Peter Vessenes Jan 09 2013

Happy New Year! As we’re embarking on 2013, I wanted to spend a little time reviewing what we’ve done since September, and then laying out some plans / predictions for 2013.

Accomplished Goals
One of the main ways the Foundation can help Bitcoin in 2013 is resource centralization and disbursement; we’ve done some of that so far, and we’re working on more.

We’ve hired Gavin as Chief Scientist of the Bitcoin Foundation; he’s being paid a regular salary at this point, and is working full time on Bitcoin client and protocol enhancements. This is a major step forward for solidifying the future of the Bitcoin network.
We’ve made our first technology grant — to the core development team — for build and test servers, windows signing certificates, and a few small sundries.
We’ve opened up a grant proposal process to anyone who wishes to apply for a grant that could further Bitcoin in some way. The deadline is February 15, 2013 — please put in a proposal!
Announced our first conference, Bitcoin 2013: The Future of Payments, for May 17-19 in San Jose.
We had a first meeting with the United States’ Government Accountability Office to talk to them about how Bitcoin works. Our brief, productive meeting was a high-level conversation about how Bitcoin fits into the emerging virtual currency space.
Member Review
We continue to get more and more members signed up — over 240 at last count. I really appreciate everything you’re doing for the Foundation, and Bitcoin in general. We’re still working out how to best help our members, and I hope we’ll get more knowledgeable about what you all want and need from us this year. We are off to a good start, though, I think.

We put in place real name forums for members only (if you’re a bitcointalk member and wonder what it’s like, it’s polite and low traffic, plus you can spend time trying to figure out the real names of famous bitcointalk’ers). We’re learning to use this to discuss Foundation plans and procedures; I anticipate use of this will grow organically in 2013.
We are going to put up a members page on the site shortly. It’s long overdue. Apologies.
We’ve incorporated feedback about the corporate membership prices and benefits, and will be rolling out some improvements soon.
Going Without a Bank Account
We spent 2012 without a bank account; it was a fun experiment! We can’t do without one in 2013, unfortunately. Payroll taxes have to be paid, and some of our deposits for the conference are too large to do with our current systems. We did work out some basic protocols for accounting and expense reimbursements in Bitcoin, and we’re putting together a white paper as a set of basic process recommendations.

Also, we continue to denominate our employee salaries in Bitcoins; we’re currently re-pegging them quarterly. They’re generally happy with the arrangement so far.

Transparency Opportunities
Many of our members have asked for more foundation financial transparency. I’m all for it, in fact I championed publishing all of our public addresses with the Board at launch. The Board voted against it, and in process changed my mind; they noted that there are significant privacy issues publishing these addresses; we will be leaking information about our members by allowing people to backtrack payments to the Foundation. I’d like us to chat about this in the forums and decide what we want to do about it; I fundamentally believe this is a member decision to make, so sound off here if you have thoughts on this.

I anticipate we’ll file a US form 990 which will provide a bunch of standard financial information that the US government requires from non-profits; if so, that will be easy to access for anyone on the Internet.


Significant Investor Interest
I am fielding more phone calls from investors in the last quarter; Bitcoin as an emerging marketplace seems likely to be getting significantly more attention in 2013 from Venture Capitalists. 2012 was the year of Bitcoin Angels, 2013 seems more likely to be a Venture year. I am also starting to hear from Hedge Fund managers; Bitcoin is too small for many of them to invest in, but some more macro-econ oriented managers are keeping an eye on it as ‘interesting.’ In my judgment, they’re thinking about Bitcoin about how VCs were two years ago. From my view right now, I think 2013 is a year in which investor demand is going to significantly outstrip available Bitcoin deal-flow. If you’ve got a Bitcoin startup idea, work on that product demo and pitch — this could be your year! (We’re working to get a shark-tank style demo day for the Bitcoin 2013 conference, look for more info on the blog).

Supply Constraints
I think we’ll start seeing major effects of our first Halving Day by mid 2013; I predict that available Bitcoin supply per block is going to drop as we see ASIC miners come on line — the most efficient miners on the market will soon be available for the cost of a mid-size sedan, and I do not believe buyers of those machines will flip their Bitcoins. I think they will hold them. This double whammy of 25BTC blocks and (perhaps) a change in miner economics tells me we are likely to see Bitcoin liquidity problems, (or price increases) in 2013.

More Mainstream Announcements
As larger companies figure out Bitcoin and how they can be involved, I think we’ll start to see significant adoption and exciting announcements.

I’m looking forward to seeing you at Bitcoin 2013! As always, get in touch with me at, or for faster response times, our Assistant Director Lindsay Holland is at