
The truth about the Bitcoin Foundation - notsony
https://bitcoinfoundation.org/forum/index.php?/topic/1284-the-truth-about-the-bitcoin-foundation/
======
Frondo
Whether Bitcoin was designed as a scam, I'm not too interested. Whether
Bitcoin today operates as a scam, I'm not too interested. The fraudulent
nature and qualities often discussed don't interested me too much. There is a
deeper issue I've raised, that I've never seen satisfactorily addressed, with
Bitcoin:

It has economic assumptions baked into it (deflationary, fixed size of money
pool, etc). These assumptions, like all economic assumptions built into a
currency, will guide and govern people's behavior and use of it. That means
that bitcoin is a human-invented system that, if it came into any widespread
adoption, would play a role in suggesting or controlling people's behavior,
just like any currency.

The difference is, the people whose behavior would be controlled have no say
in changing those economic assumptions. The people who could potentially live
in a bitcoin-infused world have no voice in how it operates. Bitcoin, in
effect, takes a degree of agency from the people, and this is especially
problematic if it became widespread enough that you'd be compelled to use it.

Why does that matter? Because people have a right to democratic institutions.
People have a right to vote on or have a say in matters that govern their
lives. Bitcoin, as it exists now, takes that away from people.

And, to bring up a couple of things people have said to be me here before, the
fact that Bitcoin can be changed (i.e. by writing new code and persuading 100%
of the community to adopt it) does not make it democratic. Setting the barrier
to democratic participation at "learn to code, or pay someone to code, and
then change everyone over all at once to your new software" means that that
isn't really a democratic system at all.

And to bring up the point that currency shouldn't be democratically decided,
well, no. People have a right to govern their affairs and live in a society
responsive to their needs. Moving in the direction of taking some of that
agency away is moving in the wrong direction.

I'm not opposed to digital currency in general, but I am opposed to one that
operates in a way that I have no democratic recourse if I don't like how it
runs.

~~~
ende
Do you think the central banking based currencies offer any democratic
control? You'd be kidding yourself if you thought so. Central banking
centralizes control of a currency under the influence and in the interests of
the economic elite. Distributed currencies like bitcoin deny that control to a
centralized authority. That alone makes it more democratic. It is important to
note that it is not bitcoin itself that is revolutionary, but all the
distributed currencies that follow it. It is the evolutionary modification and
adoption of those currencies that is democratic, through the emergence of a
competetive market of currencies all based on different ideas.

~~~
bduerst
Why do bitcoin evangelists always deflect by pointing fingers at central
banking?

Bitcoin is controlled by the few barons who own most of the coins, and unlike
central banks, those barons are entirely, rationally aligned with their own
personal profit. Same with the overseas miners who invested in infrastructure.
The federal reserve may be influenced by politics, but at least it is aligned
with keeping the USD currency stable, and usable by citizens.

The personal interests of the bitcoin elite are why bitcoin suffers from
_tragedy of the commons_. Bitcoin will never be anything but deflationary
because the ones who control it (barons, miners) do not profit from change
that is beneficial for bitcoin.

~~~
MCRed
You should read the book The Creature from Jekyll Island and learn about how
the Federal Reserve was created, what it is (hint, it's a private bank), who
owns it, and what it has done over the past 100 years.

The federal government has some influence over the federal reserve, but it's
advisory at best. Their deal is that fed allows the government to deficit
spend as much as they want and in exchange the fed gets an cut of the interest
on every dollar (which are federal reserve notes-- eg: debt.)

The federal reserve has not kept the USD stable, and is, in fact, financially
incentivized to destroy the USD via inflation, and is busy doing so. They are
obscuring this destruction by using the power to print dollars to buy
treasuries at auction making it look like there is massive demand for such
treasuries, keeping interest rates low. They keep interest rates low, which
boosts government spending (Because its "cheap"\-- at least in the short term)
and this boosts fed income because they get the interest.

The bitcoin protocol was clearly made by someone who understood economics an
didn't want to allow such a scam to be perpetrated on the public the way the
fed has defrauded us of %99 of the value of the dollar over the past 100
years. (probably more like %99.9999 ... but I'm not sure how many 9s there are
after the decimal.)

It's not a deflection to point to central banking-- central banking is the
reason for bitcoin being the way it is.

~~~
aptwebapps
While the Federal Reserve system has member banks, they only get a small slice
(6% according wikipedia) of its profits with the rest going to the US
Treasury. So it's not materially a private bank.

If the Fed is currently busy destroying the USD via inflation, it's doing a
pretty poor job of it has kept inflation under 2% for quite some time now.

~~~
anonbanker
Congrats on completely ignoring how the Fed no longer publishing M3 data[1],
therefore concealing all aggregate money supply, would completely distort[2]
any later inflation numbers provided (such as the percentage you just listed).

1\.
[http://www.federalreserve.gov/releases/h6/discm3.htm](http://www.federalreserve.gov/releases/h6/discm3.htm)

2\. [http://mises.org/library/death-m3-fifth-
anniversary](http://mises.org/library/death-m3-fifth-anniversary)

~~~
aptwebapps
M3 might help you make predictions about inflation but you don't need it to
measure it.

~~~
anonbanker
Indeed. you especially don't need to measure it if you're intentionally not
paying attention to inflation.

~~~
aptwebapps
I was too free with my pronouns. You might like to know M3 to think about
inflation, but you don't need M3 to _measure_ inflation.

------
davidw
I'm reminded of:
[https://twitter.com/patio11/status/583696870704152576](https://twitter.com/patio11/status/583696870704152576)

~~~
kang
Patio11 goes on a tweet storm here where he is wrong so many times.

>"..Most advantages of Bitcoin which matter are captured by, and improved upon
by, a LAMP app which simply holds account balances."

The blockchain is a ledger fine. But mining & proof of-work are separate
concepts from the ledger. Mining is not only digging gold for distribution but
also checking that the money note you just received is 'not counterfeit' \+
'unique'.

> "Bitcoin is not a protocol in any meaningful sense of word.."

Bitcoin isn't but blockchain is. It is an algorithm that enables value
transfer over any medium of transmission. Similar to how morse code enabled
data transfer where only signal was being transferred. Similarly, internet
enabled information transfer where only data was being transferred. Blockchain
is the 8th layer of the OSI model.

>"..Bitcoin's disaster recovery plan is a) get a cabal of people together in
IRC, b) shut down the entire payment network, c) sort things."

Forget bitcoin. Its like looking at the internet and finding faults in hotmail
as the first email service.

> "A good portion of geek enthusiasm for Bitcoins comes from the fact that it
> is programmable money. But: Money is also programmable money."

No. Forget money. Blockchain is the thing. Its like saying internet is all
about email. Internet enables information transfer, now what is information-
transfer in plain english? A letter. Hence messaging is the first natural
application of internet. Blockchain enables value-transfer, what is that in
plain english? Money.

~~~
kang
Downvotes coz I call out patio11? explanation please?

~~~
vinceguidry
Not so much the calling out as the tone, which is unwarranted for pretty much
any discussion on HN.

~~~
kang
Please care to explain the tone. Is the word fuck banned on here? I wrote
'fuck bitcoin, blockchain is the thing' where I got just a little passionate
and really meant 'forget bitcoin and see blockchain'. Even then, my comment
wasn't rude in anyway.

~~~
vinceguidry
Well, your comment starts off by calling him 'wrong'. That immediately sets a
combative tone for the rest of the comment, which would have been perfectly
reasonable otherwise.

A lot of times if your tone is unintentionally off you'll get a few initial
downvotes but other people will see your intentions and bring you up out of
the grey, which is what happened here. You're continuing to get downvoted on
other comments because they're contributing to a discussion nobody wants to
see, the discussion about the discussion. It's best to just stick to the
topic, and treat downvotes and the score in general as the ultimately
meaningless internet points that they are. HN prizes the generally high
signal-to-noise ratio of the comments.

Also Bitcoin is a political topic, one that will draw lots of people who will
downvote you just because they don't agree with you.

~~~
vinceguidry
This post seems to be getting more than usual upvotes for a comment deep in
thread, and I can't edit it anymore, so let me add that I typically will
consider deleting the first sentence of every email and comment I unleash on
the world. It is often detritus that just doesn't belong there.

------
bhouston
I do not know exactly who this guy Olivier Janssens is, but he shouldn't be
offering money out of his own pocket to fund this shit storm if it isn't his
fault.

Let the organization go bankrupt and create a new one.

~~~
sanswork
Pretty sure all his wealth comes from Bitcoin so it's in his interest to spend
money to support the growth of it.

~~~
oafitupa
What you said makes no sense whatsoever.

------
Ologn
Bitcoin itself is a scam, so it's no surprise that all the key organizations
around it are founds to be scams - the Bitcoin Foundation, Mt. Gox - even
hardware manufacturers like Butterfly Labs.

The scam actually ended in December 2013, when the original scammers unloaded
hundreds of millions of dollars worth of their worthless hyped hashes for
$1100 each. Everything has been gravy since then - they made over $100 million
in the last year as well. The bitcoin is worth under $260, and headed to zero.

Warren Buffett and Charlie Munger have been around long enough to know a fraud
when they see one, and Munger correctly termed Bitcoins "rat poison". It's not
a digital currency - it's a Ponzi scheme that will kill any chance of an
actual digital currency from being developed in the subsequent years after its
inevitable demise. I was saying so here when it was worth over $460. If the
bagholders had listened instead of downvoted, they would have saved a lot of
money. You still have time to get out before it plunges to zero. The idea
these worthless hashes can retain a $3 billion market cap is risible.

I know why a commodity like gold has value, or why oil has value. Gold has
been used as a currency, or to back currencies for thousands of years. Gold
backed the US dollar until 1971. In fact, the 10,000 tons of gold the US still
holds in Fort Knox and elsewhere still backs the dollar, albeit indirectly
(for what other reason are they paying the expenses to store it?)

Why does Bitcoin have value? It doesn't, nor did Pets.com, subprime real
estate, Dutch tulip bulbs, or other bubbles supported by hype.

HN has new rules against gratuituous negativity. I warned some people here
from this scam over a year ago when it was over $460 (now <$260). I don't know
if people can be warned off hype here in the future, but if so, you can always
listen to old hands who have seen it all before like Munger and Buffett, who
see this "rat poison" for what it is - valueless hashes, destined to be priced
at their true worth - $0. Of course, as Keynes said, markets can remain
irrational longer than I can remain solvent.

~~~
jmount
My (non-expert) OPINION is: Bitcoin is a scam. I do support the idea of
digital currencies (possibly even decentralized), but I don't think Bitcoin is
the appropriate flag bearer. I understand the term "scam" may seem rude or
offensive, but it is what I mean. For example: I don't mean "I think Bitcoin
is a bad investment." I think it is something else entirely.

I understand this seems to be a minority opinion on hacker news. I know I
don't have the exact parameters of the scam. But insisting on such degenerates
into some weird imitation of constructivist logic that seems to claim: if you
can't point out exactly when you are going to be ripped off then you can't
prove you are going to be ripped off, and therefore you don't know you are
being ripped off.

Or: no, I don't know how to make money shorting Bitcoin. But I also don't know
how to make money shorting 419 scams. That doesn't mean these things have
positive value. Assuming information always has tradable value (i.e. you can
go long or go short) is attempting to apply an idea that may or may not be
true for investments to a completely different category (scams).

What I think confuses people is we are in the time interval where Bitcoin is a
successful scam. So it superficially appears different than any past failed
scam you compare it to. But Bitcoin is almost entirely about paying earlier
investors purely with proceeds from later investors. A lot of abstract markets
and currencies do appear to be similar to this, but tend to have other
mitigating features that I just don't see in Bitcoin. (The mitigating factor
for traditional currencies is the large state institutions that would lose
reputation in a hyperinflation scenario, hasn't always stopped hyperinflation-
but it is at least a weak counter-force; for stocks it is the fiction of
company control/ownership/dividends/voting-rights; gold the liquidity of the
resale market and demand for jewelry; I am not saying these are good
institutions, just that you certainly don't want to be even worse.)

I would say to the pro-Bitcoin crowd: if you don't think Bitcoin is a scam, is
there any description of a system that you would consider a scam (with our
without the Bitcoin name attached)? I say this in seriousness as I really
suspect there is some sort of "by definition informed investors can't be
scammed, they can only make good or bad investments" element to some of the
debates.

~~~
oafitupa
A scam is a trickery by which you fool someone into giving something of value
to you.

Bitcoin is open source, and what we say it is is exactly what it is, and
anyone (or any programmer, but hey, this is HN) can check it, so there is no
scam.

By your logic then gold and every other investment is also a scam, because you
are "giving money to earlier investors".

~~~
jmount
Okay, here is a completely open offer. Somebody says: "give me $10,000 and I
will give you nothing back in exchange." I would call this a scam. Not a very
good scam, but a scam.

~~~
oafitupa
And you would be wrong, because a scam requires a trickery and someone being
fooled.

------
anon4this1
bla bla bla..

basically every centralised entity arising from bitcoin/the blockchain has
crapped out/been a waste of money. pointless altcoins, asic mining cos,
bitcoin stocks, all the rest.

core, real, bitcoin itself remains a fantastic investment with massive upside,
and will continue to be an incredibly useful in particular areas (darknet
drugs etc)

All the corruption on the peripheries is expected and irrelevant. long live
bitcoin.

------
kang
People might have not known that there is no money left, nevertheless no one
trusted the foundation. The people in the crypto community here in India have
always been criticising centralisation of power by forming a foundation.

There are attempts to form rival groups like alliances etc but people know
better. However, the media doesn't and thus to a neutral it might seem that
these orgs hold a lot of importance in the community.

~~~
smoyer
The media has and will continue to have a problem with bitcoin because,
without a centralized organization there's no one for them to consider an
authoritative source. With a centralized organization, bitcoin loses the
"purity" of being truly distributed (from the users perspective).

------
em3rgent0rdr
Wow.

Ironically, the bitcoin ecosystem always seems to have problems with
centralized points of failure.

~~~
xorcist
It also makes embezzlers out of federal agents, apparently.

I sincerely hope that film writers have paid attention the past year, from
MyWallet and onwards. It's all golden, beyond-belief territory with colourful
characters involved.

~~~
yc1010
Thats what makes Bitcoin (following r/Bitcoin daily) so exciting, its like the
Wild West of technology. There is a window of a few years to make serious
money here IMHO (legally and unfortunately illegally) before various
organisations who like their power (and havent yet woke up to the threat
Bitcoin poses to them) crack down on Bitcoin, we already see Bitcoin being
banned in more repressive regimes such as Russia, the US aint too far behind.

I first got interested in 2012 buying a pile at 3-4$ per bitcoin to play
around and satisfy my inner nerd. Then I forgot about it for a year or 2, it
has been a wild ride since...

~~~
TheOtherHobbes
It's like the Wild West of Tech because it's easy money for scammers, thieves,
liars, and frauds - all of whom love easy money.

I don't think you can make a revolution work by handing it over to sociopaths
and then wondering where all your value went.

You probably need something more subtle.

Still - BTC is interesting because altcurrency _is_ the future, and mainstream
banking is going down within 20-30 years.

But it's going to be something more reliable than BTC that kills it. BTC is a
premonition, not the real deal.

------
moe
Curiously the btc-price went slightly up rather than down following this
announcement.

The community at large doesn't seem to care much.

~~~
sanswork
I don't think the community at large has had any faith in the foundation for a
long time so I don't think this is any surprise. I mean Oliver was largely
voted in on his promise to destroy it from the inside.

~~~
josephagoss
This is mostly true, the foundation has been somewhat of a black spot within
the community for a while now.

Most people only really entertained the idea of the foundation as it was
paying Gavin and another core developer a salary for their work, which is the
only upside.

------
oldpond
Let it die. Bitcoin was a huge mistake. Speculating on virtual currency is no
different than speculating on "real" currency. It was subject to the same
corruption that it was designed to avoid. I'm not surprised, and I hope this
will trigger some clearer thinking on the future of financial systems.

~~~
oafitupa
[http://bitcoinobituaries.com/](http://bitcoinobituaries.com/)

------
jackgavigan
Growing pains are to be expected with an emerging technology/eco-system like
Bitcoin.

It would be interesting to have sight of the Foundation's accounts, to see
what they have been spending the money on.

~~~
joshftw
Just checked. They have no published accounts as the Ltd is so young. In
exactly 5 months they will have to publish accounts (in the UK at least under
company number 08802555). No doubt they will have internal accounts which
would be nice to see but they will be over by then. My credit reporting
software gives them a 'moderate' risk of failure.

~~~
jackgavigan
The UK limited company is merely a subsidiary of the US entity, which is "a
District of Columbia non-profit corporation", according to the byelaws:
[https://github.com/pmlaw/The-Bitcoin-Foundation-Legal-
Repo/b...](https://github.com/pmlaw/The-Bitcoin-Foundation-Legal-
Repo/blob/master/Bylaws/Bylaws_of_The_Bitcoin_Foundation.md)

I doubt that much, if any, money passed through the UK limited company. Hence
its company accounts are unlikely to be informative.

------
datashovel
The ideal cryptocurrency in my mind has (1) a core specification that never
changes (2) no reliance on a centralized "foundation" (3) no blockchain.

I know #3 is somewhat ironic, but given the unwieldy nature of the blockchain
(especially when you scale it out to global use) I don't see a long-term
sustainable future. With a blockchain comes 3rd party bitcoin "banks" which
IMO is just the same financial structure as we have now, just different people
running it.

~~~
josephagoss
Good points. Regarding (1), I think Bitcoin is heading very quickly towards
that reality. Satoshi made a comment that most of Bitcoins rules will never
change after he released the first version of the software. There are only a
few decisions left, such as block size and side chains.

Side chains will be interesting, as the specification of Bitcoin becomes fixed
and never changing, new additions could be added onto Bitcoin outside of the
core specification via these side chains.

Will this work? Who knows.

Point (2), Bitcoin hasn't really had to rely on the foundation except for the
salaries of two core developers. As I understand it most of the Bitcoin core
development team are not supported by the foundation.

(3) Instead of no blockchain, I wonder if there is a way to make a more
distributed blockchain? Imagine that a single copy of the blockchain could
exist on perhaps 1000 nodes instead of just 1?

Just a thought? I think the essence of the blockchain, this immortal database
that proves the integrity of each Bitcoin, I really think we need to keep this
in some way.

~~~
datashovel
A distributed blockchain could have promise. Regardless I know the blockchain
will bring (already has brought) many amazing things to the world. It truly is
a great innovation.

With that said I'm still not 100% convinced a distributed blockchain is
essential to have legitimate cryptocurrency. I know the problem has been
worked on for a long time by a lot of really smart people, and this really is
the best implementation to date.

I guess for me the path is clear. Whoever comes up with the simplest, least-
technical implementation will win the race for adoption. No matter what
though, I'm confident cryptocurrency is the future of currency.

------
jokoon
One of the funniest thing about bitcoin is how its creator just hides in the
shadow, like he knows bitcoin is not really something he advocates, but just a
technology.

What's interesting about bitcoin is its blockchain algorithm, nothing else.

~~~
josephagoss
I think it was a good thing that Satoshi left.

Satoshi was simply a single point of failure, some obvious element of the
system that could be attacked, especially knowing how many Bitcoin this person
amassed.

When Satoshi left, Bitcoin became that little bit more decentralised, as
others had to take on the lead development role and the community had to allow
others to take the lead.

All the decisions about Bitcoin's future with regard to technical issues is
now heavily debated, if Satoshi were still here there might not be a debate,
just a decision.

Most of us in the community agree that Satoshi's departure was for the good of
Bitcoin.

~~~
jokoon
Who cares about a debate ? I'd prefer a decision of its creator.

> the lead

The lead of what ? He's certainly the most knowledgeable person about bitcoin.
Anybody could invent another virtual currency algorithm now.

> Most of us in the community agree that Satoshi's departure was for the good
> of Bitcoin.

A majority can still be wrong though.

~~~
oafitupa
> He's certainly the most knowledgeable person about bitcoin.

That's false. There are several persons who are way more knowledgeable than
him now (assuming he hasn't been following the developments since he
disappeared).

