Bitcoin Foundation Blew 4.6 Million USD in 10 Months

[tokeweed]

Bitcoin Foundation Blew $4.6 Million in 10 Months

The Bitcoin Foundation(TBF) Founding Director Jon Matonis explains the $4.6m loss in 2014. Funds were drained by exorbitant monthly expenses, conferences and the falling price of bitcoin. Today the ex-VISA employee advises Bitcoin entrepreneurs on funding.

The role of the organization that introduced lobbying to Bitcoin and attempted to meme-ify titles for Bitcoin developers remains ambiguous. Despite recent announcements purpotting a change in focus towards development, questions remain unanswered. Like, what happened to the 5800 bitcoin mentioned in their 2014 transparency documents?

Full article here...  https://www.cryptocoinsnews.com/bitcoin-foundation-blew-5800-btc-10-months/

[BitcoinEXpress]

For all the people that do not want to click through and follow the "Blog Spam"


~BCX~



BITCOIN FOUNDATION BLEW $4.6 MILLION IN 10 MONTHS
BITCOIN SERVICE, BITCOIN VALUE, NEWS01/07/2015BY ALEX GORALE

Bitcoin Foundation blew MatonisThe Bitcoin Foundation(TBF) Founding Director Jon Matonis explains the $4.6m loss in 2014. Funds were drained by exorbitant monthly expenses, conferences and the falling price of bitcoin. Today the ex-VISA employee advises Bitcoin entrepreneurs on funding.

The role of the organization that introduced lobbying to Bitcoin and attempted to meme-ify titles for Bitcoin developers remains ambiguous. Despite recent announcements purpotting a change in focus towards development, questions remain unanswered. Like, what happened to the 5800 bitcoin mentioned in their 2014 transparency documents?

 A lot of the funds that did not go towards funding core development actually went towards sponsoring annual conferences for the Bitcoin Community at near breakeven budgets. - Jon Matonis
Tax documents from 2013 show employee compensation, conference costs and legal fees as the largest expenditures. In all, The Bitcoin Foundation blew $150,000 monthly. Documents for 2014 have not been made available. However, Matonis was recently available for comment.

No Funny Business

Matonis provided an Ask Me Anything!(AMA) to ZapChain last week. The AMA is an opportunity for community members to question leaders in a public forum.

Jon answered many questions. He reminded us that currently TBF is undergoing re-alignment; defering questions about present goals to current leaderships. Though, he was able to share information on a Bitcoin Better Business Bureau - Cryptoagency. As well as give condolences to investors partnering with altcoins.

Also Read: Ripple Labs Fined $700,000 by FinCEN for Non-Compliance

He was also asked to specifically account for a statement he made during his tenure with The Bitcoin Foundation. Straight from the lines of TBF member meeting minutes.

Bitcoin Foundation Burn

"There is no funny business," assured Matonis. The price drop was the biggest factor affecting funds. Just as the majority of businesses operating in Bitcoin that year, the drop to $264 by the end of 2014 brought heavy losses.

Matonis outlined the following reasons attributed to why The Bitcoin Foundation blew through capital.

1) $4.6m based on March 2nd, 2014 valuation ~$673/BTC because books completed up until that time (of course, if you go back to December 2013, the BTC price was even higher);
2)  Average Bitcoin Foundation expenses for 2014 of approximately $150k per month;
3)  ~90% of assets maintained in BTC as determined by board of directors;
4)  Foundation raised in nominal terms approx. $500-650k in membership dues and donations during its existence (price appreciation got us to where we were at the time);
5)  January 1, 2015 exchange rate ~$264/BTC
6)  $0.6m (balance remaining at Bitcoin Foundation on January 1, 2015)
 
"Since my last day on the board of the foundation was December 31st, 2014, that is where my confidential access would terminate." - Matonis


No justification was given as to how the foundation would continue to operate under the $150,000 monthly costs even if the price of bitcoin never fell. A change that could have possibly delayed The Bitcoin Foundation's realignment by another ten months.

[QuestionAuthority]

I started questioning their money flow immediately and brought it up with Charlie here (as CornedBeefHash): https://bitcointalk.org/index.php?topic=113400.msg1230165#msg1230165

I never liked the idea of the foundation and never joined the foundation even when everyone else was all doe eyed over it. I always liked Charlie and told him in PM and publicly that there were too many things wrong with the concept of a centralized foundation representing a decentralized currency. Now they've wasted all the elitist money they swindled out of the doe eyed suckers on this forum. A new batch of suckers isn't likely to appear here again. Please, someone, perform a mercy killing shoot TBF in the head, and end this!

[jonald_fyookball]

if companies like blockstream can lead the way and somehow turn a profit while supporting core development, companies surely wouldn't need to support TBF on their backs.

[Kprawn]

" ex-VISA employee " That smells a bit fishy... Then again, maybe he saw the light. 

The Bitcoin Foundation should not have existed in the first place. Most of the previous threads on this matter, has highlighted that already.

The Bitcoin development team should have received their own funding and continued on their own. No need for secretaries with huge salaries. 

[LFC_Bitcoin]

" ex-VISA employee " That smells a bit fishy... Then again, maybe he saw the light. 

The Bitcoin Foundation should not have existed in the first place. Most of the previous threads on this matter, has highlighted that already.

The Bitcoin development team should have received their own funding and continued on their own. No need for secretaries with huge salaries. 

Totally agree with the bolded part, BTC is not a hedge fund or a huge corporation owned by anybody or any group of people. The whole thing stinks to be honest. Like you said the development team should have been given funds to continue on their own. I don't trust any of this so called BTC foundation.
Look no further than Mark Karpeles being a former member of the BTC foundation. I don't think I need to say any more.......

[The Bitcoin Co-op]

You guys should have given that money to us, instead. We turned Vancouver into a Mecca for Bitcoin for less than 100 times that amount. None of us had salaries, and we never flew around around the world to fancy conferences. $150K in a single month is clearly, obviously them using the money on personal luxuries.

Our founder paid for us to do this with the 1000 BTC he was smart enough to buy a long time ago, and he lives on a farm growing his own food. Half of us sleep on couches and live on ramen noodles. This debacle is insulting.

[HCLivess]

Money corrupts the meek

[siameze]

Props to BCX for the filtered version. Makes it so much better than actually having to visit ccnews.

[The Bitcoin Co-op]

Andrew was so incensed by this story that he decided to write an article about it. Check it out: The Bitcoin Foundation is an Insult and Needs to Die

One of the best things about decentralization is that it started as an underground movement; it was driven by the grassroots efforts of Internet subculture, which I’ve been contributing to since before I could ride a bicycle. With boots on the ground, guerilla marketing, and sheer dedication, Bitcoin was hammered into the public consciousness by Meet Ups groups, cooperatives, and non-profit organizations around the world.

Unfortunately, the Bitcoin Foundation is not one of those organizations.

I don’t say this as an ignorant third party or casual observer. After trying for at least two years, I managed to write for publications like Bitcoin Magazine, Coin Telegraph, and others–I’ve even traveled the world on Bitcoin business, having finally been recognized for my efforts. That’s how I know some powerful people will be upset by what I’m about to write, but as an anarchist, upsetting the powerful is pretty much my job.

Recently, there’s been discussion on ZapChain about the Bitcoin Foundation’s expenses. Astonishingly, that figure amounts to at least 5,800 BTC, which is roughly $4.6 million USD by their March 2014 evaluation, or $150,000 per month. When questioned about this, they’ll point out the fallen price of bitcoins, but the real story is one of bureaucratic waste and excess, the opposite of what Bitcoin stands for.

Almost none of that money was used to compensate Bitcoin developers, that being arguably their most important mission. Instead, the majority went to conferences. This may sound like a good initiative–and it could have been–but it isn’t, for several reasons.

Ostensibly, these conferences are promoting blockchain technology. The main problem with that assertion is that these conferences are expensive–they cost hundreds of dollars to attend, and even more to attend “in style.” They are, to be blunt, circle jerks, exclusive affairs designed to cater to an elite class of libertarian socialites.

Obviously, the masses are not going to be educated or persuaded by this. Probably, they’re not even aware of its existence. One could argue that they’re hoping to persuade government officials, but if so, they have demonstrably failed: countries as important as the United States of America enacted BitLicense, instead, a crushing regulatory requirement that will end many start-ups. The Canadian government has been accommodating, but they were primarily lobbied by the Bitcoin Alliance of Canada–not the Foundation.

In actuality, these conferences are designed to control the network of connections in our industry: the people who could hire you, partner with you, or invest in you will be there–probably plied to suggestibility by Bitcoin drinks–and you will not. The point is to profit off of access to opportunities, and in that, they’ve been wildly successful.

This may sound like a conspiracy theory, but cartels exist in crypto, and I have seen them. At least half of the major companies in our space are wrapped up in a complex network of allegiances that prevents true free market enterprise. Without naming any names (I’m an anarchist, but I do have editors), there are a few investors in Bitcoin’s largest corporations who are also invested in related news publications, and they use this to control the conversation. It’s obvious from the pattern in what press releases will be accepted or not accepted, and most of the culprits are Foundation affiliates.

The elite are notorious for such behavior, however, and I’ve never written about it, before. The reason you’re reading this–as indicated by abysmal public approval–is that the Foundation is also incompetent, “burning” (their words, not mine) cash at a rate which can only be described as luxurious.

The high price of admission is dwarfed by their callous disregard for efficiency. You might think conferences are necessarily an expensive affair, but as the founder of CoinFest, I know otherwise. Holding a convention simultaneously in over a dozen cities worldwide cost us less than $15,000, despite purposely limiting our resources to fiat-only venues and charging $0 for admission. We shopped smart, we knew how to make deals, and we never wasted time or money.

The biggest difference, however, is that we were volunteers, which the Foundation are not. The reason they have endless meetings and we don’t is that we don’t get paid to sit in meetings. When I hit the afterparty, I pay for my own drinks. I don’t travel to CoinFest events abroad because I would have to pay for it, and it’s entirely unnecessary–we communicate via the Internet, like all Bitcoiners did years ago.

It’s for my fellow Bitcoiners that I have to write this, not myself. Many advocates reading this will have a familiar story, sleeping on couches and living on ramen despite all of their hard work. If not for Adam Soltys–the founder of the Bitcoin Co-op, who bought 1,000 BTC early on but chooses to live a subsistence lifestyle of organic farming–I would never have made it to where I am now. I am truly grateful for that.

My story is rare, however, and most people won’t have an Adam. Instead, they will the Bitcoin Foundation, and that’s a damned shame.

[NUFCrichard]

Bitcoin Foundation Blew $4.6 Million in 10 Months

The Bitcoin Foundation(TBF) Founding Director Jon Matonis explains the $4.6m loss in 2014. Funds were drained by exorbitant monthly expenses, conferences and the falling price of bitcoin. Today the ex-VISA employee advises Bitcoin entrepreneurs on funding.

The role of the organization that introduced lobbying to Bitcoin and attempted to meme-ify titles for Bitcoin developers remains ambiguous. Despite recent announcements purpotting a change in focus towards development, questions remain unanswered. Like, what happened to the 5800 bitcoin mentioned in their 2014 transparency documents?

Full article here...  https://www.cryptocoinsnews.com/bitcoin-foundation-blew-5800-btc-10-months/

So basically people with access to other people's money were wasteful?
That doesn't really surprise me too much, generally people are selfish idiots as soon as they get the company credit card in their hands, seems like that is pretty much what happened here.

Falling price of BTC won't have helped either.

[LiteCoinGuy]

but it was one hell of a party!

[BillyBobZorton]

" ex-VISA employee " That smells a bit fishy... Then again, maybe he saw the light. 

The Bitcoin Foundation should not have existed in the first place. Most of the previous threads on this matter, has highlighted that already.

The Bitcoin development team should have received their own funding and continued on their own. No need for secretaries with huge salaries. 

Totally agree with the bolded part, BTC is not a hedge fund or a huge corporation owned by anybody or any group of people. The whole thing stinks to be honest. Like you said the development team should have been given funds to continue on their own. I don't trust any of this so called BTC foundation.
Look no further than Mark Karpeles being a former member of the BTC foundation. I don't think I need to say any more.......

True, there was even a cat of one of the members registered as an official member lol. But the thing is, without a some sort of official foundation, how can Bitcoin respond to goverment intentions to regularize it? when they ask for info, who should reply to them?

[jonald_fyookball]

Andrew was so incensed by this story that he decided to write an article about it. Check it out: The Bitcoin Foundation is an Insult and Needs to Die
 

So they're not even spending most of their money on development? shame.
but hey, if people keep supporting them, its their choice.  its a free market.

[LiteCoinGuy]

" ex-VISA employee " That smells a bit fishy... Then again, maybe he saw the light. 

The Bitcoin Foundation should not have existed in the first place. Most of the previous threads on this matter, has highlighted that already.

The Bitcoin development team should have received their own funding and continued on their own. No need for secretaries with huge salaries. 

Totally agree with the bolded part, BTC is not a hedge fund or a huge corporation owned by anybody or any group of people. The whole thing stinks to be honest. Like you said the development team should have been given funds to continue on their own. I don't trust any of this so called BTC foundation.
Look no further than Mark Karpeles being a former member of the BTC foundation. I don't think I need to say any more.......

True, there was even a cat of one of the members registered as an official member lol. But the thing is, without a some sort of official foundation, how can Bitcoin respond to goverment intentions to regularize it? when they ask for info, who should reply to them?

https://coincenter.org/

they can do that.

[The Bitcoin Co-op]

Andrew was so incensed by this story that he decided to write an article about it. Check it out: The Bitcoin Foundation is an Insult and Needs to Die
 

So they're not even spending most of their money on development? shame.
but hey, if people keep supporting them, its their choice.  its a free market.

The free market works on the principle that consumers know and get what they are paying for. That's not what happened, here--this was the organizational equivalent to snake oil, capitalizing on the foolishness of the masses.

[RodeoX]

Not that I'm defending their budget line by line, but I think there is a math problem with the title. They apparently are calculating the figure of 4.6 million USD by taking the bitcoins they spent at the highest price during that period. Of course that is not the price they were actually worth.

Kinda like the $10,000 pizza that has been reported frequently. In reality no one ever bought a $10,000 pizza, it's just that the coins went on to be worth that much. So if I bought a phone for 1BTC it would not be correct to say that "I blew $1000 on a phone!!!". Even though that bitcoin was once worth $1000. 

[RodeoX]

Kinda like the $10,000 pizza that has been reported frequently.

It was a 10,000 bitcoin pizza.

Oh, oops. Well a $2,560,400 dollar pizza then. Actually it may have been two pizzas. The value of BTC was $0.00250 so the pizzas cost about $25. Which is what two pizzas cost.