Analysis: Annual Letter From Bitcoin Fundation Chairman Peter Vehehes

The Bitcoin Foundation is an interesting beast, particularly for its manoeuvrings into the pretences of power. The Foundation, or more accurately, the Fundation, pitches itself as the agent of Bitcoin adoption. As a non-profit, this includes taking donations,  making logos, talking about rights, and promoting known scams.i This is not a favourable portrait I’m painting here, which is precisely why, for your enlightenment and enjoyment, we’re going to pick apart the Annual Letter from the Chairman of the Fundation’s Board, Peter Vehehes.ii

Peter Vessenes, Chairman of the Board Apr 05 2014

It’s been quite a year, ending with an intense quarter for Bitcoiners. These last few months have been full of some of the most positive news I could imagine; powerhouse investors and large corporations are engaging positively with Bitcoin.

What a puppet. The whole notion of Bitcoin is to create a new system, free from the tyranny of the old. Vehehes tosses this out the window and laps up the table scraps of the “powerhouse investors.” He must be getting paid like a motherfucker, which means that he didn’t buy as many cheap bitcoins 2-3 years ago as he should’ve.iii After jerking off the “large corporations” he should pop on over to the the University morgue and get a spine.

They’ve also shown us some very challenging times — Bitcoiners are seeing real hardship because of the Mt. Gox meltdown.

This was hardship that the Fundation itself created by promoting the living shit out of Mt Gox at every opportunity. Mark Karpeles, CEO of Mt Gox and scammer extraordinaire held the “Industry Seat” on the Bitcoin Fundation Board of Directors until February 2014.

As Chairman of the Bitcoin Foundation, I owe you an apology. Bitcoin has grown more quickly than we have, and we weren’t prepared to keep up.

Madoff had a hard time keeping up too. Businesses that have a purpose either keep up or go bust. Only these feel good non-profits have the luxury of “owing apologies.”

What can we do to improve? I have some ideas, and I would like yours as well. First, we need to continue to staff up our communications team, and change our communications culture. Second, we need a more precisely defined and stronger set of guiding principles.

Yes, a point to the existence of the Fundation, some 18 months into its life and after several hundred thousand dollars have been collected,iv would indeed be called for. Better now than never.

Third, we need to make some small modifications to our Governance structure.

Well, Karpeles couldn’t keep that Board seat forever, so ya.

I hope to see you at Bitcoin2014 in Amsterdam May 15-17. We will have an open conversation with all our members on May 17, 4pm.

Sweet. Another place to pick up a few bucks. A €395 conference!v


The primary operational change we need to make is better, more transparent communication. The entire team at the Foundation is very small; until recently just six full-time employees. We are incredibly lucky to have a huge bevy of volunteers who run our committees and do much of the work, along with the international members pushing forward in individual countries and the amazing advocacy all of our members do naturally.

I’d say that communication without “a more precisely defined and stronger set of guiding principles” is gonna be tricky. What are you working from, Vehehes? What are you doing other than gum-flapping?

You, our members, deserve better communication.

And more cupcakes.

We have let two things get in the way; the first is that we’ve had complex, sometimes delicate communications concerns around some of our advocacy work in the United States. We have wanted to respect the process people like Patrick Murck and Jim Harper are engaged in, and give them space out of the public eye to work with regulators and law enforcement.

Working with regulators and law enforcement? WTF kinda bullshit is this, the repatriation of the Canadian Constitution?vi This is Sparta!

The second is that we’ve been lazy and undisciplined about getting updates written in the face of so much possible content. Jon Matonis is tackling this, getting better communications rolling, and staffing up our communications team as a way to add more resources.

I’ve put forward a challenge to the team: “Say a lot more.”

Don’t push yourselves too hard now. You might pull something.

There’s much more we can say than we have about what we’re up to, amazing things our members are doing, and what’s happening in the regulatory world. I would like the Foundation to really stretch on this, both because you deserve to see how your bitcoins are being spent, and because we will all benefit from the sort of vigorous debates that I know will ensue.

They’ve risen to the challenge, and have as a first response opened up read access to our member forums to the public. They are also about to launch a new website on July 1, it is designed to make it easier to get information out about what’s happening around Bitcoin and for our members.

See where your donations are going? Shiny websites!


Promote, Protect, Standardize leave a lot of room for discussion, and as a mission statement it is noticeably vague as to some core questions that Bitcoiners care about: what about decentralization? What about privacy?

It’s time to take a stronger stance about what we believe in.

Freedom to transact economically is a human right.

Since fucking when is the freedom to do anything economically a right? This is some lulzy shit. Vehehes could make an argument for food, clothing, shelter, and not getting raped, but the freedom to transact economically is about as much a right as the freedom to yell “BOOOMMMBBB” in an airplane.

Bitcoin provides an opportunity to bring this freedom to people around the world.


The Foundation is committed to the core values that enable this freedom: Decentralization, Fungibility, Standardization and User-controlled privacy.

We will be soliciting feedback on these at Bitcoin 2014 in Amsterdam, both the values and the reasoning behind them – let’s see how much consensus we can get as a community around these.

If all they do is solicit feedback, there’s no point in having a Board. They just need to take polls and post them on /r/bitcoin and away we go. This would also be much more cost-effective and confuse many fewer noobs as to which Bitcoin businesses to trust.vii


Centralization adds so many risks to Bitcoin that we think of it as almost self-evident this needs to be protected. Often debates arise not as to whether the technology should become more centralized, but instead as to whether or not an innovation or concept or business model might increase or decrease centralization.

We need to keep at this one, and keep it as our first priority; we will continue to gain facility with these new decentralized computational tools over time, and we should keep vigorously debating the impact on centralization as we do.

Only promoting one fiat-BTC exchange, especially one running PHP, is probably a bad example of centralization. Same goes for, Coinbase, etc.


Money – cash money – paper money – money from governments – is fungible. You can accept cash as change from a bank or a local butcher shop without worrying about where the cash has been, or if someone else will accept it. In that way, paper currency is largely ‘memory free’. Not all of our money is memory free – for instance, credit card payments remember where they came from, and can be summoned back via a chargeback.

Dollars aren’t as fungible as Vehehes makes it sound. The theory of the bezzle-dollar and tide-dollar is far more compelling.

Bitcoins have a lot of memory. Depending on how they’ve been used, researchers are able to trace owners back many years by inspecting the blockchain. And, of course, there are ways to add metadata to bitcoins to increase the amount of information and memory we have about them.

Except there’s no bitcoin taint. This dude needs to buy himself some fucking Trilema credits.

Colored coins, black-listing, red-listing and other proposals all want to add memory to our coins – often for arguably good or innovative reasons. Most of the proposals can be implemented without any changes to the Bitcoin network as a whole, they could be added as a layer on top of Bitcoin. Some require protocol changes.

Colored coins, that is the blockchainizing of securities, don’t solve a real problem. Blockchains solve double-spending. In the world of securities, double-spending is just called short selling. Black-listing and red-listing, on the other hand, are as unfeasible as the War on Drugs. 0/3 Vehehes. In baseball we call that a “strike-out.”

When we say fungibility is critical for freedom of transaction, we are not saying that any of the above is good or bad, per se. We are instead committing ourselves to the idea that the Bitcoin protocol itself shouldn’t force such systems on users. Bitcoin is best and most valuable if a coin is a coin is a coin. For those who wish to use such systems, they should be allowed to opt in.

Please, Mr. Regulator, please let us opt in. With a cherry on top?


One Bitcoin weakness is that the core client is the protocol specification. This has two major downsides; it makes it difficult for theoretical cryptographers and computer scientists to add their knowledge to our protocol, and it makes it very hard to implement alternate clients.

Ok, so specify the protocol. This isn’t news to anyone and should be priority numero uno. Fuck the merchant adoption shit already.

Alternate clients, if working, would add significant decentralization to Bitcoin – if a certain client had a bug or was compromised in some way, the negative impact would be greatly mitigated.

So get on with it!

Cryptographers can’t (or don’t often wish to) inspect C++ code to assess how the protocol works, and so they can’t be as helpful as they’d like to be. Problems like transaction malleability would be more easily assessable and solutions could be debated and worked on more easily with a specification that allowed collaboration between theorists and engineers.

As many core developers have pointed out over the years, actually specifying the protocol is extremely hard work, especially while our community continues to innovate.

Everything worth doing is extremely hard work.viii That’s what makes it worth doing. Jesus fuck how can there be any innovation until the protocol is specified? How can justify breathing, much less speaking at conferences until its done?

This is a place that I feel the Foundation could help directly, by providing funds and motivation for what will undoubtedly be a long slog. The benefit to all of us at the end would be immense, though – we would have significant risk reduction with a functioning implementable specification.

Each of the Power Rangersix should be minted at this point. If not, they need to find a wealthy patron. Asking a bunch of poor idealistic basement-dwellers to part with their lunch money so that some SV jerkoffs can fly to Amsterdam is despicable.

User-controlled Privacy

Privacy is extremely hard to come by on the Internet. Bitcoin itself is not very private right now.

Privacy has always been hard. Anonymity, they say, is not for the poor.

Publication of the owner of a single Bitcoin address can yield an incredible amount of personal financial information, information that cannot be put ‘back in the box’ – it will be available forever, encoded into the blockchain. This is the sort of information that law enforcement agencies would typically need to subpoena a bank for; instead right now we offer it to the entire Internet.

See previous taint comments.

We haven’t yet seen significant involvement from consumer privacy agencies at the Foundation, but I believe they will be horrified when they understand just how much private financial data is being broadcast and permanently recorded.

Or maybe consumer privacy agencies aren’t as idealist and deluded as Vehehes? I know dozens of people, none of whom are technically savvy in the slightest, who fully appreciate that they have no digital security. They simply don’t expect it. It seems that only those who use reddit and Samsung smartphones have such pretences.

This information directly impacts citizens living under repressive governments. It could cause physical harm to a woman whose finances are controlled by her pimp or her kidnapper. The knowledge of transactions can be combined with violence to limit any human’s fundamental right to transact economically.

Because pimps and kidnappers are always scanning the blockchain and doing credit checks. This is complete fear-mongering.

It seems therefore critical that we do everything we can to support efforts that enhance this privacy from global inspection. Technological efforts like trustless sharing and ZeroCoin/ZeroCash have potential to improve the privacy guarantees available to those using Bitcoin.

Sure, Bitcoin 2.0 will save us all. Or not.

Not everyone will want this kind of privacy to be available. In some jurisdictions, concerns over money laundering are brought up as the reason why such privacy should not be available.

The USG perhaps? Vehehes, if you care so much about privacy and shit, why are you working with them on regulation?

I believe that these concerns are real and valid, and pragmatically, that a balance needs to be struck. We don’t yet know exactly how to balance the risks to different parties; on the one hand direct violence, control of individuals and financial risks borne by citizens with hyper-inflationary money supply are real harms being borne by human beings around the world right now. On the other hand there are real and more generalized harms to society that money laundering enables.

Yes, money laundering is equal to QE∞ in its harm to society. And First Nations culture is equal to European culture in its contributions to the arts. Right.

Right now, I believe the most reasonable regulatory approach is to encourage anti-money-laundering and know-your-customer rules that can be implemented at the ‘endpoints’, Bitcoin exchanges or money transmittal businesses. These businesses already have clear regulation and operations rules and understand how to identify money laundering, and what to do about it when they see it.

Or, y’know, stick with the WoT.

At the same time, we need to do better protecting those who have no other safe way to transact economically, and the Foundation will be providing support for a variety of proposals as a way to let the broader community engage with them and assess what would be useful.

There are no people with “no other safe way to transact economically”. Period. Users of the tide-dollar are neither interested in nor technically competent enough to use Bitcoin any more than they are PGP/GPG. And that’s ok.

Governance Tweaks

Our board election schedule is in major flux right now; we have two seats that need filling. Our original bylaws had all board members come up for election on the same date, making for the possibility of massive turnover every few years. This issue shouldn’t be a tough one to get right, we just got it wrong when we started by putting all the seats up for election at the same time. It’s the right time to fix it.

I’d like to take the opportunity afforded by these special elections to get the Foundation on a staggered two-year board term (“Even or Odd years”). I have proposed the following to the board, and they have approved it.

Seat Member Class Held By Term Ends Next Election Year
Indiv. A Individual Gavin Andresen 2014 Nov. 2014 Even
Indiv. B Individual Jon Matonis 2015 Nov. 2015 Odd
Indiv. C Individual Elizabeth Ploshay 2015 Nov. 2015 Odd
Indust. A Industry Meyer Malka 2015 Nov. 2015 Odd
Indust. B Industry Open 2016 April 2014 Even
Indust. C Industry Open 2016 April 2014 Even
Founding Founding Peter Vessenes 2014 Nov. 2014 Even

We discussed at some length either two year terms or one year terms, and concluded based on feedback from our two newest board members that it’s a challenge to get up to speed on the breadth of the Foundation’s efforts – both Meyer and Elizabeth felt one year wouldn’t be enough time to be effective. If we go too long, however, we run the risk of having a less accountable board, or a board that’s completely out of sync with our industry.

Finally, I’ve asked Jon Matonis to update you on the details of operations and finances of the Foundation. Expect that soon.

The Board shit is neither here nor there, but I can’t wait to dig into the finances! Let’s see if Matonis can bring the heat like Vehehes.

The bar is high.

___ ___ ___

  1. To date, the Bitcoin Fundation has promoted such notable scams as Mt. Gox, BFL, and CoinLab, to name but a few.
  2. Making fun to peoples’ given names is low-hanging fruit, (goodness knows that kids made fun of my name for starting with “doosh”) but in this case it usefully knocks PV down a peg or two, and that’s really the whole point here.
  3. Or that he blew them all on alpaca socks and BitFunder “securities.”
  4. See bounce’s research for the complete donation derivation.
  5. Tip: More learning for less money (but more time investment) is always to be had over at #bitcoin-assets.
  6. Canada is one of the only countries in modern history to ever obtain its independence just by asking for it. Not a shot was fired. Which is probably why that “independence” is wholly a sham. Parliament will be prorogued and the Senate will be deployed as needed to ensure that 35 million Canucks keep plundering the earth and shipping profits abroad.
  7. Hint: If a Bitcoin business is endorsed by the Fundation, stay far, far away.
  8. Reading Shakespeare, maintaining a blog, building a business, and generally living a productive life is hard. And so, so good.
  9. Our affectionate nickname for the “Core Devs

16 thoughts on “Analysis: Annual Letter From Bitcoin Fundation Chairman Peter Vehehes

  1. […] was a swell idea. The last seat for all of the information I can find on their page is essentially Peter Vessenes's seat as he is the founder of the organization. His also being the founder of Coinlab puts […]

  2. […] energizing, intoxicating, and invigorating, but as is far too often the case, taken advantage of. Intentionally. A frequent point of idealism, despite chants of “DECENTRALIZE DA WURLD” and the clear […]

  3. […] at this year’s Bitcoin Foundation Conference in Amsterdam. These awards are fitting given the Foundation’s own irrelevance. […]

  4. […] why the folks at #bitcoin-assets, myself included, make seemingly audacious claims such as “The Bitcoin Foundation is a joke,” or “MPEx is the only Bitcoin exchange that doesn’t come free with a […]

  5. […] to be confused with CoinLab, the Peter Vehehes scam that mopped up $500k from Tim Fucking Draper (yes, that’d be the exact same dood who […]

  6. […] this whole charade’d have worked a damned sight better if the various y-combinator bezzlers, the foundation hearn, gmaxwell and co would have actually had what they thought they had and everyone thought they […]

  7. […] Problem, It’s Bitcoin’s Solution followed in a distant seconds and thirds by Analysis: Annual Letter From Bitcoin Fundation Chairman Peter Vehehes and Consumerism: The Great Equalizer – The Legacy of the French […]

  8. […] Roadmap and Hardfork. I enjoyed the article and took it upon myself to call out Teh Lead Derp of Teh Bitcoin Fundation scammers on my second favouritei channel for doing so, […]

  9. […] this point it would seem that pretender-in-chief Gavin Andresen, he of poor and decrepit Bitcoin Foundation fame, has been sunk. While he’s still ringing alarm bells and shouting “the sky is […]

  10. […] a meanwhile broke dude who imagines that if he keeps being mentioned he stays relevant, as if, and Voorhees just wants to keep his name in the press lest people forget. Well, not the sort of people liable to […]

  11. […] the mole planted in Vessenes’ scam foundation by you know who, the incapable and willfully ignorant derp who tried to break Bitcoin with 20MB […]

  12. […] seen the way right through the twenty layers of cruft and twenty shades of pallid blue smoke that Vesennes’ illegitimate band of power rangers have left in their […]

  13. […] is all too reminiscent of retards like Gavin who blab to FT about how they’re selling their stolen bitcoins to buy fiat stocks when stocks are at all-time highs!, which is basically the opposite of reading […]

  14. […] #3 or #4 design change for dat bitcoin phoundation – – They never seem to forget the inclusion of token […]

  15. […] This Guide sets up the latest version of bitcoind, which is obviously a piece of fucking Bitcoin Fundation shit on a stick. This Guide will be updated with instructions on setting up bitcoind 0.6-0.7 asap. […]

  16. […] the time, the Vessenes Phoundation was promoting their version of the Bitcoin reference code, which they called “0.9.x” or […]

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