In the last part of this series, we talked about the state of Bitcoin in Israel and the efforts of Israeli Bitcoin community organizers Meni Rosenfeld and Ron Gross in running the Israeli meetup group. Here, we talk about the next stage in the Israeli Bitcoin community’s growth: the effort to set up an Israeli Bitcoin Association. National Bitcoin organizations have been a popular subject lately, with the Bitcoin Alliance of Canada soon to announce its official launch and similar organizations in other countries now picking up worldwide. But what is the benefit of having a national Bitcoin organization, and what would such an organization do? At least for the case of Israel, Rosenfeld and Gross explain below.
Vitalik Buterin: So what as the original idea behind the Israeli Bitcoin Foundation-
Ron Gross: Association.
Meni Rosenfeld: We went with “foundation” previously, but now we usually use “association”; first, it’s a more accurate translation for the name which it has in Hebrew, and second we originally started to work as part of the global Bitcoin Foundation in the US, but right now it doesn’t look so good about our cooperation with them, because they have some very problematic terms for the partnership.
RG: I would say it’s their approach.
VB: But before we get into that, what was the original idea behind the Israeli Bitcoin Association?
RG: Well, the original idea that still holds is very simple: Israel today has a lot of issues around Bitcoin banking. It’s very difficult or impossible for Bitcoin businesses to open bank accounts. It’s hard for private people to deal with Bitcoin. Even wiring money within Israel from one person to another, if the word Bitcoin is on the transaction, a lot of banks will refuse the transaction. If they try to wire money abroad, it’s very difficult for people and companies to work with Bitcoin. There hasn’t been a lot of clear communication from regulators compared to other regulators in the US and Europe. So I think our first goal is to establish lines of communication between the community, businesses, the banks and the regulators, just try to get everyone to talk. The end goal is not just to try to get everyone to talk, but also to establish some sort of regulation that would allow businesses and people to work with Bitcoin.
MR: That’s one part of the vision for the association; the other part is to work on education and outreach, getting as many people as possible to know about Bitcoin and to know accurate information about Bitcoin, so that’s a continuation of what we’ve been doing all along with texts we wrote, information websites and so on. So we want to do that, but on a much larger scale.
VB: what are some of these texts?
MR: There is the website bitcoin.org.il. The vision was to run it as a community website; in practice it’s a content website where mostly Ron and I write articles on a few Bitcoin topics, usually how to use it and why we need Bitcoin ,what does it mean and so on. We want to be the go-to site whenever someone hears about Bitcoin and wants to learn more. Lately this site was a bit neglected, but we do plan to gather more manpower and develop it to be a more complete resource.
RG: This website, bitcoin.org.il, is the homepage of the Bitcoin community. From it, you can reach all the other relevant websites: we have a Facebook page, a Facebook group, a Meetup group, a wiki, an IRC channel, a Google group, so a lot of ways to communicate. Meni also moderates the Hebrew section of Bitcointalk. The meetups have been recorded and uploaded to Youtube. The meetups are for the general public, but we’re also having some private meetings with institutions, regulators and banks, just trying to get the information out there. Those are the types of people that don’t usually come to meetups. So we usually go to one of them and share the information.
MR: There are also more public lectures. People invite us to lecture at universities, companies, etc.
RG: an amusing anecdote that I’ll share with Meni’s permission is that he was once invited to a bachelor party to talk about Bitcoin.
MR: so apparently you don’t have strippers in bachelor parties anymore, you have Bitcoin lecturers. And they paid me.
VB: In Bitcoin?
MR: Yeah, I think it was Bitcoin.
Israel and the Bitcoin Foundation
Note: Those interested in seeing other views on the subject of the Bitcoin Foundation’s international chapters are encouraged to also read Jon Matonis’s clarifications here: https://bitcoinmagazine.com/articles/internationality-democracy-and-reforming-the-bitcoin-foundation-1382154402
And an op-ed by Aaron Koenig, organizer of the below mentioned discussions in Amsterdam, here: https://bitcoinmagazine.com/articles/how-to-decentralise-the-bitcoin-foundation-1382478074
VB: Next, to that other point you raised earlier, which is, what were the aspects of the Foundation’s approach that you found so problematic?
RG: So we started talking about forming the Israeli Bitcoin Foundation, as we called it, and the vision was always to be a chapter of the Global Foundation, even before they came out and publicly announced that there was a chapter program. We needed an organization for Israel, and we wanted to cooperate with the Foundation. We approached the Foundation and started a dialogue, and we were then selected as one of the five countries to work with the alpha program for the chapters; we discussed this locally, and then we started getting the terms from them. So first we got the more general terms in an email, and then we got the official contract that they proposed. Basically, they proposed a sort of a revenue sharing model, where they will collect all of the member fees and the donations and within a certain period, maybe on month, they will transfer a half of that – a half of the member fees and a half of the donations – to us. And we won’t have any option of accepting either of these on our own.
At first, we were basically alone with them. We didn’t know who the other groups were; we were discussing this internally, trying to understand, is this acceptable or not? We sort of reached an agreement that maybe we’ll do a 50 share of the member fees, maybe, but the donations I think were a no-go. We needed to maintain a way for anyone who wanted to donate to the Israeli association to do it without having half of the donation taken away. We started reaching out and finding other similar organizations in other countries. We tried to reach most or all of the pilot programs and a few other organizations that weren’t in the pilot program.
We just had a few meetings in Amsterdam, and they were all in the same situation as us. They received the same kinds of conditions, sort of a dictated proposal from above without an open dialogue, and we reached a conclusion. None of us, none of the people in that room want to just accept these kinds of conditions written in a top-down fashion by the Foundation that is effectively today a US foundation. Nobody appointed them to be the world foundation, and in the latest election even though one or more of the candidates were foreign those candidates weren’t elected. The foundation is de-facto a US entity. So all of us decided that we don’t want this kind of cooperation with them, and we are not sure what we are getting in exchange for all these fees that will be sent outwards.
We actually talked about creating something else, and we are still discussing what that something else will be. The general direction right now would be for each country, and each section or area to establish their own organization, and for these organizations to have some loose ties with some kind of umbrella organization but without necessarily any formal structure, voting or fees because we tried to think, if we had a sort of global Bitcoin organization, what sort of decisions would this organization do, and we didn’t find any decisions that this organization would do. It’s not authorized to make changes to the Bitcoin protocol, as that is not how the Bitcoin protocol works, and regarding regulation, that is specific by country or by region. We are still discussing the details of this.
MR: The general idea is to build the structure gradually and naturally. We can start with each country building their own association, and of course share information, tips and whatever and cooperate if possible, and from there we see what kind of structure makes sense for the organization and go with that, and maybe in the future we will have something more formal if we need it. One thing that I am told is that when working with regulators you have much more power if you are part of a bigger global movement, so if there’s benefit in creating such a formal global organization, then we’ll do it, but we don’t have to do it right now.
RG: I have to add on this, in our communications with the Bitcoin Foundation, they have been communicating with us, mostly via email (I haven’t had a Skype call with them for a long time), but we got a sort of mixed message. We got a message from them that they are actually setting up a new umbrella organization that the Bitcoin Foundation will be a member of. We interpreted this as a positive signal that they are actually trying to do the right thing, but then we learned in Amsterdam that this is not actually the case.
They are setting up a new organization registered in the UK. They haven’t discussed this with anyone in the UK organization, they just ended up doing it in their own, and they intend for the board of directors of the new organization to be the exact same board that they currently have in the Bitcoin Foundation. So it’s more like outsourcing their management not to get sued by the US; I don’t know the motivation, but this is not the type of global organization we want to build.
VB: I was [talking to Anthony] of the Bitcoin Alliance of Canada, and one idea he had was to have a sort of global organization based on something like the global Green Party movement. Or another example might be the global Pirate Party movement as well. So it would be a loose charter that any organization would abide by, but otherwise it’s just informal cooperation.
RG: We have a Google Group right now where we’re discussing these issues. We are of course open to working with the Bitcoin Foundation; we want to include them, we don’t want to fight anyone else. But we want to treat them as equal members in the global organization,and this is apparently not how they see things.
After the conference we broke up for a bit, everyone is trying to get the opinion of their local organization. We also have a meeting with our board where we update the board on what happened in Amsterdam and try to get a clear message from the Israeli organization. We haven’t had the chance to update everyone. A lot of organizations are in the same kind of state. It will take a few weeks or a few months, but we will get something going.
Vitalik Buterin is a co-founder of Bitcoin Magazine who has been involved in the Bitcoin community since 2011, and has contributed to Bitcoin both as a writer and the developer of a fork of bitcoinjs-lib, pybitcointools and multisig.info, as well as one of the developers behind Egora. Now, Vitalik's primary job is as the main developer of Ethereum, a project which intends to create a next-generation smart contract and decentralized application platform that allows people to create any kind of decentralized application on top of a blockchain that can be imagined.