Funding Bitcoin development seems to have always been
While the Bitcoin industry collectively has raised more than a
billion dollars worth of investment over the past years,
development of the
Free and Open Source Software
the industry largely relies on has always had trouble
gathering sufficient funds and manpower for development. Several
arrangements to raise funds have been tried over the years -
but with varying degrees of success and longevity.
, considered by many to be Bitcoin's "reference client," therefore,
announced a "
" earlier this week. As the latest effort to raise funds, this
program is intended to be an easy access-point for companies and
other Bitcoin industry players to support Bitcoin Core developers
and projects. Companies that decide to take part in the sponsorship
program will join a, so-far, short list of entities that do already
help fund Bitcoin Core development.
These are the main sources of funding as it currently
MIT Media Lab's Digital Currency Initiative
Shortly after the
a year ago, the three Bitcoin Core developers funded by this
foundation - lead maintainer Wladimir van der Laan, former lead
Gavin Andresen and Cory Fields - were hired by the then newly
MIT Media Lab's Digital Currency Initiative
The MIT Media Lab is an interdisciplinary research laboratory
headed by tech-veteran
, while its Digital Currency Initiative is headed by former White
House adviser Brian Forde.
to Forde, the Digital Currency Initiative intends to provide a
neutral academic working environment for the developers.
All three developers on Digital Currency Initiative's payroll
are said to enjoy almost complete freedom; they are even allowed to
work on alternative Bitcoin implementations if they wish. (Andresen
no single implementation in particular
, and mostly switched his efforts to
over the past year.)
Neither MIT nor the Media Lab or its Digital Currency Initiative
put up the money to fund the developers themselves, however.
Instead, the Digital Currency Initiative relies on
from sponsors, including mining specialists BitFury and Bitmain,
wallet service Circle, API-provider Chain, the Nasdaq stock
exchange, venture capitalist Fred Wilson, LinkedIn co-founder Reid
Hoffman and others.
was founded in 2014 by Bitcoin Core developers Gregory Maxwell, Dr.
Pieter Wuille, Matt Corallo, Jorge Timón and Mark Friedenbach, as
well as several non-Bitcoin Core developers including
inventor Dr. Adam Back and venture capitalist Austin Hill. Since
its launch, the Montreal-headquartered company also hired
developers Gregory Sanders, Patrick Strateman and Glenn Willen to
work on Bitcoin Core. Another Bitcoin Core developer, Luke Dashjr,
works for Blockstream as a contractor.
Blockstream's main mission is the realization of sidechain
technology, which the company has done with
Blockstream developers typically work toward this goal, which
they say generally aligns with their own long-term vision for
Bitcoin. But developers on Blockstream's payroll - who typically
co-own the company as well - are also encouraged to work on Bitcoin
Core development in a more general sense.
According to Blockstream president Back, this is because "the
company has an interest to see Bitcoin maintained, developed and
scale." Some of Blockstream's developers, like Wuille, work on
Bitcoin Core-specific development almost exclusively.
As part of their contracts, all Blockstream developers also have
time-locked bitcoins to ensure they are incentivized to work toward
Bitcoin's success. These contracts also include so-called "morality
clauses": If Blockstream asks any of them to work against what they
consider to be in Bitcoin's best interest, they can refuse to do so
while still guaranteed a salary.
Since its conception, Blockstream has grown to be one of the
top-funded Bitcoin companies in the space, with total investments
adding up to
from various (institutional) investors including Horizons Ventures,
AXA Strategic Ventures, Digital Garage and, again, LinkedIn
co-founder Reid Hoffman.
Chaincode Labs Inc.
is a New York-based cryptocurrency research and development company
founded by Alex Morcos and Suhas Daftuar in 2014. While the two
founders were not Bitcoin Core developers at that time, they
set-out to research Bitcoin by getting involved with development,
and have done so ever since.
The company is also self-funded by Morcos and Daftuar, meaning
they essentially pay for their own development for Bitcoin Core
through their company. This means that Morcos and Daftuar enjoy
complete freedom to work on whichever project they like, and
however they like.
was founded in 2014 by Bitcoin Core developer Eric Lombrozo and his
father Enrique Lombrozo. The San Diego-based software company is
best known for mSIGNA, an enterprise-level secure Bitcoin wallet,
and CoinSocket, an application development platform.
According to Lombrozo, he contributes to Bitcoin Core because he
believes in the future of this technology, and considers working
with the world's top experts in the field a once-in-a-lifetime
opportunity. Plus: "Someone needs to do it."
Since Lombrozo is both the Ciphrex's CEO and a Bitcoin Core
developer, he can contribute to Bitcoin's reference client in
whichever way he believes is most useful.
$500,000 through a Series A stock offering last year.
Founded in 2011, Shanghai-based Bitcoin exchange, mining pool
and wallet service
is one of the oldest and largest Bitcoin companies in the
To support the Bitcoin ecosystem, BTCC recently
Peter Todd to work on Bitcoin Core for a minimum of 14 hours a
month. Todd is free to work on whichever Bitcoin Core-related
projects he wants, "no strings attached," on the one condition that
he provides a weekly report on his development efforts. The
arrangement will last for at least six months.
$5 million in a Series A led by institutional investors
The entities listed above are the most clear examples of
companies and other Bitcoin industry players funding Bitcoin
development. But it should be noted that this list is not
conclusive, especially because there is significant gray area.
Some companies (such as Bitware Co. and BitPay) fund development
of alternative Bitcoin implementations, of which the code can
potentially be forked and included in Bitcoin Core. Other companies
(including Lightning, Blockchain and, again, Blockstream) fund
development of lightning networks, which is technically not Bitcoin
Core, but is closely intertwined as it works toward the same vision
and mission for Bitcoin.
Developers working for yet other companies (including 21 Inc.
and LedgerX) provide somewhat informal support through
documentation or other help. And, as mentioned, this list is not
And, of course, the "Sponsorship Programme" might add new names
to the list soon.