The Bitcoin Foundation is a group of industry insiders with the stated goals of funding Bitcoin infrastructure and promoting it to the public. This helped the Foundation to make over $350,000 from membership dues last year alone as multiple Bitcoin-related startups and paying members believe they’re helping to improve Bitcoin through the Foundation.
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 Bitcoin Foundation 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 organization’s web-site reads.
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.”
However, since its creation in 2012, the Bitcoin Foundation has attracted waves of criticism from community members over everything from lack of transparency and accountability, controversial appointments to the organization’s board, political split in the block size debates, and doing very little to actually fund the core Bitcoin infrastructure.
In an exclusive interview with ForkLog, Llew Claasen, Bitcoin Foundation’s executive director and a venture capitalist based in Cape Town, South Africa, responded to that criticism explaining the current state of affairs within the organization, its ongoing activities and future plans.
ForkLog: Mr Claasen, as the Foundation’s executive director, what will be your response to all the criticism the organization has received over the past few years?
Llew Claasen: First of all, I think it’s unfortunate that Bitcoin Foundation was drawn into acrimonious split that happened between people who were pro block size increase and people were anti block size increase. The Foundation itself has nothing do with this and ultimately it doesn’t control the protocol, doesn’t make protocol decisions, and doesn’t even advice on protocol. It’s just an advocacy platform for people to tell regulators, lawmakers, the media and average people in the street what this technology is about, why it is useful, why you should know about it and why you should understand more about your right to have money that is not under control of the government and some of the challenges with the current financial system. So I think this remains while we exist.
We are spending a lot of time continuing to engage with regulators, particularly that there’s a much closer regulatory focus. Also, particularly since Bitcoin only has about 30 percent dominance in the market now – that’s not a bad thing, what it means is that there are many more projects, a lot of people that contribute to the projects they feel their contributions are most valued – the Foundation is now representing their interest as well, representing the industry overall rather than only representing Bitcoin.
The reality is that most don’t even know there are other projects; they know there is Bitcoin and other cryptocurrencies. So I think the story doesn’t change. In terms of the challenges that we had in the not too distant past and the splits it was difficult for people from either camp to publicly support the Foundation because they would be trolled to no end by the other side, which is a really bad thing that happens in the industry but that is a reality.
So what happens is that we have switched to a fundraising model where we are reliant on members’ contributions and we’ve got awesome member participation. And the challenge that we do have is that we would love to accelerate some of those programs. We worked on a program at the beginning of this year which is significantly more aggressive in terms of the role that we want to play, and we were working with some big backers to try to get this program funded.
ForkLog: In the recent development of events the Bitcoin Foundation was also tightly involved into Bitlicense opposition movement. Are there any other notable initiatives the organization is taking part in?
Llew Claasen: Now we are focusing on a couple of other things. Number one is New York State and some stuff that is happening there, and specifically the BitLicense challenges, we are also working against some of the regulation proposal by the Uniform Law Commission at the state level, we are participating on working groups in South Africa and Uganda trying to influence what governments are trying to do to cryptocurrency there. We are also engaging with regulators and lawmakers in Zimbabwe and are doing some other things that are ultimately to the benefit of the whole community but we have no profit incentive, we are just trying to do something meaningful.
So that’s kind of where we are. We’d love to raise larger amounts of money for these programs and I think we are making progress, but we would’ve caught up in that mess.
ForkLog: Does Bitcoin Foundation provide any financial support to Bitcoin developers as of today?
Llew Claasen: No, not at this particular time.
ForkLog: What about yourself, being a venture investor how did you come to the crypto industry?
Llew Claasen: I was first exposed to Bitcoin in 2012 but I wasn’t involved very actively in the community until we saw something larger. I think it was around 2016 when things changed dramatically and there was this realization that if we are going to create something that would probably be more useful in failed economies we need to focus on developing markets. So with my background as an investor in technology startups, particularly fintech startups, we were looking at solving challenges in developing markets, it was very relevant to the Board and it was something we were looking at when Bruce Fenton decided to step down as an executive director.
ForkLog: On global level, what areas in crypto and fintech space are the most promising at the moment?
Llew Claasen: I cannot view blockchain technology as I’m sure everybody else does as well as a foundational layer. It’s not a business model in itself; it’s the thing that enables decentralized models. So a combination of blockchain with many other industries is very interesting to me.
Fintech specifically, there’s an example with Dala, the cryptocurrency that was issued in May. The problem that we tried to solve there was price stability since there’s a perception that in many developing markets they either don’t have control over price of their currency or that it is being dictated by more significant trading partners, or there’s abuse and oversupply of these currencies.
ForkLog: In your opinion, how strong will be Bitcoin’s influence in the future?
Llew Claasen: Bitcoin is something that will always play a very dominant role, but I think right now it is probably more useful to think of it as a reserve currency. It is possible some of that will change in the sense that we’ve got Lightning coming onboard and more and more of these technologies being implemented, but the challenge that we have is whether or not Bitcoin becomes of form of cash or remains a reserve currency. It all really revolves economic incentives, like if I have something that performs the function of a reserve currency, a store of value, then why would I spend it? And even if the technology problem is solved I’m not sure the economic problem will be solved. Nevertheless, even in its current form Bitcoin will provide a lot of value to the whole ecosystem.
ForkLog: A few months ago you predicted that by the end of 2018 Bitcoin will hit the $40,000 mark. With today’s overall decline on the markets, do you still stand by that opinion?
Llew Claasen: I don’t make price predictions anymore because they always go out of the context. In that particular case I made a prediction with a whole bunch of anchors “if this happens”, “if that happens”. And unfortunately the reason why it’s no longer responsible to do that is because people will see that as a reason to buy on a speculative basis rather than believe in the fundamental value of the technology and its decentralized nature.