by Jonas


  • bitcoin
  • funding

I’m grateful that Chaincode doesn’t have an open grant process. It’s an enormous time investment to do well. Square Crypto, BitMEX, OKCoin, and others should be lauded for their financial contributions back to the ecosystem. But after convincing the higher-ups that grants are a good idea, the real heroes dig in to read all those applications and talk with dozens of candidates. Over this past year, it’s been a thrill to see an uptick in dev funding. I’ve witnessed life-changing grants that allow developers and researchers to turn 100% of their attention to Bitcoin development. That trend seems to be accelerating with more individuals and exchanges recognizing the importance of supporting the devs that secure our Bitcoin future. I enjoy giving Peter McCormack flack as much as the next bloke, but it’s hard to avoid appreciating his use of his platform to advocate that bitcoin corporations acknowledge their responsibility to financially contribute to the maintenance of the infrastructure that underlies their businesses.

Why give?

The narrative around why businesses or individuals need to give back remains difficult to articulate. There is a vague feeling that businesses making money off the protocol should give back. But writing no-string-attached checks to at-large devs doesn’t fit neatly into an incentive-based system like Bitcoin. Some long-time code contributors likely have some bitcoin holdings giving them a vested interest in protecting their holdings. But given the natural dev turnover, relying on developer goodwill doesn’t seem sustainable.

In general, dev funding for open-source projects is far from a solved problem. The Cathedral and the Bizarre paints an optimistic picture of open-source development, but time has revealed that this hasn’t quite come to fruition. Bitcoin, however, is money. You’d imagine there is enough surplus from this great wealth transfer to help fund the infrastructure development on which this ecosystem is built. While the immaculate conception created the fairest distribution possible, we can only hope that the beneficiaries feel the weight of their responsibility towards those who weren’t as prescient.

Most of my conversations about funding Bitcoin devs often focus on the present need rather than systemic ways to make long term contributions sustainable. At present, we heavily rely on the goodwill of a few and good ole fashion guilt to fund a couple of dozen active contributors. The alternative has also been tried, but that didn’t work out so hot either. (Note: there was an attempt to resurrect the Bitcoin Foundation in 2018. If interested, the effort yielded a deck for friends of the foundation and a new marketing strategy.)

Who to give to?

Finding who to give to is a more nuanced problem than finding the money. It’s an enormous undertaking to find deserving candidates. We don’t have a great system for those looking to simply write a check rather than diving deep into the project’s commit history. (I’ll write up some research I’ve done on 501(c)(3)s soon.) There a few approaches that have seemed to work:

Give to an organization. Whatever your opinion on MIT DCI or HRF once you write the check, you can feel good and let someone else worry about who to give it to. It’s tax-deductible too. Hire a superhero. Square Crypto is giving out a lot of grants. Steve Lee is everywhere and knows everyone. If you are building something like a Square Crypto or launching a $500K+ grant program and you can find one of those people that can manage the process, your job just got a lot easier. BitMEX went this route, and I think the results were pretty good. Ask other contributors. I think Coinbase recently did a good job assembling a committee of active contributors giving them the chance to review candidates. This works if you are a company, but it’s also possible to do as an individual. People in the code know what’s going on.

The main pitfall of these approaches for funders is that it still takes work to find people or orgs aligned with how you’d want the money to be distributed. Finding people who know the landscape is difficult, and then you still have to trust that they will sniff out the deserving parties.

Another option is sprinkling money around through crowdfunding like bitcoindevlist. This sounds great in theory, but I worry that donations follow a power-law of already-fundable candidates or twitter personalities attracting disproportionate support. (I once heard the suggestion that those fundees could then distribute their surplus to deserving candidates, which I’m skeptical of, but would love to see in the wild.) Grassroots funding will always be the most decentralized path, but I haven’t seen examples of its sustainability to date. I hope with the next bull run to be proved wrong.

Thank you

Funding matters and the fact that you are interested enough to get to this point in the post reflects who you are and your investment in helping Bitcoin. Thank you for caring so deeply. Let me know if I can be helpful.