Bitcoin’s Leaderless Advantage and How It Came to Be

Written by BTSE

January 31, 2020

Bitcoin's Leaderless Advantage and How It Came to Be

Why Bitcoin Is Better Off Without A Leader Or Foundation

In its 11 years of existence, Bitcoin has gone through multiple phases of leadership that only weakened in time and strengthened the network’s decentralization. At first, there was Satoshi Nakamoto: he stuck around for almost two years, helped early developers and enthusiasts understand how Bitcoin works and what it’s supposed to do, and then mysteriously vanished and left Gavin Andresen as lead maintainer of the project.

From 2011 until 2016, Bitcoin was under the spiritual leadership of developer Gavin Andresen. It was a great time to further expand on Satoshi’s project and add new features to the protocol. However, the Gavin era led to two important realizations in regard to the viability of the Bitcoin project: official leaders are a terrible idea and foundations cannot function in this decentralized ecosystem.


Gavin Andresen as the last official Bitcoin leader and why it’s good that his reign ended

When Satoshi Nakamoto was around, his suggestions and directions were respected by other developers and he acted as a bona fide benevolent dictator. He told BitcoinTalk users how Bitcoin should be used, explained to developers what kind of mistakes should be avoided, and even suggested some interesting use cases for the currency.

Gavin Andresen was different. On one hand, his authority was not absolute and his proposals often times had critics. For instance, his solution for scalability (BIP 101, implemented in Bitcoin XT) involved the doubling of block size every couple of years and was not received with universal acclaim.

However, Andresen was instrumental in attracting more people to Bitcoin. He would go to conferences as an ambassador of the project, join radio talk shows on libertarian stations, and play the role of an experienced father figure during Bitcoin events. Oftentimes, newcomers would interact with Gavin Andresen in person and receive their first dose of the Bitcoin red pill that eventually helped them fall down the rabbit hole.

If anything, Mr. Andresen did the job of Satoshi with greater success thanks to his willingness to expose his identity and earn people’s trust. But as the project grew and more people understood what Bitcoin is about, the amount of dedicated content increased exponentially and new advocates emerged. The need for a central figure has decreased over time, in order to generate more social and political decentralization.

Today, the role of somebody like Gavin Andresen in itself is decentralized: the maintainer of the Bitcoin Core project can just focus on his work, while advocates from all over the world go to conferences in order to explain how Bitcoin works and social media advocates spend precious hours every day to spread information. As the project has evolved, every community role has become more specialized and the demand for these specialists followed the trend.

Correspondingly, today it’s harder to find a central figure who provides the official definition of what Bitcoin is, how it should be used, and what the development priorities should be. Multiple individuals and organizations work on various projects all around the world, the review and scrutiny process has become stricter, and the standards for decentralization have gradually improved.

In Gavin Andresen’s vision, Bitcoin was to become a software project just like Linux, with a foundation that plays key roles in advocacy, public relations with governments and organizations, and development. Ultimately, his plans didn’t work out, and today we have more social and political decentralization in BTC than ever.


The Bitcoin Foundation and Why It Is Good that It Failed

Founded in September 2012 by project maintainer Gavin Andresen and prominent bitcoiners Peter Vessenes, Charlie Shrem, Mark Karpeles, Roger Ver, and Patrick Murck, the Bitcoin Foundation played an important role in distancing Bitcoin from its negative reputation as the Silk Road currency. The organization’s relevance didn’t last for a very long time, but some key members of the community joined the project after interacting in person with various founders of the Foundation.

In spite of its goal to clean up the image of Bitcoin in politics and media, the series of events that happened in 2014 and 2015 has further lowered the influence of the Bitcoin Foundation. For every successful testimony in front of the US Senate like Patrick Murck and the recruitment of a new talented developer by Gavin Andresen, there has been a scandal involving key board members to tarnish the reputation of Bitcoin in media and slow down adoption.

The arrest of Charlie Shrem (who at the time served as CEO of the popular BitInstant exchange) and the collapse of Mt. Gox (whose CEO was Foundation co-founder Mark Karpeles) have been instrumental in proving that concentration of power easily leads to reputational damage for the project. The efforts of cleaning up Bitcoin’s name weren’t as successful when Bitcoin Foundation founding members had to resign from their positions before being arrested.

Even in a world where such an organization is led by angels among men, the possibility of government-led attacks remains. In order for a decentralized and stateless currency to function, the amount of politics involved should be kept to a bare minimum, so that people worldwide can adopt the money when they need it and use it in their best interest.

If anything, the lack of a foundation or any other type of centralizing political authority in Bitcoin is beneficial for adoption at this state when the whole world has heard about Satoshi Nakamoto’s invention. In the beginning, it was about the early adopters and their advocacy, but now it’s about building social networks worldwide and finding uses for BTC wherever governments enslave their citizens with inflation and national currency debasement.

Bitcoin started as a geeky project, evolved as an aristocratic curiosity among libertarians, and has finally reached a point where it can naturally find use cases in everyday life for anyone who wants to join in. The name itself is more popular than ever, the volatility is getting lower over time, and the decentralization increases with every full node and mining rig that is connected to the internet. The decentralization of Bitcoin isn’t just monetary or infrastructural: it’s also about extending the networks of people and exposing newcomers to non-governmental, apolitical, uncensorable, and unconfiscatable money. Nowadays, every participant is a Bitcoin Foundation in himself, and it’s important for the knowledge to spread. Bitcoin is taking over, and it’s a lot more efficient without official leaders and foundations.


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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.

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