Minutes of the Regular Meeting of the Board of Directors of The Bitcoin

Held: October 20, 2015

Present:

Brock Pierce

Jim Harper

Bobby Lee

Olivier Janssens

Absent:

Micky Malka

Elizabeth Ploshay

Staff Present:

Bruce Fenton-ED

Amy Loughran-Dolan-Director of Operations

Call to Order and Introductions:

Brock Pierce, Chair called the meeting to order at 11:05 AM. We will proceed without Micky Malka, Elizabeth Ploshay, and Olivier Janssens who are absent. Elizabeth has appointed Brock her proxy in the occasion of a vote. Olivier joined at 11:25 AM.

Documents Distributed for the Meeting:

Agenda received from Brock this morning. It should be stated that no board member has any last-minute additions. Bruce has distributed financials.

Financial Update:

Brock says it looks like we are close to running out of money. Bruce says yes, we need to do serious fundraising. There is not a lot of revenue sources because the industry has tightened their belt a bit. We only had two $1,000.00 sponsors for DevCore. Revenue is key, we can’t do much more to cut expenses.

In reviewing financials, Brock says that it looks like things were going well from a revenue standpoint until February and we’ve lost the remaining cash since then. Most of the capital was burned up by past commitments from prior to Bruce coming onboard as ED.

Bruce says we had outstanding commitments with a number of vendors, past employee expenses, paid vacation expenses, legal work expenses. The British Mazars office unwinding is an example. We had to do what we contractually agreed to do. Our current expenses are Amy, who is almost full time, and Jody who is part time. We also have some very minor ongoing expenses such as the website, etc. Jim would like to discuss the disputed expenses for DevCore London. He says there are $12,000 in Patrick’s expenses, just for going to London Bruce says we haven’t heard from Patrick in regards to it and so therefore Bruce hasn’t prioritized it. He doesn’t see that there’s a rule on how long they wait to be reimbursed. Bobby said he believes the rule was that they had to be reimbursed within a quarter. Based upon his discussions with Jody, so far it’s undetermined. Bruce says Peter had debt to the Foundation of $18,000. He says we owe him 10K for outstanding travel expenses but he never invoiced us. Peter wants to call it a wash but his expenses claimed are undocumented.

It’s unclear what had Peter owing the Foundation. Bruce said it’s muddy and one of the challenges is that the staff that would have been able to track it down are gone.

Bruce also feels like there maybe some Foundation Bitcoin lost and floating around. Brock says there are some blockchain analytics companies, it may be worthwhile to have them look at the foundation wallets in case there is bitcoin missing.

The Foundation received one of the first Avalon Miners and it should have produced a good amount of coins. Brock said it would have been less coins, based upon his experience. Bruce says if we spend time trying to track down old coins, it would be difficult to get them back. Bruce says the biggest factor in our finances is that the bitcoin price plummeted a great deal. The second factor is overspending by past Foundation regimes. Bruce doesn’t think there is much he could find based upon conversations.

Bruce says a lot of the early control were in the hands of people who are difficult to contact now.

Jim says it doesn’t seem to make sense to look back.

DevCore Recap:

Bruce says this event made some money, we do have to pay travel for some of the speakers. That amount is hopefully approximately $1,000 per person. Brock asked the status of profitability. Bruce says we either made a little or lost approximately $1,000. If that’s the case, Bruce considers it a great success considering that there are not many people in this industry that could get a group like that together. If the economy turns, additional sponsors could make a huge difference next time.

Brock wants to know if the media paid attention to the event. Bruce says there was a good media attention, a few good articles out there. As a result of DevCore we gained about 35 new members, and also some donations at the end. This means more critical mass and more people we have on our mailing list. One company promised they would buy a corporate membership at the end of the event. Goodwill amongst the speakers was good. People came away with a positive view of DevCore and the Foundation. There was a good diverse crowd, and diverse speakers. We have requests to do another DevCore. Bruce would like to do one in Europe. Bruce says getting speakers are challenging. We could go with developers already in Europe in order to save travel expenses. Bruce said DevCore was as much work as a large conference and he won’t have the time to dedicate that much planning time in the near future. That said, he realistically thinks he could do approximately 2-3 annually based upon current staffing levels. Bruce proposes that we should get a membership director position going, commission only. This would be a role for a younger person just starting out in the bitcoin industry, such as a student, who wants to make commission. We could pay them some percentage of the sponsorships or memberships. They would get significant contacts and exposure to the industry. We have some volunteers who may be able to help with some logistics for DevCore, people who run Meetups. Perhaps we could do a DevCore Format for our annual meeting, maybe make it two days with 15 developers.

Jim wants to know how he thought ticket sales went, vs expectations. Bruce said he thought sales were good. He was hoping for 70 people. He says it is a specialized audience because the topic is very specialized. We had 110, which he thought was a perfect size. Jim wants to know if we should discuss informal DevCore approval to move forward. Brock agrees we should go forward with them. it makes us a valuable contributor to the ecosystem. Brock wants to know what we do next and what we do to improve performance. Bruce needs to think on it a little bit more. He thinks it’s more valuable if we concentrate on development. If we make it larger for the Boston event, we can wind up with a few hundred people. We need to vary the location. Iit’s a bit more tricky if it’s in Europe and Asia. Brock suggests that we look at the schedule of events coming up over the next year, and piggyback on another larger event.

Brock says if we are looking for someone who would cover all the operating costs with some sort of profit share, he may have a few ideas. He can have a conversation with the Inside Bitcoin people, if that’s something we want to pursue.

Bruce says the sponsorship market may turn around a bit if the current economy turns around a bit. If Bruce had help recruiting, it may be more lucrative. Brock suggests a commision paid person, for a role such as this.

Brock wants to know what our next step is on DevCore. Bruce says digesting feedback on this one and brainstorming future locations. Quality speakers is key. Brock says ideally we could put the event where our largest sponsor is. Bruce says the Meetup person who inquired is in Europe and they have the space. Brock says the Meetup people are used to running events and perhaps they could help run it.

Bruce says the other idea he’s considering is doing an online version of DevCore. It would be easier to get people because they wouldn’t need to travel. A skype meeting type event. He thinks it would be well attended.

Industry Self-Regulation:

Bruce says Jim brought in a relationship with someone from EFF. In our industry there are a few groups working on regulation, but the majority are more pro-regulation than our members. The majority of our board are not fans of regulation. The strategy of EFF is to go to the regulators and ask them not to regulate at all and provide reasons and evidence why. They are asking us to write a letter and have 10 or 20 CEO’s in our industry sign it, showing that instead of regulations, it can be up to the industry to adapt things such as a multi sig wallet, proof of reserves, etc. We could collaborate on it as a board and Bruce could present it to some CEOs. EFF would do quite a bit of work on it and bring it to our regulators on behalf of us. Bruce’s believes that perhaps 85% or more of our individual members in particular, are anti-regulation. He thinks that aligning with EFF is a great thing, in order to represent our members’ interests. It’s a small ask, just a letter and 20-30 calls to CEOs.

Jim wants to explain that it’s not necessarily a letter we would be providing from the Foundation. EFF wants to be able to say this is a responsible industry, and we are a group helping to organize principles. The signatories would be a high-level statement of business practices, self-certified. With that sort of thing in place, Jim would be hesitant to put out a letter, rather Rainey (EFF representative) would like to point to what the Foundation is doing for the industry in terms of self-regulation. Jim would hesitate to send a letter that would have the Bitcoin Foundation directly address regulators. He would prefer to SHOW a good thing instead of SAY a good thing. Bruce said we would show, here are the best practices in the industry, to self-regulate. Jim says he doesn’t think we need to dedicate the Foundation to be deeply involved, but we could show our responsibility.

Olivier wants to know if the letter is written by the foundation, or written by EFF. Bruce says there would be two letters, one the Foundation writes, and one that EFF writes and presents to regulators. Jim suggests maybe we could publish a letter on the website, not send a letter.

Olivier wants to know if the best practices would be controversial. Jim says the idea would be for them to be non-controversial, for example, multisig, ordinary consumer protection types of things. Olivier would want to see what that list would be, he wants it noted that he doesn’t feel like we should have to defend ourselves to government regulators.

Bruce personally agrees with Olivier in terms of not feeling like we should explain ourselves to regulators. Bruce explains that his public opinion of regulation has shifted a bit being in this role, because he is conscious of not coming across as extremists or controversial, but he thinks this is a good balance. He thinks EFF brings some quality to the discussion.

Brock is supportive with working with the EFF, he is close to one of the Board members and could get involved. Olivier is also supportive with the EFF, he would prefer that the letter be signed by the individual members themselves, and not as the Bitcoin Foundation representing everyone.

Bylaw Revisions:

Jim spent some time reviewing the bylaws and, recalling prior conversations about removing vestiges of the old foundation, he put together a list of amendments to do that. As to electing an affiliate director, Jim’s proposed revision of the by-laws would not give affiliates the status of members, but affiliates would get to nominate a candidate for the affiliate director election just like members do, then vote on that director like members do in their categories. In parallel to the individual and industry seats, it is not a requirement that the nominee be a member of the affiliate or of the foundation.

Jim thinks we should let them determine their own processes, relying on our points of contact to vouch for their decision-making in that regard. Same goes for rendering their votes. It’s a small enough group that individual conversations would seem to be fine for sorting out problems. Olivier wants to know if we even have affiliates. It’s not clear who the affiliates are, at this time.

Bruce says he didn’t get great information when he assumed his role at the Foundation. There also isn’t really a way of figuring that out, due to the employee turnover. There was a decent transition document with passwords, but other key info is missing. Brock says if 10 people show up and says they are a chapter affiliate and they want to run a seat, do we have any way of verifying the info? Bruce feels that anyone can run but the harder part is the voting list.

Jim said it could be as low as five affiliates, and as high as seventeen. Jim thinks he can get some information on people who have worked with affiliates in the past. Brock says the election should be high priority. We need to get the announcement out, so the election can get going.

Bruce says we have to be careful to adhere to a standard of transparency on what they do, and how they do it. Bruce says if the election isn’t done right, it could hurt us. He feels we should research more and delay the affiliate election.

Brock agrees that we should delay the affiliate election and delay the general election.

Bruce stresses we need to raise revenue, we need about $100,000 to keep operating for a full year. Brock asks if each board member is comfortable with a commitment to raise $10,000 before the next board meeting? Bruce says he will put in $10,000 of his own personal money, if it looks like we will reach the 100K mark, but he is not willing to make a personal financial commitment if there is not additional commitment from others. Bobby says yes, he can make the commitment. Jim says he will do what he can. Olivier says he is unsure that the Foundation image is restored enough to raise that money. He’s not convinced and confident that we are doing enough good, so he says he will refrain from making that commitment for now. Brock says we are the Foundation, we have no resources, this is us, if you don’t like the foundation as it stands, you don’t like yourself. He says each board member should be prepared to do the work themselves, to keep the Foundation going. Olivier likes what Bruce is doing, it’s mostly that he doesn’t know if we can restore our reputation towards individual members. He thinks the media still believes we represent Bitcoin, and that we will eventually fall back into perpetuating that image again. We would be politicizing bitcoin.

Jim feels that instead of beating Olivier up, we should let him evolve into the decision on his own. He feels like it will be a welcome barometer when Olivier moves to a supportive position. He says if others do the fundraising at the moment, and it gets to the point where Olivier is on board, then it means the Foundation is in a good place. Bruce would like to speak with Olivier later, aside from the Board call. He thinks he did the things Olivier wanted him to do early on to improve the foundation reputation. Olivier says he would be happy to do it. Olivier states that he is not against the Foundation but he’s also not completely for it, because of concerns. He will certainly work with Bruce.

In regards to transparency, Olivier is happy with the minutes but hasn’t seen any financials posted online. Bruce and Amy have been busy with DevCore, but will get them up.

Approval of Minutes:

On motion made by Jim, seconded by Bobby, and carried, the board approved the previously distributed minutes of the meeting of the board.

Meeting adjourned by Brock Pierce at 12:18 PM

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10.20.15 Minutes of Regular Meeting of the Board of Directors of The Bitcoin Foundation.