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

19 May 2013 by Mike Gogulski
Posted in activism, people | 7 Comments »

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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 ( at 5:23 that the Foundation will be hiring a lawyer to lobby regulators in Washington DC:

As I wrote:

#BitcoinFoundation is DEAD TO ME. Lobbyists? Fuck you @Vessenes shyster sellout! Give my BTC 25 back! #Bitcoin2013


Is that why you sold me @vessenes? So you could look squeaky clean while cozying up to politicians?#Bitcoin2013 (


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


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 (

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 ( 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, 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.


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. (;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?

  1. 7 Responses to “The Bitcoin Foundation is TOXIC and must dissolve, plus a call to action”

  2. By PR on 19 May 2013

    Dead-on accurate, my friend. This is a time to do NEW things, BETTER things, not to recycle the same old statist, hierarchical crap.

  3. By Ralphtheninja on 23 May 2013

    I’m with you. Fuck the banks and fuck the government!

  4. By TK on 13 June 2013

    no doubt that the conflict of interests b/t directors is TOXIC.

    Been thinking of a positive outcome through the DC lobbying initiative for a while now.
    “I got into #Bitcoin to improve this miserable planet and ESCAPE the iron grip of privileged moneyed interests, not JOIN THEM!” – Me too! I still find it difficult to dismiss it right off the bat (less than 30 days since the announcement).

    Great Post!

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