million accounts, 163 DApps at dapp review, outperformed all other top 10 coins, announced BitTorrent BTT Airdrop plan, and announced BitTorrent speed.” Blockchain and Fintech Analyst, Gordon also shared another milestone that Tron achieved in terms of 200 million transactions. “TRON just surpassed 200 Million Transactions. The first 100M took 173 days. The second 100M took just 38 days! That is 455.26% faster than the first 100M. Absolutely incredible! Congratulations to Justin Sun and the entire TRON Community.” Ethereum’s Scalability Issues & Tron’s “Great Job” While Tron is making a lot of noise in the crypto space, Brock Pierce, the current Chairman of the Bitcoin Foundation and co-founder of the EOS Alliance responded to “Thoughts on #TRON as a contender” with, “Tron has done a great job of building community and attracting developers. Those are two of the most important attributes required for a blockchain to be successful.” Peirce’s praise of Tron’s marketing efforts came after talked about Ethereum’s scalability issues in a recent chat with CryptoTrader Ran NeuNer, “If Ethereum does not solve the scaling this year then there will be a problem. The market is not going to wait for them to catch up, especially with all the generation 3 blockchains coming up. EOS is currently the number two chain in terms of developers with a lot of runway. It also helps in having the most advancement form of solving scalability issues.” Pierce also spoke about the fall of Mt. Gox and the effect it has now on the market, “The fall of Mt.Gox incurred massive reputation damage and the feeling that it propagated throughout the industry was crazy. People thought that since Mt.Gox got hacked, Bitcoin must be unsafe too. We need to create safer and better practices in the field.” Just like the majority of the crypto experts, Pierce believes this year is going to be about Buidl and though he stated that he “rarely make predictions,” he shares by the end of this year, “we will see apps built on the blockchain that will have a million users.” The post Tron [TRX] did a Great Job of Building Community and Attracting Developers: Bitcoin Foundation Chairman appeared first on Coingape.
More news sources

Bitcoin Foundation news by Finrazor


Hot news

Hot world news

High ETH Prices Are (Finally) Good For Ethereum

Things are looking pretty bullish for Ethereum (ETH). The Ether price has surged by over ten percent in the past couple of days, and crossed above the psychological $200 barrier earlier this afternoon. That could be a strong buy signal for technical traders, as Crypto Briefing analysts reported yesterday.   Source: CoinMarketCap How High ETH Prices Harm Ethereum But what does a high Ether price mean for the smart contract network? There’s an obvious benefit for speculators and miners. But past experience has shown that anyone seeking to build dApps or just use the network could be severely hampered when markets turn bullish. That’s because the higher ETH prices get, the more expensive it is to use the platform. Users have to pay for everything they do on the network, from smart contract computations to token transfers. Rising gas fees could push end-users onto cheaper alternatives, like EOS or TRON, which offer similar functionality with lower fees. At least, that’s the received wisdom, which so far seems to be supported by experience. And it’s still technically true today: when it comes to using the ETH network, the downsides of a high Ether price tend to outweigh the advantages. Does Expensive ETH Mean A Stronger Network? However, Ethereum is (eventually) transitioning towards a Proof-of-Stake consensus model, which will require a financial commitment in order to participate. Instead of mining blocks through proof-of-work, block-producing nodes will have to stake ETH tokens as collateral in order to validate the network. That could have a significant impact on Ether’s market dynamics. Stakeholders will risk losing their hodlings if they fail to maintain connected and up-to-date node software. An expensive ETH would provide a strong disincentive to malicious or careless actors on the network. “If the chain is going to be secure, then there are inherent benefits from having high-valued Ethereum,” explained Nic Carter, Partner at Castle Island Ventures, in an interview with Laura Shin. A high Ether price, he added, would also provide “high-powered collateral, for DeFi applications for instance.”  Carter also pointed out that most networks have become too preoccupied with one or two “glamour metrics,” which may burnish their credentials but do not represent credible advantages. EOS, for example, has focused solely on scalability at the expense of decentralization. One tradeoff of those high speeds is that EOS relies on a small group of validators, which could present a systemic risk if they decided to collude or otherwise abuse their privileged positions. Ethereum’s key advantage is that it is the only platform with a vibrant community, Carter added, which comes with an “organic groundswell of usage and development.” Because of that organic usage, investors may be attracted to hold ETH for the long-term. “I think we noticed a little bit of a recalibration where initially [Ether] was computational gas,” Carter went on to say. “More recently, certain high-profile Ethereans have been saying, ‘well actually Ethereum itself is money.'” A strong Ether price could still push people off the network, but the community has been exceptionally resilient to market volatility and rival platforms over the past two years. The burgeoning DeFi space, and the added security after transitioning to Proof-of-Stake, could make high prices a net positive for the Ethereum network. The post High ETH Prices Are (Finally) Good For Ethereum appeared first on Crypto Briefing.
By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.