When we talk about the development of Bitcoin, the first person that comes to mind is Satoshi Nakamoto, who in 2008 released the Bitcoin whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which gave birth to the Bitcoin protocol.
Like most software implementations, regular maintenance and upgrades to the Bitcoin protocol are crucial. Since Bitcoin is not controlled by a single entity, development and maintenance must be achieved through consensus among network participants. Essentially, there is no individual or company that manages the development of the Bitcoin project; instead, it is initiated by individuals or teams from around the world.
The resources and scale of the Bitcoin ecosystem continue to grow, and various organizations have emerged, contributing to the development of the Bitcoin protocol. This is why Bitcoin has evolved from a niche open-source software to a robust and mature digital infrastructure relied upon by millions of people.
In this article, we have outlined some of the major organizations and individuals who fund the development of the open-source Bitcoin protocol and ecosystem.
Bitcoin Core: The Core Contribution Team Behind Bitcoin
Bitcoin has been in existence for over 15 years, and the creator of Bitcoin, known as Satoshi Nakamoto, has disappeared from the internet. However, there has always been a team maintaining the updates to Bitcoin’s technology, with the most famous being the Bitcoin Core team.
Bitcoin Core is a software client that allows participants to create nodes, store coins, conduct transactions, and perform other operations on the Bitcoin network. It can be seen as the interface or gateway that determines how users interact with the Bitcoin blockchain. Bitcoin Core’s role is similar to how Google Chrome provides the functionality required for users to connect and browse the internet. Just as there are multiple internet browsers besides Chrome, there are multiple Bitcoin software clients besides Bitcoin Core. However, none of these other clients have been as widely used or influential as Bitcoin Core, which is still considered the Bitcoin software client that best preserves the ideology advocated by Satoshi Nakamoto. Additionally, Bitcoin Core continues to benefit from the efforts of a large global development team, often setting standards for other Bitcoin software clients. The large size of the Bitcoin Core development team makes it difficult to track all contributors. It’s worth noting that becoming a Bitcoin developer has no special requirements. Anyone can join, leave, or choose the area they want to focus on for development. Developers do not even need to disclose their identity to be eligible to contribute to Bitcoin Core’s development.
Bitcoin Core Contributions:
As the original and primary software implementation of the Bitcoin protocol, Bitcoin Core sets standards for other clients and ensures the continuous operation of the network.
- Decentralization: By running Bitcoin Core, anyone can operate a full node and contribute to the decentralization of the network. This power distribution prevents any single entity from controlling Bitcoin.
- Security: Bitcoin Core’s strict transaction validation and complete blockchain records contribute to the network’s security. Attempts to alter past transactions are detected by full nodes, preventing fraudulent changes.
- Development and Maintenance: Bitcoin Core’s open-source nature allows developers from around the world to continuously improve it. This collective effort ensures that Bitcoin can adapt to new challenges and a constantly changing environment. In August 2017, Bitcoin Core led the activation of the Segregated Witness (SegWit) upgrade. This upgrade increased Bitcoin’s block capacity and solved transaction scalability, with one of the proposed solutions being the Lightning Network.
Bitcoin Core is not just software; it is the driving force behind the Bitcoin network. It ensures the system’s operation, maintains its decentralized structure, and safeguards the blockchain from fraudulent activities.
Institutions Focused on Supporting the Bitcoin Ecosystem:
In the early years, the development of Bitcoin was mainly maintained and supported by Satoshi Nakamoto and a few other volunteers. As Bitcoin gradually gained popularity and formed a market, developers began to receive Bitcoins, which gradually attracted external developers.
Bitcoin Foundation:
The Bitcoin Foundation was established in 2012 by Bitcoin Core developers Gavin Andresen and Jon Matonis as a non-profit organization primarily funding some developers. The organization aims to promote the development and adoption of Bitcoin and represents the Bitcoin community in communication and coordination with governments, businesses, and others. Its mission is to standardize, protect, and promote the use of Bitcoin cryptocurrency for users worldwide. The foundation is committed to advancing Bitcoin technology and innovation, playing an important role in the Bitcoin ecosystem.
One of the main sources of funding for the Bitcoin Foundation is membership fees. However, by early 2015, the foundation had nearly exhausted its financial reserves. Despite this, the foundation has made significant contributions to advancing Bitcoin technology and promoting its global adoption and application.
Chaincode Labs:
In 2014, Alex Morcos and Suhas Daftuar founded Chaincode Labs, a digital currency research organization based in New York that contributes to the advancement of the Bitcoin network. It focuses on the development, review, testing, and maintenance of Bitcoin software and also provides funding to independent Bitcoin developers in addition to its permanent team of Bitcoin developers. Some well-known Bitcoin Core developers funded by this organization include Pieter Wuille, Alex Morcos, Suhas Daftuar, John Newbury, Russ Yanofsky, Marco Falke, and Carl Dong.
MIT Digital Currency Initiative (MIT DCI):
MIT’s Digital Currency Initiative is another cryptocurrency development research organization that provides funding to external developers and its own dedicated Bitcoin Core development team. Unlike most Bitcoin development sponsors, the MIT DCI relies on donations to raise funds. Bitcoin Core developers associated with this organization include Wladimir van der Laan and Cory Field. Since April 2015, developers working with support from the DCI have contributed 14% of the Bitcoin Core code. In 2016, they also announced the launch of a $9 million Bitcoin development fund, which attracted donations from several large exchanges.
Blockstream:
Blockstream is a venture-capital-backed blockchain technology company founded by Bitcoin Core developers in 2014, including Gregory Maxwell, Jorge Timón, Matt Corallo, Pieter Wuille, and Mark Friedenbach. In its early days, Blockstream raised $21 million in Series A financing.
As a company, its main goal is to create side chains that allow interoperable transactions for Bitcoin, enhancing the scalability of the Bitcoin ecosystem. Blockstream has made many significant contributions to Bitcoin, from numerous BIPs (Bitcoin Improvement Proposals) and research on Segregated Witness to confidential transactions, cryptographic libraries, and the Lightning Network, among others. Its current products include the Lightning Network, side chains, and multi-signature wallets.
New Developments in Bitcoin Funding Organizations:
In addition to the examples mentioned above, many other organizations are directly or indirectly supporting Bitcoin’s development and maintenance, and cryptocurrency exchanges and other enterprises and organizations have begun supporting open-source Bitcoin developers.
Square Crypto:
Square Crypto is an independent research team created by Square with the aim of improving Bitcoin’s open-source software. According to the team’s mission, Square Crypto funds several developers committed to proposing and implementing Bitcoin Core upgrades. Square Crypto-funded Bitcoin Core developers include John Atack, Vasil Dimo, and Gloria Zhu. On the other hand, Matt Carlo is a permanent member of the Square Crypto team.
BitMEX:
BitMEX is an exchange that supports Bitcoin Core’s development by providing resources to developers. The program was launched in July 2019 and was the first exchange to offer grants to Bitcoin developers. It has provided a total of $1.7 million in funding (including $500,000 to the MIT DCI), with grants being offered via highly transparent projects with open-source unconditional funding contracts. The BitMEX Grants team currently consists of five members, including Gleb Naumenko, Sjors Provoots, Rene Pickhardt, Chris Coverdale, and Calvin Kim.
Brink:
Established in 2020 by John Newbery and Mike Schmidt, Brink is a non-profit organization dedicated to improving the Bitcoin protocol. It focuses on Bitcoin protocol development, aiming to strengthen the protocol and network through foundational research and development, supporting the Bitcoin developer community through funding, education, and guidance. Its funding is 100% from donations from individuals and organizations looking to support open-source Bitcoin network and protocol development. It has already released two rounds of funding. In June of this year, former Twitter CEO Jack Dorsey and his public fund Start Small committed to donating $5 million to Brink. Brink will receive $1 million in funding each year for the next five years.
Opensats:
Opensats is a non-profit organization focused on funding free and open-source projects related to Bitcoin and other initiatives related to education and research. Opensats provides a platform that transfers 100% of donations to projects and general funds without any fees. It is committed to funding Bitcoin and peripheral technologies, including the development of new Bitcoin and Bitcoin-related software, improvements to existing free and open-source software, education and promotion related to Bitcoin, and research on Bitcoin-related topics. In May of this year, Opensats announced a $10 million donation from Jack Dorsey’s charitable initiative #startsmall, which will be used to support the development of free and open-source software and projects with a focus on Bitcoin, decentralized social protocol Nostr, and related technologies.
Conclusion:
Since the birth of Bitcoin, various institutions, companies, and organizations have contributed to the development of the Bitcoin protocol, either through technical or financial support. As the market capitalization of Bitcoin continues to grow, the ecosystem based on the Bitcoin public chain will gradually expand, especially in the application of Bitcoin’s second-layer technology such as the Lightning Network and side chains. In the future, developers, companies, and organizations will develop broader businesses around this type of infrastructure.
