The Wall Street Journal: The Future of Bitcoin Rests on a Small Group of Mysterious Programmers

Source: Paul Kiernan, The Wall Street Journal

Andrew Chow started tinkering with Bitcoin in high school. At that time, this teenage programmer stated on his self-built website, "I want to work for Bitcoin in the future," and the site even provided a wallet address for donations, all while his parents were completely unaware, and he didn't even have a bank account.

Seven years later, Andrew is one of the few people capable of modifying the underlying code of Bitcoin. Currently, Bitcoin's market value is close to $500 billion. Despite the crucial role this group plays in the Bitcoin space, millions of Bitcoin users are almost entirely unaware of them.

Andrew and four other programmers currently serve as maintainers and administrators of Bitcoin Core. This is an open-source program that keeps the digital ledger updated across thousands of computers in the Bitcoin network. On February 9, their long-time leader departed, reducing the group from six to five members.

Since last spring, a series of cryptocurrency-focused trading platforms, asset management firms, and lending institutions have collapsed, resulting in a total market value drop of $2 trillion. When investigating the causes of this disaster, factors such as unprofessional governance, inadequate regulation, and lack of transparency often come into play.

Throughout this turmoil, Bitcoin has remained like the "gold standard" of the cryptocurrency industry. Although its price has also experienced significant fluctuations—having dropped about two-thirds since 2021—this oldest and most widely used cryptocurrency has consistently accounted for around 40% of the overall cryptocurrency market value for years.

To some extent, the current value and future potential of Bitcoin lie in the hands of the Bitcoin Core maintainers, a group of peers who often keep their whereabouts vague. Most of the maintainers' salaries are funded by a loosely connected group of donors.

At least once, these maintainers secretly fixed a vulnerability that, according to Bitcoin supporters, could have destroyed the cryptocurrency's value if left unaddressed.

With the assistance of more developers, these maintainers must ensure their software is compatible with the latest versions of operating systems like Windows and MacOS, and they must keep up with changes in transaction volume. This group of maintainers are the heirs of Bitcoin's inventor, a mysterious figure known only by the pseudonym Satoshi Nakamoto.

A statue in Budapest representing Bitcoin's anonymous creator, Satoshi Nakamoto.
Image source: AKOS STILLER/BLOOMBERG NEWS

Bitcoin expert and privacy advocate Jameson Lopp says that the maintenance and feedback work required for software exceeds what many people imagine, and in this regard, Bitcoin Core is no different from other software. He has previously written code for the project. "Its usefulness is diminishing. It has become more vulnerable. Therefore, all technology needs human maintenance behind it."

Take a typical tech company, for example; software developers are placed within a defined structure that includes various levels of management and different job requirements, and employees are subject to performance evaluations. If it is a publicly traded company, investors will also learn about its financial, operational, and management information according to disclosure standards.

In contrast, in the cryptocurrency space, the way information is disclosed to investors is not through submitting documents to regulatory agencies but rather through white papers, online message boards, and complex GitHub code repositories—this Microsoft-owned site is where Bitcoin Core is stored. The aforementioned maintainers and other software developers discuss important code adjustments and personnel issues in a public chat room weekly.

Given Bitcoin Core's open-source nature, anyone with a GitHub account can propose modifications to the program. The difference between maintainers and other developers is that they can approve these changes and write them into the GitHub repository. Subsequently, when users download software updates released approximately every six months, they can experience these changes firsthand.

"Wow, you're working for Bitcoin? That affects everyone's wallets; it sounds pretty scary," a viewer commented last summer while Andrew was live coding on the streaming platform Twitch. This is something he does every Monday at 2 PM.

"It is pretty scary," Andrew replied, his screen set to black, filled with lines of code. "But over time it becomes easier, especially when you know which things are dangerous to touch."

In the past 18 months, four Bitcoin Core maintainers have either left or handed over their responsibilities due to burnout or legal risks.

New maintainers are elected through a special vote, and discussions in the chat room can sometimes be quite heated. If a developer supports a candidate, they type ACK on their computer, representing acknowledgment; otherwise, they type NACK.

Bitcoin is a massive transaction ledger—the accounting unit in the blockchain. A 450GB database copy is stored across a network of tens of thousands of computers known as nodes. It is estimated that 99% of nodes are using a version of Bitcoin Core to record new transactions.

Developers say that Bitcoin Core is now ubiquitous, which contradicts Bitcoin's goal of remaining decentralized and not controlled by any organization or government. Other programs can operate nodes in the Bitcoin network, but experts point out that Bitcoin Core undergoes the most scrutiny, while other programs lack the security and functionality of Bitcoin Core.

Although the Bitcoin network rewards "miners" who use computing power to validate transactions, it does not have a compensation mechanism for the developers who keep the software running smoothly. Instead, some cryptocurrency companies and wealthy investors fund Bitcoin Core maintainers and other key developers through grants.

This funding model raises questions about potential conflicts of interest. "This issue often arises—the source of funding and whether there will be an invisible controlling force," said former Bitcoin Core maintainer Samuel Dobson.

Donors claim that Bitcoin maintainers can earn between $100,000 and $150,000 a year from them. In contrast, Alphabet's Google offers about $225,000 in salary for mid-level engineers, plus benefits, bonuses, and stock options.

Mike Schmidt, a director at the nonprofit organization Brink, says that three maintainers funded by the organization currently work in Brink's London office.
Image source: EVA MARIE UZCATEGUI/BLOOMBERG NEWS

Cryptocurrency exchange Coinbase Global Inc. stated in a filing with the U.S. Securities and Exchange Commission (SEC) that the current organizational structure of developers may limit Bitcoin's development. They indicated that changes made to the code could affect the "speed, security, usability, or value" of the Bitcoin network.

Currently, there is no public relations department in the Bitcoin space to respond to such concerns. Bitcoin users indicate that there is no formal organization managing their project. Besides implementing adjustments that the contributor team unanimously agrees should be made, Bitcoin Core's website states that maintainers should also "serve as the final gatekeepers to ensure that patches are safe and align with project goals."

Dobson stated that Bitcoin Core developers are constrained by their reputations. He said that any maintainer who makes harmful or unethical adjustments could damage their reputation and have their software permissions revoked by other maintainers.

Due to the decline in cryptocurrency prices, some companies that previously funded Bitcoin software development have gone bankrupt, such as the trading platform FTX and the lending institution BlockFi, while others are tightening their belts. Brink is a nonprofit organization that accepts donations and allocates funds to three Bitcoin Core maintainers and several other developers. According to Brink's executive director Mike Schmidt, the funds raised by the organization have decreased by 50%-60% over the past year.

These maintainers are spread across the globe and meet in person once or twice a year at Bitcoin conferences. Most of them maintain a low profile.

Hennadii Stepanov is responsible for maintaining Bitcoin Core's graphical user interface. According to his sponsors, he fled war-torn Ukraine to London in 2022. Michael Ford is responsible for building systems, which involves translating or compiling source code into executable programs, and he occasionally uploads photos from his parents' farm in Western Australia. Gloria Zhao, a graduate of the University of California, Berkeley, is responsible for writing and reviewing the code that manages the Bitcoin transaction verification process.

These three receive renewable grants from Brink and currently work in Brink's London office, located in the artsy Shoreditch area. Schmidt says he communicates with the beneficiaries monthly over the phone.

"We really don't want to interfere with what they are doing," said the Brink executive director, "but that doesn't mean we can't introduce them to others or suggest a project they may not have heard of."

Brink's beneficiaries must reapply for funding each year. When weighing different applicants, the board tries to assess the overall value of the developers to Bitcoin, Schmidt said, "This approach is highly subjective."

Andrew Chow graduated from the University of Maryland and is responsible for programs related to digital wallets. A digital wallet is a tool for investors to store Bitcoin. After graduating from college, he was employed by the financial infrastructure company Blockstream Corporation Inc.

Another maintainer, Marco Falke, primarily focuses on testing, and his sponsors include the cryptocurrency exchange Okcoin USA Inc., founded in China, and the investment firm Paradigm Operations LP. "We don't necessarily have to view it as some kind of generous act," said Okcoin COO Jason Lau, "it is indeed an investment in our business foundation."

In an email exchange, Falke mentioned that he grew up in Germany and has been wandering around Europe since leaving his job in New York City in 2020. His Twitter profile indicates he is currently in Malmö, a city in southern Sweden. Falke declined to disclose his current residence.

Wladimir van der Laan is the most senior maintainer in the group, having become the chief maintainer of Bitcoin Core in 2014, but he has been trying to step down from this role for the past two years. According to personal information displayed on the now-defunct Bitcoin Foundation's archived webpage, Laan previously resided in Amsterdam. He is funded by the Massachusetts Institute of Technology's Digital Currency Initiative, where SEC Chairman Gary Gensler served as an advisor before being nominated by President Biden.

In August of last year, Laan announced in the chat room that he would completely stop his maintainer work. "I feel exhausted and have health issues," he said, "I can't do it anymore." At Laan's request, his permissions in Bitcoin Core's GitHub repository were revoked on February 9.

Among the current maintainers, only Falke and Andrew Chow agreed to comment for this article. Laan and others did not respond to requests for comment.

Some Bitcoin Core developers have also received funding from Block Inc., a digital payment company led by Twitter co-founder Jack Dorsey. In early 2022, he created a legal aid fund to help developers avoid potential lawsuits. For example, there was a case in the UK where someone went to court hoping developers could help him recover allegedly stolen Bitcoin.

Gloria Zhao, a graduate of the University of California, Berkeley, is responsible for writing and reviewing the code that manages the Bitcoin transaction verification process.
Image source: BRINK

Resolving issues in Bitcoin Core is a delicate process. To eliminate vulnerabilities, most nodes in the Bitcoin network must actively upgrade their software. However, if too much information has been leaked beforehand, attackers could exploit the vulnerability.

"There have been many secret fixes," Andrew said in a phone interview.

Gloria Zhao mentioned in a video on the Okcoin website, "We always find vulnerabilities during code reviews; if it gets into the program, catastrophic events could occur in the Bitcoin network."

The most dramatic incident known to the public occurred on September 17, 2018. At that time, senior Bitcoin developer Matt Corallo discovered an "inflation" vulnerability in Bitcoin Core that, if exploited, would allow an attacker to use the same Bitcoin more than once.

This would undermine a key innovation of Bitcoin compared to other forms of digital data, which can be copied and pasted repeatedly. It is this innovation that ensures Bitcoin's scarcity and gives it value in the eyes of investors.

After discovering the "inflation" vulnerability, Corallo sent an encrypted message via the chat app Signal to the head of a large Bitcoin mining alliance. However, he initially only disclosed a less severe "denial of service" vulnerability.

As a result, the maintainers made adjustments to Bitcoin Core, including fixing both issues and advising users to upgrade their software. Three days later, once a sufficient number of users had downloaded the upgrade, the maintainers publicly announced and described the incident and the "inflation" vulnerability.

Notable cryptocurrency entrepreneur Samson Mow stated in a tweet last year that this "inflation" vulnerability "could have potentially killed Bitcoin."

Some Bitcoin players point out that there should be greater transparency regarding such incidents. "It's great to have such a small group of trusted people in the core area of this project," said Michael Folkson, an advocate for using Bitcoin who also participates in code reviews, "but if they do something sneaky, like tampering with the code while fixing vulnerabilities… once they inform the public that the vulnerability has been fixed, I believe they should fully disclose that process."

According to Andrew's statistics, since Bitcoin's inception in 2009, 17 people have been granted code modification permissions.

Bitcoin Core claims on its website to be the "direct descendant of the original Bitcoin software developed by Satoshi Nakamoto."

Before Satoshi Nakamoto disappeared in mid-2011, he/she handed over control of the code repository to a developer named Gavin Andresen from Massachusetts, an early Bitcoin enthusiast who previously created a website called Bitcoin Faucet that would give away thousands of Bitcoins to anyone who solved a CAPTCHA. He stated that his goal was to popularize this new form of currency.

Gavin Andresen, a developer from Massachusetts, served as chief maintainer before passing the position to a successor who later revoked Andresen's permissions.
Image source: PAUL MCERLANE/EUROPEAN PRESSPHOTO AGENCY

In 2014, Andresen passed the chief maintainer position to Laan. Two years later, Laan revoked Andresen's permissions and declared in a blog post that Andresen had become a burden to the project. Andresen did not respond to requests for comment from reporters, but he previously indicated that what seemed to concern Laan was something he had said that contained some inappropriate remarks.

In early 2021, Laan announced his intention to step down as chief maintainer. Last August, he announced in the chat room that he would completely stop his maintainer work. "I feel exhausted and have health issues," he said, "I can't do it anymore."

In June of last year, discussions about a successor to the chief maintainer role began to heat up, with current maintainer Ford proposing that Gloria Zhao take on the role. Notable Bitcoin developer Jeremy Rubin suggested they draft a job description first.

"No, I think there's no point in going through all that red tape," Laan replied.

"Then the important description of the maintainer's responsibilities is gone," Rubin countered.

Despite the glamorous nature of serving the world's largest cryptocurrency, a joke has persisted among maintainers that no one really wants the job.

Dobson announced in December 2021 that he would no longer serve as a maintainer to focus on his doctoral studies. Afterward, Falke declared that the next person to speak in the chat room would become Dobson's successor.

"Who do I go to for the wallet integration?" Andrew asked.

Falke congratulated him on becoming Dobson's successor.

"Ah, damn!" Andrew replied.