The Bitcoin Foundation is TOXIC and must dissolve, plus a call to action

[mikegogulski]

My apologies for the length of this post, but I believe that it sums up what is broken with the Foundation, shows it is essentially unfixable, and includes at the end a call to action to form a new, democratically-constituted umbrella organization for the advancement and defense of cryptocurrencies, Bitcoin first and foremost among them. I also believe you will find it valuable reading, if you're not already closely familiar with the matters at hand.

"Outgoing" Bitcoin Foundation Executive Director Peter Vessenes, aka "vess" here, @vessenes on Twitter, states in video from Bitcoin 2013 (https://www.youtube.com/watch?feature=player_embedded&v=I6jfPXFAToM) at 5:23 that the Foundation will be hiring a lawyer to lobby regulators in Washington DC:

https://twitter.com/mikegogulski/status/335820053926797312

As I wrote:

#BitcoinFoundation is DEAD TO ME. Lobbyists? Fuck you @Vessenes shyster sellout! Give my BTC 25 back! http://ow.ly/lai8e  #Bitcoin2013

Then:

Is that why you sold me http://app.bitlaundry.com/  @vessenes? So you could look squeaky clean while cozying up to politicians?#Bitcoin2013  (https://twitter.com/mikegogulski/status/335822417400324097)

And:

I got into #Bitcoin to improve this miserable planet and ESCAPE the iron grip of privileged moneyed interests, not JOIN THEM! #Bitcoin2013

And:

And @Vessenes sues @MtGox for $75m. Send the king's swordsmen! I need more money! #Bitcoin2013 #Bitcoin #betrayal #rat #statist #sellout

Plenty more follows in my tweet stream, and includes a conversation with Smári McCarthy of the International (formerly Icelandic) Modern Media Institute (http://www.immi.is/).

I provided more of my reasoning (after a nice barbiturates-and-vodka cocktail and a bit of sleep) on Google+, in comments on Declan McCullagh's article (http://news.cnet.com/8301-13578_3-57585151-38/winklevoss-twins-on-bitcoin-time-to-work-with-the-feds/) from today:

TL;DR: Sending Bitcoin to DC is like sending My Little Pony to the veterinarian.

+Jon Matonis Despite my rantings, for me it's not about purity either, but about the Foundation running off in a direction starkly counter to the motivations of a good many members, without any consultation at all. I believe I also heard +Peter Vessenes say, in that opening pitch, that there would be a Bitcoin Foundation members' meeting during the conference. I guess that means that I'll be getting an invitation with a teleconference number soon(?).

+Jerry Brito and +Declan McCullagh Yes, the exchanges are a vulnerable point, almost a "systempunkt" in John Robb's terminology, the resiliency of the underlying protocol aside. At the same time, it's already widely recognized that the best solutions to that sort of risk in the Bitcoin ecosystem involve peer-to-peer fiat/BTC exchange on the lines of #bitcoin-otc, localbitcoins.com and/or some kind of price discovery and exchange mechanism, with market actor reputation tracking, working in distributed fashion either in the BTC blockchain itself or as part of some kind of complementary system based roughly on the same principles. It's into those kinds of solutions that I'd like to see funding from whatever replaces the now toxic Bitcoin foundation and where I'd like to see the massive amounts of human energy that will otherwise be sucked into the interdimensional tentacle-monster maelstrom of KYC/AML/FinCEN/FATF/make-it-play-in-Peoria compliance (vendor AND customer side) spent.

As +Nick Weaver alludes to, Bitcoin really is fundamentally incompatible with the pharaonic pyramids of the legacy banking system, or, in my parting words from last night, sending Bitcoin to DC is like sending My Little Pony to the veterinarian. Even though we lot on this thread may share similar ideas about the ideal end state for Bitcoin, I think we all agree that the means to reach those ends are important as well. There is clear disagreement about what sorts of means are the most efficient in bringing us all to shiny happy crypto-ponycoin utopia, and that's fine. I'm asking folks to consider the entire picture very carefully, and especially not with America-centric blinders on.

I could go on to complain (but won't do so here, hehe) that the Bitcoin core dev team -- and, by extension, the Foundation which pays +Gavin Andresen -- are, in my opinion, spending a disproportionate amount of time/energy on work which primarily benefits a small number of mining pool operators (taken collectively, another systempunkt!) and on work which tends more and more to support centralized and institutionalized structures such as BitPay and BitInstant -- with all due respect to those teams -- and to toward the deprioritization of work support independent merchants and the actual peer-to-peer future. Perhaps this is simply a disagreement regarding how to sequence priorities, but I can't help but think it points to the same sort of issues I mention above, which actually turn out to be key ones as indicated by others.

+Jerry Brito "Allowed" is a hobgoblin. Bitcoin doesn't need permission from the existing state/corporate financial system. In fact, it presents an existential threat to both. Fine, though, send some "diplomats" out to spread confusion in the enemy's ranks.

And to +Jeffrey Tucker, it is indeed sad that freedom itself is simply unthinkable, where in a proper society it would be the reflexive, unconsidered default posture and where that society would react swiftly and forcefully to deviations from its principles. Alas, even with several thousand years of thought and experience to guide us, we have not yet collectively made the freedom posture the default.

(https://plus.google.com/u/1/112961607570158342254/posts/YLe37k7vonQ)

CLEARLY, Bitcoin no longer needs the Bitcoin Foundation as it's currently constituted, and it is probably too toxic to be salvaged in any form. The conflicts of interest among directors should make this perfectly clear. Plus, we now have Vessenes suing Karpeles over the MtGox/Coinlab deal while they are both on the same board. They both should have resigned immediately at the time the suit was filed and served.

Even worse, and utterly inexcusably, Peter Vessenes hired Patrick Murck as the Foundation's general counsel. This of course is the very same Patrick Murck who serves as Coinlab's General Counsel, and who is therefore Coinlab's top litigator in the suit against MtGox.

And, worse still, this is yet the same Patrick Murck who drew up the Coinlab/Bitcoinica/Bitcoin Consultancy deal which turned into such a massive clusterfuck that exactly none of the players involved emerged in any other manner than smeared with shit from head to toe. (https://bitcointalk.org/index.php?topic=196150.0;all)

Note also that NONE of these highly controversial acts and omissions were placed before votes of the Foundation's membership, in radical contravention of the founding spirit of the organization if not the language of its founding charter.

THUS, IMHO, and as a Foundation Life Member, I hereby move that the Foundation dissolve itself, immediately, and enter into a binding legal plan to reimburse all donors proportionately, once legitimate expenses and outstanding debt incurred to date is covered. Additionally, I move that the Foundation immediately terminate all relations with Peter Vessenes, Mark Karpeles (sorry, dude) and Patrick Murck, and that Jon Matonis be appointed interim Executive Director, to serve during the company's receivership and through it's final dissolution as a legal entity.

And I am ready to support a new organization which actually serves the interests of Bitcoin (and other cryptocurrencies, as appropriate), with such egregious conflicts of interest excluded from decision-taking power and with a broad umbrella missing to accommodate ALL of the Bitcoin community, not just those who are only too delighted to cuddle up to regulators and politicians on the little-guy donor's coin. The new organization shall operate democratically from day zero. I move that Jon Matonis be named custodian of founding donations and that he shall serve, once and only once, as Chairman of the founding, general meeting of the entire membership, at which a full charter and a full set of by-laws shall be adopted and a new slate of directors and executives elected, such meeting to be held not less than 60 days from now and not less than 120 days from now, and to include the technical capacity for as many voices as possible to participate and be heard (that is founding-donors-only google hangout, IRC channel, toll-free teleconference linked to a skype teleconference, etc.).

Who's with me?

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[Raoul Duke]

You know what I find surprising?
You, Mike, of all people, couldn't see the bitcoin foundation would just turn into a lobbying institution and paid for a lifetime membership...
I mean, really? Even I could see their true purpose, and I'm not as smart as you, not even close 

Not being a foundation member I can't do much more than offer my support to your proposal, useless as that support may be.

[bg002h]

Good luck getting your $300 back...well, $300 presuming you joined before the ฿ fee grew way put of sync with the $ fee. I just used $ to immediately buy and spend ฿ right after an adjustment, so it cost me the intended low $ amount.

[QuantPlus]

+Jerry Brito and +Declan McCullagh Yes, the exchanges are a vulnerable point, almost a "systempunkt"...

As +Nick Weaver alludes to, Bitcoin really is fundamentally incompatible with the pharaonic pyramids of the legacy banking system...

The [financial and litigation] conflicts of interest among directors...

Who's with me?

How exactly did Bitcoin control become centralized and Made in America...
The single most dangerous jurisdiction for BTC?

Why are open source decentralized exchanges not a top priority?
Why should BTC 100% depend on small businessmen rolling their own exchange sites?

And why is it always BTC to Fiat?

Fiat is owned by Central Banks. You don't "own" that dollar in your pocket.

It should be BTC to commodity (gold, gasoline, beads, whatever)...
There is infinitely less regulation of commodities...
And BTC (as of 2013), has the velocity of a commodity, not a currency.

[mikegogulski]

You know what I find surprising?
You, Mike, of all people, couldn't see the bitcoin foundation would just turn into a lobbying institution and paid for a lifetime membership...
I mean, really? Even I could see their true purpose, and I'm not as smart as you, not even close 

Not being a foundation member I can't do much more than offer my support to your proposal, useless as that support may be.

Call it a blessing, call it a curse, but I'm one of those people with the "I'm OK, you're OK" orientation imprinted at the lowest level. This means that I tend to trust people complete at first sight rather than to begin from suspicion. For me, trust is not earned, but destroyed by betrayal or damaged by ill action.

Thanks for the compliment, too, although this isn't about being smart in the one-dimensional way intelligence is usually defined. I can be a complete dumbass in terms of social and emotional intelligence, to the point of making people cry IRL when trying to persuade them intellectually about something I believe in passionately.

You don't have to be a member of the now-moribund foundation to make a contribution here, and to join and support a new effort (whether one emerges from my proposals here or not). I've just pushed the RESET button on the whole thing, at least in my own mind. So, new world. Where shall we go?

[mikegogulski]

Good luck getting your $300 back...well, $300 presuming you joined before the ฿ fee grew way put of sync with the $ fee. I just used $ to immediately buy and spend ฿ right after an adjustment, so it cost me the intended low $ amount.

I paid 25 BTC right at the beginning for a life membership, so it was around that level.

But honestly I don't care about the money a single bit. Sure, I could use it for better things, but whatever. I *do* care about others getting theirs back, but hey, if leaving $1m of BTC/USD value in Treasurer Peter Sellout Vessenes's pocket is the price of rapidly excising this malignant tumor from the body of the Bitcoin community, well, I can't speak for others, but it's a price *I'm* willing to pay.

[lettucebee]

Mike,
are you saying that Vessenes used your service to launder bitcoins before he engaged in his regulatory escapades?

[mikegogulski]

Mike,
are you saying that Vessenes used your service to launder bitcoins before he engaged in his regulatory escapades?

Peter Vessenes INVENTED bitlaundry.com. I created bitcoinlaundry.com unaware of its existence. Later, Peter offered the site and code for sale, and I bought it.

Teaser quote from an upcoming magazine article where I'm interviewed:

bitlaundry.com was actually started before my first service, in mid-2010, by Peter Vesseness, currently CEO of the Bitcoin Foundation (https://bitcointalk.org/index.php?topic=624.0;all and https://bitcointalk.org/index.php?topic=963.0;all ). I acquired the service from Peter in early 2011 for BTC 100: https://bitcointalk.org/index.php?topic=6939.0;all

[cbeast]

There are any number of ways to distance a btc quantity from the last known IP and associated address(es). Peter knows this as do most developers including the OP I would suspect. I don't understand your objection. I consider what Peter et. al. are doing as baby talking to non-bitcoiners. They need to speak with small words to small minds. Regulation is IMPOSSIBLE with Bitcoin in the context they are discussing. All they want to do is open the door of acceptance by bowing to the naked emperor. I am sure they are having a good laugh about it behind closed doors as should the OP.

Do what you want. It doesn't matter. Governments will attempt to regulate Bitcoin no matter what anyone says. They will fail no matter what anyone does. It's like catching a cold, you just chill out and let it run its course.

[dave111223]

Look on the bright side, you can still get your moneys worth by using the "Bitcoin Foundation Lifetime member" avatar

I think it's this one right? (That's worth $3000 right?)

[wumpus]

If you are to start some new Bitcoin community-driven organization, please make it one of the priorities to fund client development and testing. I don't see the Bitcoin Foundation doing this enough.

[Brushan]

Everytime i hear the Bitcoin Foundation talking about regulating Bitcoin..
http://imgur.com/H4TfQNp

[Raoul Duke]

If you are to start some new Bitcoin community-driven organization, please make it one of the priorities to fund client development and testing. I don't see the Bitcoin Foundation doing this enough.

I think the Bitcoin Foundation openly states that all they intend to do on that level is to pay Gavin a salary, not to fund client development and testing. You're right that any other organization should make it a priority but not on the same terms e.g."Pay developer X a salary"

[tempt]

If you want it to disappear, ignore it.

[crazy_rabbit]

Well elections are coming up. If you feel so strongly, you could run for the board. You do after all have some vote if you're a member.

[ktttn]

All they want to do is open the door of acceptance by bowing to the naked emperor. I am sure they are having a good laugh about it behind closed doors as should the OP.

Do what you want. It doesn't matter. Governments will attempt to regulate Bitcoin no matter what anyone says. They will fail no matter what anyone does. It's like catching a cold, you just chill out and let it run its course.

Agreeing hard. I'm smolderingly new, but it makes sense for an org as by design yuppy and libtard friendly seeming as that to be sending a lobbyist to washington. It makes my stomach turn, but while these powers still exist, what other lip service fake white flag could be put up to attempt to delay or prevent raids on miners?
I can tell you from experience that when you occupy land the state doesn't want you to occupy, they truly will riotcop your ass and equipment into the ground. If playing the dumb game as a strategy succeeds, perhaps fedreserve patriots will simply look away instead of literally bombing us.

[FoBoT]

"democratically-constituted umbrella organization" , that would be just as bad as a King (King Gavin that you rail against?)
democracy is tyranny of the majority, just as bad as a dictatorship\

no central authority is needed, no alliance with the US National government agencies is needed

[wumpus]

I think the Bitcoin Foundation openly states that all they intend to do on that level is to pay Gavin a salary, not to fund client development and testing.

I know that. That's why I mentioned it.

You're right that any other organization should make it a priority but not on the same terms e.g."Pay developer X a salary"

Developer and tester bandwidth is kind of the elephant in the room for bitcoin, especially as the system grows. Gavin admits this, too (see for example http://www.cio.de/_misc/article/printoverview/index.cfm?pid=156&pk=2916242&op=lst ).
We really can't expect developers for a worldwide online currency to do their work out of altruism.

If a new bitcoin organization is just about politics and business and not development I certainly wouldn't support it.

[QuestionAuthority]

Isn't this a Foundation issue better discussed among the membership than in open forum? TBF represents TBF interests. They do not represent the interests of all users. TBF represents a subset of American users that have donated to be a part of that group. TBF has its own forum where members can discuss Foundation interests which obviously don't coincide with the interests of all users or everyone would be a member. Soliciting involvement from non members is pointless because they already don't believe TBF represents them or they would have joined.

[paraipan]

...

Who's with me?

I'm with you and they can keep my one year subscription, I only wanted to support Gavin and his team, but he's doing an awful job lately.

https://github.com/bitcoin/bitcoin/pull/2577