Bitcoin Foundation Officially Launches International Chapters

Danny Bradbury
Dec 12, 2013 at 14:00 UTC
Updated Dec 17, 2013 at 17:01 UTC

The Bitcoin Foundation has officially rolled out its internationalization programme, signing national affiliates in Canada and Australia, just as another organization makes plans to promote bitcoin on a global basis.

The Global Bitcoin Alliance, with members across the globe, will take a fundamentally different approach.

The Foundation is requesting affiliate chapters to pay the Foundation directly for membership, under what executives are calling a ‘membership sharing arrangement’.

In contrast, the Global Bitcoin Alliance will be a loose group of regional bitcoin associations, which retain complete autonomy and are not required to share members with a single organization.

The Foundation, which began in the US, marked the initiative by opening its London office. It will be headed by Jon Matonis, executive director of the Bitcoin Foundation and a contributing editor to CoinDesk.

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The Foundation has already signed the Bitcoin Association of Australia and the Bitcoin Embassy in Canada under its international affiliate program. It also has a memoranda of understanding with groups in India and Argentina, and has received “strong interest” from China, Germany, and the Netherlands.

It is offering considerable benefits to affiliates who sign up. Namely, reimbursement of the expenses for their paperwork, and the ability to use the Bitcoin Foundation brand.

It will also provide logistical support in areas such as handling press queries, should a local affiliate be unable to deal with a request.

The 15-month old Bitcoin Foundation, which has over a thousand members, has become one of the most powerful organizations in the bitcoin community. Its executives testified at a recent US Senate hearing into the virtual currency.

“We believe that we can achieve bitcoin’s potential and promise if we are just a little more organized in our efforts,” said the Bitcoin Foundation’s director of public affairs Jinyoung Englund, who has been advocating a hands-off approach to affiliates. She added:

“We don’t need to control the future of bitcoin, but we want to facilitate an environment where we can develop a network of local communities.”

How affiliate membership works

The process for becoming an affiliate starts with a memorandum of understanding (MOU).

This lets potential affiliates spend between 30 and 60 days negotiating contract terms and organizing local administrative paperwork, for which they are reimbursed.

This includes picking a name and deciding on a local leadership structure. The Bitcoin Foundation does not control the appointment of board members, although it does request that affiliates have at least five board members.

contract

However, there is at least one area in the Foundation’s template affiliate agreement that has been causing concern with potential affiliates: membership sharing.

A local organization would have to ask its members to pay any membership dues to the Bitcoin Foundation. The Foundation would then pay a proportion of that membership back to the affiliate, based on the proportion of members that they bought to the overall Bitcoin Foundation membership.

If an organization was already charging fees to its own members, then there would have to be a “transition period,” said Englund, who insists that this is negotiable.

“The group that reached out to us reads it, and if they don’t like something then we discuss it,” she said of the template agreement.

Regional pushback

However, the clause seems to be enough of a sticking point for the Foundation that it contributed to the collapse of at least one affiliate negotiation.

By the time the Bitcoin Embassy committed to the affiliate program, the Bitcoin Alliance, another organization representing bitcoiners in Canada with 150 members, had already passed. Alliance leader Anthony Di Iorio had balked at the membership part of the agreement.

“We are glad that we are keeping all of our membership,” he said, adding that he still looked forward to working with both the Bitcoin Embassy and the Bitcoin Foundation.

“We would like to work with anybody. We just feel better taking our membership, and not forcing people to join or combine memberships if they don’t want to.”

Englund argued that membership sharing is a reasonable request, given the benefits that the Foundation brings to the affiliates.

She insisted that the Foundation remains sensitive to local bitcoin groups’ needs, and does not want to control their memberships under the affiliate agreement.

“I’d quote Bill Cosby. The fastest road to failure is trying to please everybody,” she said. “We’re not trying to pre-emptively stop anyone from building their own initiatives or trying to start their own memberships.”

She cited the bitcoin grant and sponsorship programs as prime examples. “We support people who aren’t members, who are not doing things that are on our agenda.”

Nevertheless, others also expressed concerns over the affiliate agreement this week. “We believe it is not between equals. The central Bitcoin Foundation [has] much more rights compared to the affiliates,” said Mats Henricson, organizer of the Stockholm bitcoin meetup, and a main contributor to the Java Bitcoin API – citing personal views which he said were in line with those of his peers in Sweden. Henricson said:

“We also believe too much money ends up in the US. We have objections to the proposed split of money, where large affiliates would get more % of the money [sic] compared to small affiliates.”

He plans to create an independent association alongside his colleagues, he added.

“If Bitcoin Foundation is serious about this, then they should start by creating a US affiliate, and make a proper split with the central foundation,” he continued.

The US part of the Foundation’s membership is in the process of becoming a subsidiary, which is a larger organization with “more responsibility” than an affiliate, said Englund.

Subsidiaries will sit underneath the international Bitcoin Foundation, just as affiliates do. There are no concrete plans to create other subsidiaries at this time, and the US subsdiary will retain all of its membership fees.

The Global Bitcoin Alliance

Key members of the Israeli bitcoin community have also reconsidered their relationship with the Foundation, postponing joining the Bitcoin Foundation indefinitely due to what insiders call “several disagreements with them”.

“We currently prefer to adopt a bottom-down grassroots approach,” said Ron Gross, founder of Israeli bitcoin startup BitBlu.

“Each country elects their representative organizations, and these organizations form a loosely-coupled global organization.”

Gross is said to be a key driver behind this loosely-coupled collection of organisations, named the Global Bitcoin Alliance.

Gross is also the executive director of the Mastercoin Foundation, which is an effort to promote a new protocol layer designed to run on top of bitcoin, adding new features to it. Mastercoin is also designed so that it could migrate away from the bitcoin block chain in the future.

The Global Bitcoin Alliance was conceived in September at Amsterdam’s Bitcoin Europe conference, when various groups met to discuss the Bitcoin Foundation’s internationalization proposals, says Di Iorio, who is also involved in the initiative.

Currently, it consists of a Google Group mailing list, with several participating groups from around the world. It will differ from the Foundation’s approach in that it will be flat, non-hierarchical and entirely decentralized, he argued. Di Iorio said:

“It will share resources and help to expedite the growth of communities worldwide, without tying ourselves down to each other. It’s very loose fitting. In no way do we believe that we should be decentralized in one organization in different countries. It’s a collaborative, independent organization.”

Although the Alliance hasn’t officially launched, it has retained a marketing organization, and should be sending out a press release soon, said Di Iorio.

Some are happy about membership sharing

Some are happy with the proposed membership agreement, however.

Bitcoin Argentina, which has signed an MOU with the Foundation, sees it positively. The organization brings 150 “collaborators” and hundreds of additional supporters to the Foundation, said co-founder Rodolfo Andragnes, adding that the organization had already planned to begin asking for some paid memberships.

The Foundation has proven open to negotiations on a per-country basis, said Andragnes, adding that Bitcoin Argentina is also hoping to expand to form eight new foundations in Spanish-speaking countries within South America.

“We expect that our supporters also understand the need of supporting a global Foundation with their payment to us,” he said.

Lars Holdgaard, co-organiser of Dansk Bitcoinforening (the Danish Bitcoin Foundation), was also generally positive about the Bitcoin Foundation’s proposal.

“We’re definitely positive. It’s a fair and good affiliate contract, but of course there are points we have to discuss and agree upon,” he said.

Dansk Bitcoinforening hadn’t agreed on the membership sharing position, he admitted, under which the Bitcoin Foundation has asked for 50% of their membership fees. “But we’re positive towards that as well, because they bring good things to the table.”

The Bitcoin Foundation’s membership is charged in bitcoin prices (from the Coindesk Bitcoin Price Index) that fluctuate regularly to reflect the price of the virtual currency. There is no free membership option for the Foundation.

World Map image via Shutterstock