Friday, August 01, 2014

Friction Within the The Bitcoin Foundation

The Bitcoin Foundation’s executive director, Jon Matonis, travels the world to promote the virtual currency as a replacement for traditional money. Some of his members want him to focus on a less lofty goal: helping them make lots of old-fashioned cash.

Matonis, a longtime advocate of what he calls “non-political money,” has built the group into a kind of a bitcoin governing body. Early this month he hired a Washington lobby firm, and yesterday he unveiled a website aimed at raising the virtual currency’s public profile.

Some foundation members are dismayed by Matonis’ leadership and grander plans. Investors from Silicon Valley in particular would like the group to focus on more technical matters, particularly fortifying the underlying bitcoin software so it can grow into a viable, large-scale payment network.

Running the foundation is like “going downhill in a go-cart trying to keep the wheels on,” Matonis said in an interview yesterday. “There are different constituencies going in different directions.”

Venture capitalists and entrepreneurs, lured by the technology’s promise, have plowed time and money into bitcoin businesses -- and they’re demanding software upgrades to develop the digital currency’s commercial potential.

“The impact of the bitcoin protocol is economic,” Jeremy Allaire, chief executive of Circle Internet Financial, a Boston-based bitcoin startup, said in an interview. “These are higher stakes than with other open-source software.”

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