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Has the Bitcoin Foundation Run Out of Cash?

Posted by timothy on from the why-would-they-use-cash dept.

itwbennett writes The Bitcoin Foundation, an organization that promotes development of bitcoin, is 'effectively bankrupt' and has shed most of its staff, according to Olivier Janssens, a member of the foundation's board of directors. Janssens attributed the foundation's financial straits to two years of 'ridiculous spending and poorly thought out decisions,' adding that the board has tried to remedy the situation by finding a new executive director. Two other board members, however, said the foundation was not bankrupt, though in need of some kind of restructuring.

71 comments

  1. What do you mean "run out of cash"? by Lumpio- · · Score: 4, Funny

    Can't they just mine some more?

    1. Re:What do you mean "run out of cash"? by Anonymous Coward · · Score: 0

      Sure, all they need is free electricity. Which is possible with solar or wind if you already own the equipment, I suppose.

    2. Re:What do you mean "run out of cash"? by Anonymous Coward · · Score: 0

      If they were the One True Bitcoin Foundation, they would have already mined plenty of bitcoins back in the day when it was easier.

      So they must be just some random guys riding the bitcoin fad.

    3. Re:What do you mean "run out of cash"? by Lab+Rat+Jason · · Score: 1

      Um... if they had access to free electricity, perhaps they should sell it, since the whole issue at hand is that bitcoins are worth less than the electricity required to produce them. Call me crazy....

      --
      Which has more power: the hammer, or the anvil?
    4. Re:What do you mean "run out of cash"? by Dragonslicer · · Score: 1

      Or just wait until tomorrow, when the value will go up 25%?

    5. Re:What do you mean "run out of cash"? by Ravaldy · · Score: 1

      That's why you need free electricity. Go solar. :)

    6. Re:What do you mean "run out of cash"? by gl4ss · · Score: 1

      you could still feasibly make more money selling the electricity, that's the point.

      --
      world was created 5 seconds before this post as it is.
    7. Re:What do you mean "run out of cash"? by Ravaldy · · Score: 1

      Sure, I could also make more money doing something completely different with the same money. Like many types of investments, the short term return may appear small but can possibly grow significantly later on due to specialization (result of expertise and established infrastructure). I understand it more or less applies here but I was just trying to make a point.

  2. Of course they can by JcMorin · · Score: 5, Informative

    Of course the foundation can mine more bitcoin, just like you do or anyone can. But it's pretty dam hard in terms of computing power needed. Nobody control Bitcoin and this foundation is nothing more than people with the name, they have no control over the money supply nor the rules that drive bitcoin.

    1. Re:Of course they can by TWX · · Score: 4, Insightful

      So they attempted to ride the coattails of Bitcoin and failed. Not exactly a surprise given that Bitcoin doesn't have a central authority on whose coattails to ride in the first place.

      --
      Do not look into laser with remaining eye.
    2. Re:Of course they can by Anonymous Coward · · Score: 0

      So they just have to put off other people from mining! There, easy mining.

    3. Re:Of course they can by Richard_at_work · · Score: 1

      Nobody control Bitcoin

      I thought there was a big outcry recently that one mining pool managed to get above 50% of the total computational effort, and therefore was in a position to control bitcoin due to the intricacies of the system?

    4. Re:Of course they can by MasseKid · · Score: 3, Insightful

      "two years of 'ridiculous spending" I'm not so sure they failed, depending on what they spent the money on. If they spent it on over paying their board or for boondoggle trips for their board, the people at the top could have come out very well, despite it being unsustainable. If someone wants to pay me 10 million dollars for example, and 2 yeas later I lose my job, I'd hardly call my employment in those two years a failure in regards to my personal fiances.

    5. Re:Of course they can by dimeglio · · Score: 1

      If their goal is to promote the use of bitcoins, then it's job done. Everyone knows about bitcoins - perhaps despite their efforts.

      --
      Views expressed do not necessarily reflect those of the author.
    6. Re:Of course they can by pla · · Score: 1

      The famous "51% attack" requires both malice *and* luck.

      First of all, just hitting 51% doesn't guarantee that you will continue to have a longer available chain than the rest of the network, a hard requirement to pull off a 51% double-spending attack. Until you start getting into the 60 or 70% range, you can at best cheat for a few blocks in a row.

      And since such double-spending becomes instantly detectable and would pretty much obliterate confidence in the network, you would effectively have the ability to double-spend a suddenly-worthless currency. Only someone intentionally looking to destroy BitCoin would waste the resources to control that much processing power, only to make all their high-end dedicated hardware worthless in the process. And before you suggest someone like the NSA could do it - Currently it would take 2.2 zettaflops; for comparison the entire Top500 only pull 309 petaflops, or about 0.007% (no, I didn't misplace the decimal or forget to multiply by 100 there) of the aggregate power of the Bitcoin network.

    7. Re:Of course they can by bbeagle · · Score: 1

      'Everyone' does NOT know about bitcoins. Just had a discussion with several 'normal' 30-something friends a few weeks ago.... talking about how to pay for something online - credit cards, debit cards, pre-paid cards, gift cards, etc. Then I joked 'what about using bitcoins?' Every one of them asked 'What are bitcoins?' A few heard the term before, but most did not.

    8. Re:Of course they can by Richard_at_work · · Score: 1

      I wasn't talking about double spending attacks, I was more talking about a single mining entity having a greater power over setting the target and difficulty numbers because they essentially have a greater vote in setting it.

    9. Re: Of course they can by Anonymous Coward · · Score: 0

      Absolutely

    10. Re:Of course they can by JesseMcDonald · · Score: 1

      The target and difficulty aren't set by voting, they're set based on the time required to mine the last 2016 blocks—which should be about two weeks at the nominal target of 10 minutes per block. More than two weeks and the difficulty decreases; less than two weeks and it increases.

      The biggest problem with the concerns over a mining pool having over 50% of the hashing power is that the pool operators are only coordinating the effort; they don't actually own all that hardware, and the owners can decide independently which pool(s) to slave their mining rigs to. If a pool operator tried to abuse their position the fact would be noticed, and miners would quickly switch to some other pool.

      There is also no reason why individual miners couldn't track transactions as they're broadcast like any full node and validate the candidate blocks the pool sends out, rejecting any which involve possible double-spends or other attacks. I don't think they do that currently, but only because none of the major pool have tried to abuse their position that way.

      --
      "The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
    11. Re:Of course they can by Anonymous Coward · · Score: 0

      That is in incremental problem with no magic threshold. Middlecoin used to catch shit for the same thing on altcoins but it doesn't suddenly magically become an issue at 51% and not so much at 49%.

      That's a fundamental problem with ALL SHA256 based coins at this point, and practically speaking: SCRYPT and SCRYPT-N as well. I don't know if anyone has bothered making Darkcoin asics or whatever weird shit people are wasting their electric bill on these days. I got disillusioned with mining after wasting 2 days mining COINYE and a week mining DEFCOIN. It got obvious that altcoins jumped the shark when I was downloading a new virus laden miner application once a month.

    12. Re:Of course they can by marcello_dl · · Score: 1

      > a failure in regards to my personal fiances.
      that's what they said.

      --
      ---- MISSING MISCELLANEOUS DATA SEGMENT --- [sigdash] trolololol
    13. Re:Of course they can by Anonymous Coward · · Score: 0

      It was a joke, mister.

    14. Re:Of course they can by Anonymous Coward · · Score: 0

      And then you replied, it is this awesome form of electronic money that is not backed by any form of government or many government regulations at all. You don't get any type of fraud protection or purchase protection. You don't get any "points" or miles, you don't get any extended warranties, you do not get a nice simple single bill at the end of the month. There is no customer support number if you need something, you can't really use it anywhere, well there are a few places. The value of it swings like a fishing boat in the rough seas so you might lose some real money unless you can time it right. Your 30-something friends were like wow, that sounds awesome, sign me up!!!

  3. Now is the time to invest! by derideri · · Score: 0

    Now is the time to invest in the Dunning-Krugerrand!

  4. HAHAHA!!! IRONY... by Anonymous Coward · · Score: 0, Troll

    Ironic, that the Bitcoin "foundation" is funded with real money while it promotes its fake coins!

    1. Re:HAHAHA!!! IRONY... by Anonymous Coward · · Score: 1

      I don't know, is it irony, that to make a compiler with a new language for that new language, you first have to make a compiler for that new language in another language?

    2. Re:HAHAHA!!! IRONY... by TWX · · Score: 2, Insightful

      Would you accept a wildly volitaile, difficult to spend scrip that could be taxed at its highest exchange point or possibly even banned without any recourse, as your salary?

      --
      Do not look into laser with remaining eye.
    3. Re:HAHAHA!!! IRONY... by Anonymous Coward · · Score: 0

      I bootstrap my compilers on noise.

    4. Re:HAHAHA!!! IRONY... by g0bshiTe · · Score: 1

      As ironic as promoting paper currency with real gold to back it.

      --
      I am Bennett Haselton! I am Bennett Haselton!
  5. here's the benefit by slashmydots · · Score: 4, Insightful

    "two years of 'ridiculous spending and poorly thought out decisions.'"
    So they're morons. Here's the difference with bitcoins. These people have no control over the system, your wallet, your loans, your car title, your mortgage, your country's exchange rate, etc. They can be as stupid as they want without really affecting bitcoins.

    1. Re: here's the benefit by Anonymous Coward · · Score: 1, Insightful

      Right, because when mt gox (and others) went down in flames, that didn't affect the overall bitcoin economy... ...except for all of those people who trusted them to keep the money safe and lost all of it.

      Make no mistake: Bitcoin inherited all the bad stuff from the "real world" economy - the con artists, the corruption, the scheming - without any of the oversight.

      You can do all the shit you want, and your liability end after you say "sorry". Not even the largest bank would get away with that.

    2. Re:here's the benefit by peragrin · · Score: 0

      No foundations no updates, no updates means no patches. Means no expansion as bitcoins run out.

      As it is you need to measure goods in the ten thousands of a coin. I can't wait to buy a pack a gum for .0000003 bit coins.

      --
      i thought once I was found, but it was only a dream.
    3. Re: here's the benefit by Anonymous Coward · · Score: 1, Insightful

      >Not even the largest bank would get away with that.

      They get away with worse. When Mt. Gox steals your money, someone else has it and spends it. Nobody else has to chip in to deal with your stupidity for trusting scumbags.

      When a bank self-destructs, the government rushes to their aid, printing money to keep them afloat. A lot of it. Enough that the money of people smart enough to avoid trusting scumbags is no longer worth as much as it was before the scam.

      In other words, bitcoin lets the smart person keep their money. Fiat lets the fool take from all the smart people so he doesn't starve. Which wouldn't be so bad if a bank actually had feelings and *could* starve.

    4. Re: here's the benefit by OhPlz · · Score: 1

      Considering that bitcoins were new and so were the companies involved with them, how would the average individual have determined which companies were trustworthy and which weren't?

    5. Re: here's the benefit by Anonymous Coward · · Score: 0

      You argument doesn't hold water.

      When Mt Gox imploded, there was an immediate, sharp, drop in the trading value of bitcoins.

      People - even those that consciously avoided the scumbags - lost money (or rather, their property lost a ton of value, which is about the same thing). Bitcoins are no different than banks or large corporations here.

    6. Re:here's the benefit by Anonymous Coward · · Score: 0

      They've posted a rebuttal, how much truth it contains, I have no idea. http://blog.bitcoinfoundation.org/the-facts-about-the-bitcoin-foundation/

    7. Re: here's the benefit by Anonymous Coward · · Score: 0

      Yes; heaven forbid we keep people from starving.

      "You put your money in a bank?!? You fool! It's such a shame that the government won't just let you die."

    8. Re: here's the benefit by Anonymous Coward · · Score: 0

      Unlike keeping cash under your mattress, keeping your bitcoins in your own wallet is trivial and vastly more secure.

    9. Re:here's the benefit by jythie · · Score: 1

      They can only be as stupid as they want because BTC is of minimal importance and influence on people's lives.

    10. Re: here's the benefit by Anonymous Coward · · Score: 0

      Yes; heaven forbid we keep people from starving.

      "You put your money in a bank?!? You fool! It's such a shame that the government won't just let you die."

      Exactly. It is a shame.

      It's a shame that when people fall foul of some risk, we rely on the threat of violence to help these people. It's a shame that charity has been replaced with vast systemic theft.

      If you want to keep people from starving then please feel free. Just don't steal from me to do it. Try to recognise that we have different opinions and at least respect my peaceful ways enough to not do violence against me.

    11. Re: here's the benefit by Anonymous Coward · · Score: 0

      Other exchanges besides Mt.Gox were always trading coins at a much lower value. So unless you successfully(!) cashed out at Mt.Gox your coins never actually had the Mt.Gox value. Just because Mt.Gox listed $1000 for a coin doesn't mean you could get $1000 for a coin at will.

    12. Re: here's the benefit by DrXym · · Score: 1

      Which is of course why the exchange rate tanks every time one of these supposedly secure exchanges collapses or disappears with your money. It doesn't matter how fastidious with your own bitcoins, their effective purchase power is still fucked over by all the cons, scams and general incompetence. People lose confidence in the system and bailout.

  6. Inconceivable! by Anonymous Coward · · Score: 1, Insightful

    A group organized to prop up a currency whose entire purpose was to be untrackable and uncontrollable turned out to be filled with fraudsters and the financially incompetent who thought they could make a quick buck from untrackable, uncontrollable currency?

    Inconceivable!

    1. Re:Inconceivable! by Anonymous Coward · · Score: 4, Informative

      "untrackable"

      This is false. Literally every transaction ever in the bitcoin network is available to the pubic via the blockchain.

    2. Re:Inconceivable! by Applehu+Akbar · · Score: 1, Funny

      Been hitting the colloidal silver again, have we?

    3. Re:Inconceivable! by ComputerGeek01 · · Score: 1

      Hey now, that's no way to talk about the FDIC!

    4. Re:Inconceivable! by jones_supa · · Score: 2, Insightful

      Untrackable to individuals.

    5. Re:Inconceivable! by gaudior · · Score: 1, Funny

      Nope. It's the chemtrails, man, the chemtrails!

    6. Re:Inconceivable! by beernutmark · · Score: 1

      Apparently not many reddit readers here that recognize this delicious copypasta.

    7. Re:Inconceivable! by Anonymous Coward · · Score: 1

      The reactions to this post (And this thread) illustrate just how out of touch Slashdot is with the general internet community. (This post is some freshly minted copypasta from some crazy bittcoiner having a tantrum. He tried to donate 30 cents worth of magic internet money to a charity and, and they asked him for real money instead)

      The cryptocurrency community is in full meltdown mode. Just about every day we hear about a big player, exchange, etc folding as it becomes clear that they were incompetent, or outright scams. (Mostly scams. Usually of the ponzi variety) Mt Gox was just the tip of the iceberg.

      Most people have jumped ship. All thats left is the true believers and similarly crazy. - The above post is a representative example.

      They only cryptocurrency currently worth holding on to? Dodgecoin. Yeah. The joke cryptocurrency. - Turns out a cryptocurrency is useful if you have a cooperative community that just wants an alternate currency for internet related activities... Free of the crazies that think they're going to topple governments with racks full of gaming video cards. (Yeah I know GPU mining is now inferior to the new specialized chips, but you get the point)

    8. Re:Inconceivable! by GrumpySteen · · Score: 1

      You've got it all wrong, man. It's the fucking rainbows!

  7. You can help by ArcadeMan · · Score: 0

    Click in the links in my signature and get some Dogecoins and fractions of Bitcoin for yourselves.

    It doesn't help them, but it sure helps me!

    --
    Get free satoshi (Bitcoin) and Dogecoins
  8. Silly Sheep by Anonymous Coward · · Score: 0

    Obviously they're just cash poor, when bitcoin hits $1,000,000 we'll see whose laughing then!

    1. Re:Silly Sheep by Anonymous Coward · · Score: 0, Troll

      The closest Bitcoin will every get to 1,000,000 is 1,000,000 BTC to $1.

  9. Soap Box (Re:Inconceivable!) by Anonymous Coward · · Score: 0

    The cryptographers, the I.T. geeks, the software and web programmers/developers, Tesla, Willheilm Reich..... I'm going to try one more time. https://circle.com1/ [circle.com1] or https://snapcard.io2/ [snapcard.io2] (under 10 minutes)||| https://bitpay.com3/ [bitpay.com3] or https://coinbase.com4/ [coinbase.com4] (show developers of the organization). I can hardly believe this is your response.

    Didn"t I read this somewhere...? Oh, yeah, on the label of Dr. Bronner's Soap!

  10. Re:NO MORE!!!!! by pantaril · · Score: 2

    Can we just all agree that this was over before it started and move on? I'd hate to have to write a script to remove any articles with BitCoin in them from view like I did with the Kardashians...

    No but maybe you can write me a script to remove all your unnecessary comments from bitcoin articles?

  11. Re:NO MORE!!!!! by Anonymous Coward · · Score: 0

    I disagree. Slashdot would be better of without Bitcoin news. It saddens me that the supposedly "smart" group of people who frequent this site has fallen for the sham that is bitcoin.

  12. Is all their cash in Bitcoin? by Anonymous Coward · · Score: 0

    In the span of a few minutes: They're broke! They're rich! They're poor! They're rich! Cash in! Cash in! Too late, they're broke!

  13. hey, just swipe a wallet by swschrad · · Score: 2

    everybody's doing it...

    --
    if this is supposed to be a new economy, how come they still want my old fashioned money?
  14. Real time saver by TheCarp · · Score: 3, Informative

    I have to say, its nice to know Slashdot respects Betteridge's law, it would be a waste of time afterall to have to read past the headline to know that they have, in fact, not run out of money at all. If they hadn't clearly indicated that in the headline with the '?' which, in headlines answers the question with an implicit no; then I might wonder if it was true or not and have to read further.

    --
    "I opened my eyes, and everything went dark again"
  15. Re:NO MORE!!!!! by Anonymous Coward · · Score: 0

    Really? I'm a huge bitcoin supporter and come here to read just because the comments are so negative. If not for Slashdot, I'd look for another site full of aging coders who can barely stand cryptocurrency.

  16. It casts a shadow over everything. by westlake · · Score: 1

    They can be as stupid as they want without really affecting bitcoins.

    Bitcoin remains a very big question mark for many --- the faintest hint of fraud or failure surrounding it is damaging.

  17. Re:NO MORE!!!!! by Anonymous Coward · · Score: 0

    Yours would go right along with them. Every Bitcoin article of late (e.g. the past 8 months or so) is another story about how someone either: lost all their money, a company went belly up without a forwarding address, someone was scammed or some other subterfuge. Give it up. Bitcoin is not the droid you are looking for. Move on. And his comment about the Kardashians is an apt analogy. Both are big wastes of time and money who deliver nothing of value except for those closest to them.

  18. Re:NO MORE!!!!! by kaizendojo · · Score: 1
    Ha ha! That's really funny!! Take you awhile to come up with that pithy comment?
    Can you now comment on the substance? Here's a list of a few of the latest Bitcoin articles on /.:

    Has the Bitcoin Foundation Run Out of Cash?

    Bitcoin In China Still Chugging Along, a Year After Clampdown

    Silk Road Investigators Charged With Stealing Bitcoin

    Evolution Market's Admins Are Gone, Along With $12M In Bitcoin

    California Looking To Make All Bitcoin Businesses Illegal

    uTorrent Quietly Installs Cryptocurrency Miner

    One Year Later, We're No Closer To Finding MtGox's Missing Millions

    Darkleaks: an Online Black Market For Selling Secrets

    Another Bitcoin Exchange Fraud

    Alleged Bitcoin Scam Leaves Millions Missing

    So tell me why Bitcoin should be 'still a thing'... besides a cautionary tale?