The Bitcoin Foundation: Some Questions

March 11, 2014 10:31 UTC

I’ve just spend a pleasant evening, nursing a cold beer, looking over The Bitcoin Foundation’s posts and educating myself as to who exactly these people are and what they are bringing, or at least claiming to bring, to the table. Now, I’ve never claimed to be the sharpest knife in the proverbial drawer and for that particular reason I’ve decided that I will take this task slowly and stop to ask a few questions whenever I happen to find myself starting to feel confused. Clearly, the foundation has been put there for our betterment and for that reason I hope you will bear with me on this short journey of discovery.

The foundation’s website states the three primary objectives for fulfilling Bitcoin’s mission to achieve its potential.

Bearing in mind the three stated objectives of: Standardising Bitcoin, Protecting Bitcoin and Promoting Bitcoin and accepting that “Cryptography is the key to Bitcoins success. It’s the reason that no one can double spend, counterfeit or steal Bitcoins. If bitcoin is to be a viable money for both current users and future adopters, we need to maintain, improve and legally protect the integrity of the protocol.” Here is the first question:

The problem of Transaction Malleability has been known about since 2011, so why did the foundation not move to address this issue before the criminals began to exploit it during 2013?

Under the title of “What I hope the Foundation will accomplish“, Jon Matonis states: ” There’s a huge amount of support for the Foundation from many of the people who matter to Bitcoin’s future: Charlie Shrem, Mark Karpeles, Gavin Andersen and Jon Matonis are all starting out on the Board of Directors”. Unfortunately, Mark Karpeles resigned in 2014 as a result of the spectacular collapse of Mt Gox and his far from glorious role in that collapse and that Charlie Shrem resigned following an alleged link to illegal drugs trading. I am pleased to state that the two other directors, Jon Matonis and Gavin Andersen are people of the highest moral character, but:

Bearing in mind the importance of the foundation, (self stated!), how carefully did the Foundation select it’s directors and did anyone check the history of the newly appointed directors, Karpeles in particular?

It has been alleged that in 2011, Mt gox made an appeal to the community that 400,000 bitcoins had gone missing and asked for help. It was decided to provide that help. 150,000 of the missing bitcoins were recovered in 2012 and the plan was to continue this support in 2013 but the sudden, and somewhat unexpected, increase in Bitcoin price during 2013 raised the cost of fixing the problem from a somewhat manageable $3M to a completely unmanageable $15M. A blogger posting on Reddit, disclosed in November that he, could deposit coins with Mt Gox and then withdraw more than he had deposited. Question number 3:

Had the Foundation been bailing Mt gox out since 2011, if so, how much in total was spent? Who was told, who made the decision and was that decision influenced by Karpeles status within the Foundation and how much in total was lost?

During the collapse of Mt Gox and accepting the volume of the losses:

Did the foundation have access to make withdrawals on a priority basis when other investors were being denied this right?

Finally, as we have gone through a period of monumental losse, and poor publicity,  a period affecting ordinary investors:

What actions will the Foundation undertake, going forward, to ensure a future for not only the Foundation, but also Bitcoin; what have we learned from the Mt gox debacle?

I would be grateful to have these small points addressed to ensure that confidence is restored and knowledge gained.

Last modified: March 11, 2014 10:42 UTC

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