Bitcoin Core Development Funded with $8.4M in 2023 - Report
1A1z researchers Dan O'Prey and Mas Nakachi published a comprehensive report exploring the funding of the Bitcoin Core project. The study focuses exclusively on Bitcoin Core and 13 main sponsoring organizations that either actively hire Core developers or have active developer grant programs.
- The report authors note that not all data is available at a sufficient level of granularity to distinguish between Core and non-Core activities. The researchers had to rely on estimates based on the best publicly available information.
- According to the report, the Bitcoin ecosystem spent $8.4 million on Bitcoin developers in 2023. These numbers are expected to be significantly higher in 2024.
- In contrast, the Polkadot Foundation has already spent $87 million in the first half of this year, with $16.8 million allocated to activities equivalent to funding Bitcoin Core. The Ethereum Foundation spent a total of $61 million in 2023, dedicating $32.3 million to core-related activities, and has budgeted $100 million for development this year.
"It is a live, running, production software, securing a large amount of value that needs to be maintained, patched, and improved. But those that buy it, hold it, use it, or build on it have no obligation to fund it. It is a public good that suffers from the free rider problem," write the report authors.
- The report also finds that the number of actual developers working on Bitcoin stood at 41 active developers with at least 5 commits so far this year.
"This number is never likely to be huge given the complexity of protocol development and the nonlinear impact of engineering resources, but growing the developer pipeline is still a key requirement and a topic for the next report in the series."
- The report identifies 13 main sponsor organizations, namely Blockstream, Chaincode Labs, MIT's Digital Currency Initiative, Spiral, OKX, The Human Rights Foundation, Brink, Btrust, OpenSats, Vinteum, Maelstrom, Bitcoin For Open Source (B4OS), and 2140.
- "Many other organizations have historically funded Bitcoin and Lightning development, including DG Lab, Lightning Labs, Acinq, Bitfinex, Xapo, Bull Bitcoin, BitMEX, Crypto Advance, Hardcore Fund, Bitmain, Blockchain.info, BTCC and BitPay, as well as grant programs from exchanges such as Coinbase, Kraken, and Gemini (fka Opportunity Fund and now Superlunar). However, these Developer Grant programs are currently either inactive, infrequent or not exclusively focused on furthering Bitcoin," states the report.
- OpenSats and Spiral accounted for 62% of the total grant funding in 2023, while Chaincode Labs contributed 46% of the employment spending in 2023.
- Eight of the sponsor organizations rely exclusively on donations. The top three of these entities receive 62.25% of their aggregate funding from a single source.
"Bitcoin funding is still a young space so this level of concentration is to be expected, and becoming less so over time. By highlighting Jack it is not our intention to imply that he is doing too much but only that it would be healthier for the long term to increase the proportion of funding from others," was explained in the report.
- Another identified issue is the long term sustainability of donations, particularly the lack of predictable future streams of funding.
- Six of the 13 most significant organizations are legally registered in the United States. There are no organizations registered in or primarily focused on Asia.
- The number of organizations and the total funding have significantly increased over the years, but development still requires more financial support from a broader set of donors.
Read the full report here.
