Every time there is a crisis in the Bitcoin world, one entity is always blamed for either a lack of action or an illogical mistake. The Bitcoin Foundation has been under fire since its beginning–questions about the necessity of a centralized organization for a decentralized system and conflicts of interest between board members are the fodder of rants on reddit and the forums. Let’s take a look at some of the actions–good and bad–by the Bitcoin Foundation leadership.

The Good

Patrick Murck’s Senate Talk–One of the most undeniably positive actions the Bitcoin Foundation has done was to lead a successful talk in US Senate committees which led to the conclusion that Bitcoin is not a technology that is to be stymied but one that should be supported and nurtured by US regulatory practice. Patrick Murck did a great job of delivering the idea that Bitcoin is not exclusively used for illicit purposes. Despite this success, it’s important to note that the results from this hearing are far less than tangible and represent a single win on the long path of the regulatory journey that Bitcoin will inevitably face as it continues to grow.

Payment of Developers–Since January of 2013, the Bitcoin Foundation announced that it would officially pay Gavin, the chief scientist and a lead Bitcoin developer, a salary in bitcoins. This salary is pegged monthly at a dollar amount and converted to bitcoins to adjust for volatility. This is an important step because it supports one of Bitcoin’s most prolific developers to focus his effort on the development of the protocol itself without having to worry about money and other jobs. Although this salary is critical to the continued growth of Bitcoin technology, it is a

Grant Program–One of the more recent movements by the Bitcoin Foundation has been the implementation of its technology grant program in which development ideas are funded from Bitcoin Foundation money. The Bitcoin Foundation has touted its award to the independently hosted online bitcoin wallet Coinpunk. Instead of the majority of membership fees that the Bitcoin Foundation earning every year going directly into the pockets of the board members, it’s nice to see some money being routed to notable projects for the Bitcoin ecosystem. Coinpunk is certainly an ambitious and noble project, but it has been one of very few grant awardees. Furthermore, the awardee selection process is opaque and slow, making this arm of the Bitcoin Foundation merely a wimpy Bitcoin accelerator.

Bitcoin 2013 Conference–Conferences are a blast. They generate hype, press attention, and a positive attitude on the outlook of Bitcoin. This is certainly a good move for the Bitcoin Foundation for the purpose of improving general public relations for Bitcoin in general and stirring up the community.

The Bad

The Lack of Response to MtGox–It was bad enough that Mark Karpeles was a board member, but it was even worse that the board’s level of communication and involvement in arguably Bitcoin’s biggest disaster ever was nonexistent. The Bitcoin Foundation should have been the group leading the charge into the investigation of the entire affair, giving status updates and interrogating Karpeles on the situation. It’s an embarassment and a shame that the Foundation sidestepped the matter to simply let it blow over.

Tainted coins–A proposed idea that was tossed around by forum members and leaders in the Bitcoin Foundation was to work with governments on creating tainted coins databases (redlists), making it illegal to trade with certain addresses or accept certain outputs because of a coin’s association with a known criminal activity. Not only is this idea impractical to scale across the Bitcoin network, it is completely subversive to Bitcoin’s fundamental ideals of decentralization. This idea was thankfully tossed, but for it to be even considered is an indication of the lack of qualification among the Foundation membership.

The Ugly

While “The Bad” covered specific examples of the Foundation’s ineptness, this section explores more general trends that make the organization hopeless.

Power hungry members–In the words of former business board member Charlie Shrem, the main concern of members of the foundation is the “power trip” of those hoping to control the foundation’s money. “No one in the Foundation has any balls anymore” to step up and take action. Whether or not you believe Charlie to be a fraud or evangelist for Bitcoin, his position as a founding member of the organization displays the truth in his words. When the Foundation is in charge with such a large amount of money, it is difficult to remove greed from the equation. This is why I believe that the control of the funds of the Foundation should become more transparent and be controlled by blockchain technology.

Transparency: monetary–The Chairman of the Board, Peter Vessenes, is technically also the Treasurer of the organization. While I admire the Foundation’s earlier efforts to not use a bank account and rely soley on bitcoin, it is appalling that there is little communication on how much money the organization has and what percentage is going to what destinations. As the foundation for one the most transparent currencies in the history of currency, it is ironic that there hasn’t been a single report released about the financials of the Bitcoin Foundation. If anything needs to change, this must be first.

Transparency: communication–The web forum of the Bitcoin Foundation are closed to the public for contribution. This is outrageous–if the foundation is supposed to be a medium of communication, the face of Bitcoin, why limit its voice to those who have the money to pay for a membership. This is only an indication of the lack of communication that exists between the Foundation and the public community. It goes both ways: the Foundation has failed to properly inform the community on situations critical to Bitcoin’s future (such as the MtGox crisis) and it has also failed to accept the input of the community.

What’s the solution?

There are two options.

Option One: we can simply ignore the Foundation. Stop giving it money, stop paying it attention. The less the community complains or blames this organization, the less important it is and the more attention that can be paid to more critical events and groups.

Option Two: we reform the foundation. I believe that the Bitcoin Foundation should be modeled after Bitcoin and exist as a Decentralized Autonomous Organization in which votes are publicly held and recorded on the blockchain and spending of funds is limited by smart contracts. Ethereum already has a model for scripting such organizations and any effort into building governing systems based on Bitcoin will be a further contribution to the development of the ecosystem of Bitcoin to be more than a payment processor.

If the Bitcoin Foundation wants to restore its reputation and truly contribute the ecosystem, it needs to make radical changes.