Thursday, September 27, 2012
Several months in the making, the Bitcoin Foundation launches this week to accelerate the global growth of bitcoin through standardization, protection, and promotion of the open source protocol. As a nonprofit corporation and neutral forum for collaboration, the Bitcoin Foundation follows the successful model of open source bodies like the Linux Foundation and the Tor Project.
Bitcoin is a decentralized electronic cash system using digital signatures and cryptographic proof to enable irreversible payments between parties without relying on trust. Leveraging the breakthroughs of public-key cryptography, bitcoin also uses peer-to-peer networking to operate without a central authority whereby the new issuance and transaction verification functions are carried out collectively by the network. In the absence of a third-party processing intermediary, transactions are rapid and simple to send and receive with little to no fees.
As both a payments platform and a nonpolitical unit of account, Bitcoin has already seen astonishing growth in just over three years. Bitcoin’s total base money supply is currently valued at $125 million. Number of transactions has gone from 219 in 2009 to 4,964,513 year-to-date in 2012. The value of bitcoins transferred per year has gone from 35 trillion BTC to 60,896 trillion BTC. And, the network hashing rate, which is a measure of computational speed or horsepower, has increased from 0.008 Giga hashes per second in December 2009 to 19,284 Giga hashes per second in September 2012, thereby making it the largest distributed computing project in the world today in terms of processing performance. (Source: State of the Coin 2012)
With a growth trajectory like that, it becomes even more imperative to standardize and manage the ongoing change process to the core software while simultaneously enhancing overall security and robustness. Since 2009, Bitcoin.org has served as the focal point for the collaborative open source development effort.
A lot will be changing as the foundation ramps up. The Bitcoin Foundation mission leads to the early specific goals of financially sponsoring the efforts of the core development team, funding core infrastructure such as a test network and a DNS seed node, publishing a set of best practices for bitcoin integration, coordinating responses to business and media inquiries, and organizing an annual bitcoin conference with the first one being held in Silicon Valley.
In addition to individual membership, the Bitcoin Foundation provides a way for corporate enterprises from all industries to participate in the expansion of the bitcoin network and platform. We see new bitcoin exchanges sprouting up on a daily basis and we see innovative bitcoin applications coming to market across all industry sectors. Magnificent for bitcoin, this worldwide adoption strengthens the credibility and value of the peer-to-peer network. A nonpolitical currency doesn’t have a morality — it is simply a process for value transfer.
The overriding intent that runs through all Bitcoin Foundation activity is that it be membership and community driven, including succession planning. Reflected in the governance structure, individual and industry corporate members will have voting rights consistent with Bitcoin Foundation Articles and Bylaws. Annual individual membership is 2.5 BTC with a 25.0 BTC lifetime option; corporate membership is 500 BTC for silver tier, 2,500 BTC for gold tier, and 10,000 BTC for platinum tier.
Donations in support of the Bitcoin Foundation can be made by going to the website.
Initial board members include Gavin Andresen, Mark Karpeles, Jon Matonis, Patrick Murck, Charlie Shrem, and Peter Vessenes.
Executive Director Vessenes proclaims, “My hope is that the Bitcoin Foundation will be the organization that focuses and unlocks all of your energy and talents towards promoting Bitcoins, protecting them, and increasing their legitimacy through standardization. Bitcoins truly are the Internet’s currency in my opinion and it’s so exciting to be a part of this disruptive and engaging technology!”
[Disclaimer: Author serves on the Foundation's Board of Directors as Secretary.]