2020 Was The Year Bitcoin Funding Went Brrr

2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

This year has been one that none of us will soon forget. While the world seems like a chaotic place, Bitcoin continues to find its footing and remain steady, constantly proving the critics wrong, time and time again. 

But things changed a lot around Bitcoin this year, too. The third subsidy halving happened, we got a Bitcoin hashtag emoji and our favorite orange coin saw growing acceptance among institutional investors. But one topic really stuck out to me this year: Bitcoin developer funding. 

While I am not a developer, I find this topic to be very important going forward. So, I wanted to take this opportunity to dive into it, and its history, a bit more. 

We all know the importance of open-source software. After all, Bitcoin itself is free, open-source software (FOSS), which anyone can contribute to (and audit). This is an important aspect for creating a truly hard and scarce digital currency. How do you know what it actually is if you cannot publicly audit it?

But who maintains that software? Who works on the code that Bitcoin is built upon? You can see all contributions in the Bitcoin Core GitHub (https://github.com/bitcoin/bitcoin). The beauty of Bitcoin’s decentralization can be seen in the diversity of its contributors as well — it is open to all.

The funding of FOSS development has always been a bit of a tricky situation. We all know the importance of the software, but due to its open and free nature, there is not much incentive to fund it. There is nothing to sell after all, Bitcoin is free for anyone to use.

Those who understand the importance of it have taken part in the funding of developers in the past, but something changed this year. In the past, most funding came from small groups or organizations (like Blockstream, Chaincode, MIT, etc.) hiring developers directly.

2020: The Year Development Grants Became Cool?

This year, we have seen an influx of Bitcoin developers being independently funded through grants or sponsorships by larger organizations like Square Crypto, OKCoin, Kraken, BitMEX, etc.

Coinbase and Gemini committed to funding developers in the future as well, and projects like Brink will be recruiting and training new devs while also offering possible grants to experienced contributors.

Another new venue for supporting open-source contributors is GitHub’s new “Sponsors” feature, announced last year. Individuals can donate directly to developers, with recurring payments to support their work on Bitcoin Core or other projects. Bitcoindevlist.com is a website which lists many individual developers and their backgrounds with links to their “GitHub Sponsors” pages, or BTCPay Server integrations for direct payment with bitcoin.

All of these efforts together have made this year an important step forward in funding the important work of Bitcoin Core contributors.

Will Bitcoin’s Values Stay Intact?

Bitcoin’s history is peppered with many attempts to fund development, and some of them have been somewhat controversial. Early on, the Bitcoin Foundation attempted to address this issue, among others, and while it made some advancements, many criticized its direction. The B was a more recent attempt that experienced some pushback from the Bitcoin community.

But why would anyone be opposed to financial support for open-source contributors? Isn’t that a purely good thing?

A quick look through Twitter highlights some of the common concerns: Will these larger organizations expect developers to answer to them? Might less qualified developers receive funding due to willingness to appease their sponsors? Won’t politics get in the way? Wouldn’t current developers become gatekeepers, making it harder for new individuals to get involved?

All of these concerns are fair, and I share some myself. But it is important to note that Bitcoin is harder than any developer. Core developers don’t have the last say in how things go. Even if every worst-case scenario came true, users can just reject any of the code changes made. Bitcoin nodes aren’t set up to auto-update, which means node operators have to manually accept and deploy any upgrade. Users can simply reject the changes, continue to run the current version or use a fork of the software.

That does not mean the concerns should be ignored, or that this isn’t an issue we should be addressing. The funding of Bitcoin developers will always be important, and working on how to improve that going forward is going to be vital.

What’s Next?

The thing with decentralization is, sometimes it’s messy. It depends on many individuals taking personal responsibility, ownership and essentially stepping up independently. None of us can tell sponsors how to spend their money, but anyone who isn’t satisfied with current efforts can step up and offer a different approach. Bitcoindevlist.com, for instance, gives anyone an opportunity to help fund development on an individual level. 

But is there a way to organize on a larger scale? Is there a need for additional organizations, perhaps consisting of individuals with Bitcoin’s core beliefs at heart, to step forward to help continue to balance these aspects? What would that look like? 

I believe this will continue to be a main topic going into 2021, and hope to see more funding efforts come forward. Perhaps we will see more community-led projects, with attempts to address these concerns, and continue to balance this important aspect of Bitcoin’s future.

This is a guest post by Justine. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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