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Who Funds Bitcoin Developers?

  • Only a small proportion of programmers contribute to Bitcoin Core on a full-time and funded basis.
  • “Bitcoin open source development needs more funding.”
Who Funds Bitcoin Developers? 101
Source: iStock/izusek

Many, many developers have contributed to Bitcoin’s growth since its birth in 2009.

In other words, Bitcoin is the representation of a long line of programming work. Developers have had to look for bugs, write software updates, and assume the vital task of proposing how Bitcoin might evolve.

This is busy and very careful work, and one question that crops up in general discussion of Bitcoin development is: who funds it? Are developers mostly voluntary, or are they supported by funding from interested third-parties?

And more importantly, is the current system of developer funding actually good for Bitcoin and its development? Well, according to the developers actually working with Bitcoin, it is mostly beneficial, even if certain problems need to be addressed.

Voluntary or full-time?

According to a developer who wished to remain anonymous, only a small proportion of programmers contribute to Bitcoin Core on a full-time and funded basis.

"In 2019, 150 people contributed pull requests to Bitcoin Core," he tells Cryptonews.com. "Of those, roughly 20-25 do it full-time and receive funding or salary to do so. It would be good to see this number closer to 100."

As the developer points out, there are various levels of developer involvement, with some sitting at an intermediate stage between 'full-time' and 'voluntary.'

"Another 20-25 do it regularly part-time and may or may not receive a varying amount of support," he adds. "Most contributors do it without any form of financial support, much less in a stable form. Fewer than 50-60 people contributed pull requests frequently and regularly to Bitcoin Core in 2019."

Bitcoin beneficieries

Another important question is that of who exactly funds Bitcoin developers. As Bitcoin Core developer Jimmy Song explains to Cryptonews.com, the answer is: pretty much any company with a financial interest in ensuring Bitcoin's stability and growth.

"Usually people or companies that have benefited from Bitcoin," he says. "These include companies as diverse as Blockchain.com, itBit, Square and Chaincode Labs. Many developers work on Bitcoin voluntarily as they're pretty set financially, but many also receive funding through these channels. You generally have to have a reputation first before you get funded, though."

This picture of a diverse mix of funding sources seems to be confirmed by other developers. As the anonymous developer says via email,
"From what I can see, funding is coming from companies (Blockstream, Xapo, BitMEX, Bitmain, Binance, OKEx/OkCoin, Acinq, Lightning Labs (hopefully Kraken/Coinbase/Bitstamp/Gemini/Bitfinex soon, etc.), patronage/R&D structures (Chaincode Labs, Square Crypto, MIT DCI, HardCore.Fund), and individual donors (a few large donors and a number of smaller ones)."

Put simply, Bitcoin may have begun as a communal 'hobby' back in the day, but it now serves a growing number of big financial interests. As such, it's no longer an experiment in money and coding, but the primary means by which a range of companies strive to make a profit.

Is the current system fit for purpose?

Given that most Bitcoin developers aren't full-time, and that they don't benefit from a formal structure of funding, it needs to be asked whether the system is sufficient to ensure the continued evolution and success of Bitcoin.

Jimmy Song believes it's done a good job until now, even if there's perhaps room for improvement.

"Hard to say," he says. "It's working pretty well right now. There's a good number of people that see it as a good place to contribute, which makes sense as it secures the Bitcoin you own. It's a hodgepodge of sources for funding, so it's hard to say that it's beneficial or not. I know for example that Bitmain stopped funding devs as they ran into financial trouble, I suspect we'll see more of that as time goes on. It's really individuals that do their best to find funding and some are successful, others are not."

(We have contacted Bitmain for comment and will update the article should they respond.)

There does seem to be the sense that Bitcoin development suffers from a relative lack of funding. And without enough funding, not everything that really needs to be done actually gets done.

"Bitcoin open source development needs more funding, particularly to increase experienced and deep review of proposals and pull requests," explains the anonymous developer.

"This is under-appreciated from the outside; people tend to pay much more attention to merged changes, mailing list posts, research papers, BIPs, and Reddit and Bitcoin StackExchange answers. Review is continuously the rarest resource and bottleneck to progress."

Future Bitcoin development

When it comes to the future of Bitcoin development, one concern is that growing consolidation in the wider Bitcoin industry might result in the concentration of funding sources. By extension, this could result in Bitcoin being developed in a direction that prioritizes the interests of only a few players.

However, there are a number of solutions to this hypothetical problem. As explained by our anonymous developer, perhaps the most promising of these is the "10x10" matrix.

"One idea being discussed among various people would be a "10x10" matrix," he says.

"10 independent patronage structures, decentralized, each able to fund 10 people working full-time on open source, each with their own culture, priorities and operational style."

"This would bring healthy diversity in funding which needs to be as decentralized as possible while helping companies and individuals donate, who otherwise might not know who or how to optimally sponsor."
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Learn more: Cryptoverse Stunned as Jihan Wu, Roger Ver Sign a Threat to Bitcoin Cash Miners

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