Discussion of what a Balanced Board means

[David-R-Allen]

The Bitcoin Foundation Class structure was created to provide a Balanced Board. My premise for this discussion is that the Bitcoin Foundation should understand the background rationale for this current structure and carefully review to determine if there is a better structure which is more appropriate for an organization which promotes decentralized, peer-to-peer systems.

The current chair, Peter Vessenes recently provided this backgrounder:

"I had at least a major part in constructing the multi-class board setup that we have, and can happily explain my thinking on it at the time in a few sentences:

• Individuals will never be able to pay for the Foundation to exist, but I believed it was important to give them a voice in what the Foundation did
• Industry members would likely pay for the Foundation, but would need additional influence and access in exchange.
• To provide a tie-breaker, the Founders were given a vote. Not too complicated or nefarious, just balancing a community value with a pragmatic financial consideration. As a comparison, we're even less money-grubbing than say the Linux Foundation which allows upper-tier members to buy board seats direct."

[mdhaze]

Although I am not one of their group, I have a rather strong feeling that the many people wronged by Mt. Gox would neither care about this set of rationales or feel that they could be logically supported.

Let's go down that road for a moment just for fun. The argument is that "industry members" substitute "Mt Gox"... okay, here we go.

"Mt Gox would pay for the Foundation, but would need additional influence and access in exchange."

Cheers!

[David-R-Allen]

I am going to look at each item one at a time.

"Individuals will never be able to pay for the Foundation to exist, but I believed it was important to give them a voice in what the Foundation did "

What makes an Individual or Individuals less capable of paying for the foundation to exist? Was a target budget established in the formation that stipulated what the Foundation's costs would be and how those funds were going to be spent? It seems to me that the notion of the foundation being a trade organization must have been established before incorporation, in order that the Industry Members (Incorporated Businesses) would have a way of financing the organization. If this is true, how would Individual Membership have any say in the organization with Individual Representatives that work for these same corporations?

I have more questions regarding Mt. Gox influence as an Industry Member, but want to address these items first:

1. Preliminary Budget
2. Trade Organization
3. The point of Individual Members and their benefits

[mdhaze]

This ...

"Individuals will never be able to pay for the Foundation to exist, but I believed it was important to give them a voice in what the Foundation did "

can be considered not as a truism from the start, with the starting infrastructure or lack of, but as a truism going forward, with current and projected overhead costs self perpetuating or expanding.

EG, a lobbyist organization operating in Washington DC. Which I don't think is what Satoshi intended, rather it is a concept he would burst out laughing at. But that's a side issue.

[David-R-Allen]

Regardless of what Satoshi intended, the Bitcoin Foundation leadership seems split. Jon Matonis has come out very squarely opposed to government regulation, and yet his staffers are determined to create and hire lobbying teams.

Jon Matonis ‏@jonmatonis 10h Money was never meant to be a government tracking mechanism. In a free society, law enforcement will be inconvenienced. #bitcoin

Jon Matonis ‏@jonmatonis 10h If improved financial privacy is considered a bitcoin innovation, then yes government choke points do stifle innovation. #bitlicense

Which way are we going?

[mdhaze]

It's quite a bit deeper than that. Let me explain by using the engagement of Patrick Murphy as an example. Here -

https://github.com/pmlaw?tab=activity

Is the activity of "engaging" with the process of commenting and attempting to influence the NY bitcoin regulations. This is a unique and new thing with the rise of a substitute currency in economic decisions and transactions. For example, when Argentina suffered hyperinflation, no foundation came in and "engaged" the Argentinian government with advice on how the use of the US dollar should be regulated. The idea is of course ludicrous. Throughout history, substitute currencies have arose through the volition of the people, and have not been stopped, although they have at times been temporarily throttled, by the various governments affected.

Had any well intentioned group tried to "engage and advise" the Argentinian government on the regulation of the US dollar which de facto coexisted with the Peso, the result would have been their plans wrapped and warped into the government's corrupt and evil plans for theft from the people.

Now, is the current situation much different? I think not, but time will tell. Certainly, several new dimensions have been added to the traditional model of government theft through printing money, as the competitor is a non-physical currency.

Lobbying, and/or the process of commenting on regulation, is accepting the ability and right of the government to regulate bitcoin. In the case cited of Argentina and in many other cases, the rise of a substitute currency is the product of desperation on the part of the people due to the debasement of their national currency. While the powers that be may view the new virtual currency as a threat, actually it's free use places limits on the government's ability to have free reign in debasement of the national currency and theft from the people thereof. Substitute currencies have never destroyed a nation, they actually aid countries by enhancing overall economic health and thus effectively, tax revenue, even if and when used partly or wholely in black market or off books transactions.

For these reasons I lean moderately toward a view that interaction with government is in the medium term and at the best, irrelevant, and most likely or at the worst, an assist to the processes of debasement and destruction of national currencies.

[David-R-Allen]

How does one get the Industry members to weigh in? Are their views on regulation varied or are they being polled or lobbied to debase the currency of bitcoin, in order to stay in business?

Let's ask some of those in the Industry (perhaps those who ran and lost in the last election).

[ABISprotocol]

@David-R-Allen What are your thoughts on what a 'Balanced Board' actually means, and would you consider editing the pull request to include that in the description? If not, please add a comment on how you would define a 'Balanced Board' and what your thoughts are on how that should be reflected in Bylaws, if such a change would be needed.

[David-R-Allen]

@ABISprotocol - I was not there at the inception of the Bitcoin Foundation. I would like to understand what was meant by a "Balanced Board" from the people who created it. Was there a thought that there would be two or more sides to some or all issues, which could split the board? What were they?

[ABISprotocol]

@David-R-Allen I would like to see your idea for what a 'Balanced Board' would look like. If you are trying to get an idea of what the Board of Directors think on that, you may want to first check out their list on the Foundation page (some Founders are shown there), as it is possible to contact them via the private messaging function in the forum by using their names as shown on the list - some of them (but not all) will respond. (Note that Micky Malka's name in the forum is Meyer Malka, so it won't work if you try to search for him by 'Mickey or 'Micky,' at least not last time I checked.)

[mdhaze]

Simply list a column with the original board members names. To the right of that, make a couple more columns. Show the board members at each time the board changed.

Then cross out peoples' names who work in bitcoin industry or development. Disregard whether they are in "individual" or "industry" or "founder" slots, just look at what they do. That leaves you with a showing of reality of the "balance" or lack of.

Next for each period of time, figure individual/total. Then you can do a weighted average to get the fraction individual/total since inception.

[David-R-Allen]

I started this and realized quickly the issue is a futile exercise. The "balance" is a smoke screen.
Everyone on the board has a direct interest in a Bitcoin business, as Mike suggests. Peter's thinking at the time may have been appropriate but it certainly does not fit the current situations. Besides it is obvious he is not interested in the discussion.

We simply need to replace the current board with people who are willing to talk to their membership.

[mdhaze]

Some time ago I mentioned that in other organizations I have been involved in - some to quite a degree - it seems to naturally be the case that industry members gravitate to board and to leadership. But they don't need any complicated weird board structure to or for this to happen. So I can't agree that industry members dominating a board is intrinsically a bad thing, rather that needlessly and ridiculously complicated board structures are.

These two issues should be considered separately. If one actually wanted to have a fraction of "individuals", then that category has to deny industry, just like the industry category denies individuals.

Regarding "replace the current board with people who are willing to talk to their membership" I can think of a half dozen organizations where the board members did just that. And of others where they were very stand-offish. Might have to ponder the reasons why, one direction or the other.

[David-R-Allen]

I expect that the needlessly complicated structure is the real problem. There is nothing to stop a membership based organization to provide perks for people who pay more for membership, however dominance over others in the organization flies in the face of the very principles of Bitcoin and does more damage than protecting anything.