PANELISTS: STEPHAN LIVERA (MODERATOR), NIFTYNEI, NVK, DREAD, BEN PRICE
CONFERENCE: BITCOIN ATLANTIS 2024
TABLE OF CONTENTS
- Understanding OpenSats’ Mission
- Personal Motivations for Joining OpenSats
- The Role of OpenSats in Funding Development
- Operational Insights into OpenSats
- Decision Making and Impact of Grants
- Challenges and Opportunities in Open Source
- Final Reflections and Takeaways
Introduction
This article delves into the transformative role of OpenSats in the Bitcoin ecosystem, as explored in a panel from Bitcoin Atlantis 2024. Discover how this pioneering 501(c)(3) nonprofit champions open-source development through philanthropy in Bitcoin, empowering developers and fostering innovation and freedom worldwide. Moderated by Stephan Livera, the panel features OpenSats Board Members NiftyNei, NVK, Dread, and Ben Price.
Understanding OpenSats’ Mission
Stephan Livera
Thanks, everyone, for joining us. We’re going to talk a bit about OpenSats, open source, and development in Bitcoin, which is associated with freedom technology. It’s an important topic we’re going to delve into. I think a good spot to start is with the question: Why and what problem are we solving here? So, what problem is OpenSats solving?
Ben Price
OpenSats, for those who don’t know, is a 501(c)(3) nonprofit. It’s pretty simple. I think one of the main things we solve is the issue of handling donations—small or, more often than not, sizable ones coming from big organizations. We’ve probably raised over $12 million now. But we keep it all in Bitcoin, from top to bottom. One of the things I’m most proud of is that Gigi helps mostly with our operations, but we have basically a few bucks in fiat, and the rest is just held in Bitcoin. So, we try to practice what we preach.
All our payouts—you can donate in fiat and get a tax deduction, reducing taxes—but all of our payouts go out in Bitcoin. We’re really supporting Bitcoin, Nostr, and frankly, we’re 100% pass-through. There are a few other really good organizations, but I’m really proud of what we do. I think we’ve given out over 85 grants now. OpenSats has allocated about $8 million of our $10 million, and a lot of that goes to fund Bitcoin core developers, Nostr developers, and people building on Layer 2, which we can get into. Everyone kind of brings their own subject matter expertise, but I think that’s the gist of it.
Personal Motivations for Joining OpenSats
Stephan Livera
All right. Let me rephrase the question slightly for you guys. Why did you get involved? I mean, this is a volunteer project; you don’t get paid, right? So, tell us, why do this?
Dread
What a question! I’m really grateful to be here. There are amazing people here, and some of those people are on the board. The board has nine members, and in organizing this board, Ben and a few other co-founders really picked people that I respect. I appreciate not only their knowledge in the space but also their character as people. If you look at OpenSats, it’s not just a 501(c)(3) pass-through; it’s a bunch of really high-integrity people who are really interested in growing not just Bitcoin but in making the world a better place, as corny as that sounds.
When we do project selections, it’s a very open process where we all discuss what we think about the project, and we talk about our personal opinions. They’re not always agreeable. Like NVK can tell you, we have opinions. So, I think the main reason that I’m really passionate about this board is that I know this board is a microcosm of the actual Bitcoin community, and we represent what people actually want. And I think we represent that in the way we fund projects as well.
NVK
I joined because of Pablo. Ben founded it, and they were running the joint. I really wanted to fund Pablo’s NDK on Nostr. I was talking to Jack, and then, and that’s it. We sort of ballooned the thing, and we’re going to get a lot of money out to good people to build good things. It’s needed, right? There is enough money in Bitcoin; that’s a big misconception. It’s just that it’s hard to channel it, hard to manage it, hard to find the right project, and hard because the devs don’t know how to ask for money. It’s really about creating some efficiency in the market, right? Like just trying to matchmake and do a good thing, ensuring that the money doesn’t go to the government. Instead of paying taxes, if you’re an American company, you can just give it to OpenSats. It’s the equivalent of paying taxes. It’s great.
NiftyNei
Yeah, I was excited to be part of OpenSats because, having worked in open-source software for such a long time, you can really see the impact of not having good sources of funding for builders. It’s one of the tragedies, I think, that a lot of talented individuals want to be compensated for their work, and open-source, especially in Bitcoin, isn’t well-known for offering good career prospects, etc. So, having an organization focused on raising money and directing it towards projects that significantly contribute to the ecosystem is crucial. The problem with open-source is that the value often accrues not to the creators but to the users, right? And if you’re building decentralized software where transactions are peer-to-peer, you typically eliminate the middleman.
This aspect of peer-to-peer protocols means it’s really hard to build sustainable funding for any open-source project because you’re creating tools that facilitate direct transactions among users. There’s no one in the middle. So, having an organization that can, as Ben was saying, send 100% of the funds we receive directly to the people building these innovative decentralized solutions is critical. If we want Bitcoin to continue being a place where top engineering talent can come to work on projects they’re truly excited and passionate about, without worrying about how to monetize their contributions to peer-to-peer protocols, then supporting such initiatives is essential.
The Role of OpenSats in Funding Development
Stephan Livera
Yeah, great explanation. So, let’s talk a little bit. I think NVK touched on a really important point, which is that there are people who want to make donations and people on the other side who need donations to do what they’re doing, but you need these coordinating entities like OpenSats that help smooth that process. You were touching on this a little bit, but do you guys want to elaborate a bit on that idea?
Actually, I’ll give even a personal example. I’ve had people reach out to me, being like, ‘Hey, I’ve got some funding, and I’d like to donate it, but ideally, I need something that’s like a 501(c)(3) so I can get the tax deduction,’ or potentially they don’t know who to give it to because maybe they’re like a podcast listener. They’re not necessarily clear who’s in the space, who’s asking for it, right? Who’s good? And the other thing is domain expertise. Who actually knows who’s good, who’s actually doing something useful or valuable? So, any comments there, or maybe Ben, you want to start and open up on that?
Ben Price
Yeah, that was a problem we identified. We tried to talk to a lot of donors and organizations. One of the things that people often like is they want to—I don’t think there’s a shortage of people who want to give back to Bitcoin, whether it’s individuals or businesses, but oftentimes there’s a brand reputation risk and really there’s a domain expertise risk. I think all of us specialize in one thing. I’m probably the least smart person on our board. Dread is really good with international projects, NVK is obviously a hardware guy, Nifty is really good at Layer 2, we’ve got James O’Beirne who’s our core domain expert, of course, Matt Odell focuses on privacy, and Janine on privacy as well. Everyone kind of brings their own thing, but you can’t be the best in the world at Layer 2 or privacy.
So, maybe a big exchange comes along or an ETF wants to give back, they don’t particularly know or have the ability to pick and choose 10 amazing projects in the space. I mean, they probably can, but the hit rate might be lower than they like, or maybe they fund someone directly who ends up doing something that is bad for their brand. So, it’s kind of nice. We act as a pass-through organization, and we are truly a pass-through organization because 100% of what you give goes through.
We’re really proud of that. A lot of charities structure themselves where they take, if it’s like a university-associated nonprofit, sometimes up to 40 or 50% of your donation to fund someone doing rubber stamps. And so, we really just want to have a decentralized currency, we can give it right to the end user.
I believe the challenge we address for big corporations and large donors—like the instance where we received a $10 million donation—stems from their desire to give back. Despite their intentions, the operational complexity escalates quickly. For example, distributing 80, 90, or even 100 grants is essentially a full-time job, one that Gigi has managed exceptionally well, proving to be a rock star in this capacity. This demonstrates the inherent difficulty in scaling such efforts as the volume of donations and grants increases.
NVK
One really cool thing about the domain expertise part is that for Nostr, new tech, we wanted to get the money out, and it’s hard for people to evaluate, right? So we put together a committee. There’s a committee of Nostr peers, and then we rotate some of the people, so it doesn’t get stale, and they can evaluate the proposals of their peers. So, we’re really trying to be on the ground, trying to understand where the money would make the most impact, as opposed to looking at this cool thing my friend is working on, and can you please fund it.
Dread
And we’re also trusting the proof of work we’re seeing in the communities like I’ve been in since maybe 2020 or 2021 with people like D++ and René Pickhardt, and I’ve seen them on the ground working in the Lightning Network, pushing against narratives, and making sure they’re doing what they think is the best thing for the network for a long time. That’s one of the reasons why René Pickhardt was kind of an easy choice for one of our long-term grantees.
It’s people like that, people like Anita Posch, who are actually on the ground doing things that we can actually see, and the board can see proof of work without having to wonder if they’re actually doing it. So, it’s a combination of expertise in the domain. We have a Lightning subcommittee with Lisa as part of it, we have the Nostr subcommittee, and then what we can also see in the community and talk to you guys, and you can tell us who’s out there working hard, and then we make our decisions based on that.
NVK
I think it’s also important for people to understand what ‘100% pass-through’ means. I don’t think people quite understand. There is no funding for operations at OpenSats from the general fund. We make zero money there, and there are no t-shirts, there are no hats, there is no travel, there’s nothing. It’s literally all the money that’s donated goes directly to the projects—not even the banking fees are on that, right? So, we were fortunate enough that somebody is willing to now make a donation just for operations, but it does not come from the general fund.
Operational Insights into OpenSats
Stephan Livera
Could you also explain what the general fund is and what the other components are?
Ben Price
So, there are two major funds we started with. Initially, we envisioned the organization as a place where anyone could come. A few years ago, when I started it, the idea was that there would be hundreds of projects and developers building amazing things. We were really supposed to be like an exploration platform, a way for people to learn about their favorite Nostr project, Bitcoin project, or Zeus wallet. Maybe you wanted to fund Lisa and some work she’s doing on Layer 2. The idea was that people would have their own profiles and project pages, and you could donate directly to them. Instead of each one having to set up a nonprofit or some sort of tax-beneficial way to donate to them, you could give to us.
What changed, and I think what improved in terms of effort and impact, is that we received some very large donations and could get very serious about taking incoming applications. So, the general fund is funded by most donations. Most donations didn’t actually end up going to a specific project. Some did, but most people just wanted to give, and for us to do our best to allocate to the projects that we thought were having the highest impact.
We’ve seen millions of dollars build up in what we call the Bitcoin general fund. You can also donate to the Nostr general fund if you would prefer that your donations go there. I think the idea is that we could get even more grant money. There could be a Layer 2 fund, a fund for privacy, a fund for international development. Each one would be led by subject matter experts.
But if you’re looking at the numbers today, I’d say we have many millions of dollars in the general fund. Anyone in the Bitcoin general fund and anyone working on Bitcoin can come make an application, explain their case. If you’re a core developer or someone really important to the core infrastructure, you can apply for a multi-year grant. But we also have people who come in with a really good idea that will help others build on top of it later. Maybe it’s a one or $20,000 grant for four, five, six months. So, the Bitcoin people apply to the Bitcoin fund, Nostr people apply to the Nostr fund, and I think that will probably expand as we can get more granular over time.
Decision Making and Impact of Grants
Stephan Livera
So just speaking about projects generally, I think people might be interested to learn a bit about how projects are decided and voted on. If you guys could just talk to that process, like what gets funded, what doesn’t get funded?
Ben Price
I’ll go through the general process, and then maybe everyone can give their opinions because ultimately, it’s up to a subcommittee to evaluate, and then the nine-person board, where five out of nine people have to agree. You’d be surprised how many five-four votes there are, or, how some things are stuck in limbo for a while. But the general flow is pretty much the same. If you’re a Bitcoin developer or a Nostr developer, you come in, we have an ‘apply online’ button on opensats.org. Depending on whether it’s a Layer 2 project, a Nostr project, or a Bitcoin project, it’ll go to the appropriate subcommittee.
So, if you’re a core dev, James O’Beirne and our core team will look at it. If you’re a Layer 2 project, Nifty and her team, Ben Carman, and a few others in the space will look at it. There are separate pools, and the subject matter experts really evaluate it. They go back and forth; everything’s done on GitHub, everything is done out in the open, so we have records. Ultimately, if the subcommittee thinks that there’s some credence here, maybe we go back to the grantee and say, ‘We really like this, but we don’t like that,’ or ‘Can you explain this more?’ You make it through to the board for us to give the approval, go or no-go.
From that point on, it moves to our operations team, and we send out hundreds of thousands of dollars every month to 70, 80, 90 projects, and that’s only going to grow. After that, there is a check-in process, so every 90 days, the grantees have to give a progress report, and the board will evaluate that and make sure you’re doing what you say and the money’s going to good causes. But everyone sees the types of projects differently. We funded a few VC-backed projects, some are long-term core developers. I’ll let the rest of the team get into the details, but that’s the general process.
Dread
I think there’s a very important part of the process that I really appreciate, and it’s the vetting part. Right before the subcommittee approval, and as we’re doing our votes, we usually have pretty long conversations on the thread to discuss not just the project but also the person or team behind it. We consider what this team has built before, their reputation in the community, and a lot of factors related to the quality of the people working on the project.
Additionally, each project application must list references, and we also talk to those references to ensure that we’re not funding a fly-by-night operation by someone with only two commits on GitHub who launched their account last week and is asking for a grant.
We’re looking for individuals who have been actively and passionately working on a project that they would be trying to succeed with, with or without our grant, because we’re in search of passionate developers and contributors. And to me, this vetting process has really enabled us to issue some really high-quality grants out the door in a rapid fashion too, because it’s surprising how quickly nine people can come together on a project if it’s truly a good idea.
NVK
It’s really cool because there’s a lot of very blunt honesty involved, and I think everybody comes from a very good place in how they’re voting, even if it’s a negative vote. It’s about the impact, right? Is this project going to move the needle? Does it need to exist? Is it potentially breaking something else? For example, even if a project is VC-backed, maybe it’s still small, and they’re saying, ‘Hey, listen, if you help us a little bit economically, we can build this part right that we wouldn’t otherwise because it’s not economically that interesting to us, but we can maybe integrate Nostr better,’ or things like that. It’s kind of special.
Dread
I really think that the effort that goes into it organically leads us to have offshoot conversations about an entire topic, like education or grants for offsites, for core meetings, specifically because we anticipate a lot more applications of that nature that we want to build a policy around. So, we’re organically growing this really cool method of grant giving just based on our conversations with each other.
NiftyNei
One thing I appreciate seeing in applications, just whenever a project comes in for me, is people building on projects that others have started. Carrying on work that maybe someone else has pioneered or contributing to a bigger project that’s maybe bigger than themselves, especially in protocol. So, helping build out a protocol, maybe there’s a cool idea on the mailing list, and you want to spend the time, energy, and effort to actually try out and see if that’ll work.
Those kinds of projects excite me because there are lots of great ideas in the space, lots of people building really cool, important projects already, but getting new contributors and people who are going to spend the time and effort to see if this cool new idea about how to do Mempool relay, etc., will work—I don’t think we have anything in that area—but those kinds of applications are definitely ones that I think are the things I’d like to see more of.
We definitely have a great set of them, but I think that’s the sort of work that would be really cool to see more people doing so that then OpenSats can help support it. One of the things I think that’s really true is if people aren’t doing the work, there’s nothing for us to support, right? We need people to have shovels in the ground on projects before we can come in behind them and say, ‘Okay, what you’re doing here is really cool. How can we help and support this thing that you’re doing?’
And if we don’t have someone doing cool work, we have all this money—where are we sending it, right? So, I think that’s definitely something to keep in mind if you’re looking around for new projects to contribute to, wondering how to get an OpenSats grant. Find something cool or a cool idea or project that open-source people already in the space are doing and building, maybe figure out new ways to contribute or new ways to extend and continue the conversation in a way that involves building something or a project.
NVK
Are you working on thankless stuff? For example, are you fixing bugs on an open-source project? You’re maintaining, you’re reviewing pull requests? Please apply. That’s the non-sexy thing that you should really apply for. We need more people doing that because it’s easy to apply with a new idea you want to create. Maintaining is harder than creating sometimes. Especially in open-source software.
Ben Price
I would just like to clarify that our mission is to support a sustainable ecosystem of free and open-source software contributors, or contributors to Bitcoin, and any kind of tools and technology that help Bitcoin flourish. So, the most straightforward opportunity might be core developers, many of whom were underfunded or unfunded entirely, and that was our focus in the first year. But another example is that we have three fully funded designers who started Nostr Design, akin to Bitcoin Design.
Any of our projects can actually go to these design teams for free design support. We also have Renee Picard on a multi-year long-term support grant; he’s more of a researcher. We funded Tor, which supports privacy infrastructure and helps Bitcoin flourish, even though it’s not necessarily Bitcoin-related. So, really, as long as you’re working on free and open-source software and it’s related to Bitcoin or aids Bitcoin, and not related to ‘shitcoins,’ we will strongly consider your application. Please, come apply. There are funds available.
NVK
I’m going to highlight a couple of areas that would be really nice to see more of in applications. One area is embedded work. It’s challenging, there aren’t many people doing it, and it’s difficult to find jobs in that field. I encourage you to engage in some open-source embedded work related to Bitcoin, freedom, and all the good stuff we focus on, and then apply. The other area is security. If you’re a security researcher, you can’t just live on bounties. So, consider applying with a proposal detailing which projects you plan to pen-test and work on. Having such expertise would be super cool.
Dread
It’s precisely what we really need. I’ve just reviewed the list of applications we have, and there are many. Recently, we’ve received fewer than two dozen applications that were internationally based. We tag each application with different labels, and one of them is ‘international.’ I would love to see more international applications come through because they are also strongly considered due to the regions they’re assisting. For example, we funded a small grant for Bitcoin education in Nigeria, and the recipient is using those funds to construct a building for a Bitcoin school.
We’re also supporting Vexl, an impressive P2P app in Europe, helping people acquire non-KYC Bitcoin. We would love to see applications that demonstrate real-world impact like these from all over the world: Africa, Asia, the Caribbean. We have ample funds available for projects that show real-world value, use cases, and proof of work. We’re not just looking for the quick ‘I have a GitHub account, please fund me.’ We want to see applicants who work on things, contribute to other open-source projects, initiate something on their own, have an idea, and then apply.
Challenges and Opportunities in Open Source
Stephan Livera
So, I’m going to ask another question that hopefully sheds some light for people. What do you think a lot of Bitcoiners, maybe non-developers, are not understanding about open source? What are some things that are not apparent to an everyday hodler out there? Do you guys have any ideas on what open source realities they might not understand are?
NVK
There are a lot of people who don’t want to change Bitcoin, for example. That’s fair. You don’t want to change the protocol too much. However, software dies if it doesn’t receive maintenance. Software is akin to a living tree, and if you want to maintain it at a certain size, you still have to tend to it every day. And we need people to tend to it.
We need people to keep the software up to date, working on all platforms, fixing bugs, addressing new bugs. Fixing the Unix time bug, is a problem. Bitcoin will perish if we don’t address it. We know how to fix it; we’re just not going to do it for a little while. But it’s very important that the software is maintained, even if you don’t want to add features to it.
Ben Price
I would say the main reason I wanted to start OpenSats was to address the tragedy of the commons. I don’t think the everyday person, like my mom, for example, truly understands that if a project is truly decentralized, open-source, and lacks a central funding mechanism, there is this tragedy of the commons where entities like Coinbase can benefit from it, and my company can benefit from it, along with all these value-accruing agents that operate at the edges. However, the people who are maintaining the core protocol, the second layer, or privacy tools on top of it, often do so out of goodwill.
Maybe they are fortunate enough to receive a grant, but unlike at a VC-funded startup or a ‘shitcoin’ protocol that pre-mined millions of dollars to pay developers, these contributors are genuinely altruistic. Consider how Hal Finney started contributing for free on day two or day five, and since then, tens and hundreds more of the world’s smartest people have contributed. But there’s this free-rider problem where if companies like mine don’t give back, these invaluable contributors may leave the ecosystem. They’re rational; they want to earn a living, they want to support Bitcoin, and open-source contributions aren’t a viable way to do that unless there are grant-giving organizations.
So, I think just realizing that the most important people maintaining, or the smartest people in the world maintaining what I believe is the most significant development in the world, are working for free. And if that realization hits you, you understand you can give back to many different causes, but supporting this is one of the most important and impactful ways to contribute.
Dread
I’ll add what Matt Odell would probably say here, which is that all net profitable Bitcoin companies should be giving back to Bitcoin. I will also say, and this is something Lisa is probably going to be able to talk about a lot more since she’s a core contributor to Lightning, that it’s not only thankless, as NVK mentioned, but it also involves reviews. You could be working on an open-source project for a very long time without any reviews, without anyone telling you how you’re doing, without any performance ratings.
That’s not how open-source development works, so I think that’s something people need to really consider when moving from a traditional programming or development job into open-source. You’re entering a whole different community that evaluates proof of work in a different way. It’s based on the product that’s being built, not necessarily on how well you coded a specific PR. But I’ll let you talk more about that.
NiftyNei
I think that leads into the point I wanted to make about the general public and the projects that we’re funding, especially the ones that are more on the open-source maintenance or research side. A lot of that work is really invisible. If someone invents a new protocol, it’s going to take years for them, probably, to spend time working on building a tool that developers can use. So then that means the general public will take probably another few years after that for someone else to come in and figure out how to make it accessible to Bitcoin users on a day-to-day basis.
So a lot of the things that I think are priorities for funding in the open-source ecosystem are going to be stuff that most people have never heard of, will probably maybe never be able to experience or spend time with. A lot of it is money that goes into building really important critical infrastructure that won’t really maybe see the light of day for half a decade to a decade from now. And without this investment in it, we’re not going to get to the future where we get to use all these cool new primitives for cryptography or new ways of sending money quickly using Bitcoin.
NVK
Think about the library secp256k1. Your life depends on it if you’re a Bitcoiner. And there are maybe three people, or maybe five, major contributors. And there are pretty much just those five people who fully understand it. So, you have the research level, then you have the base level of the software, and then you have all the tooling that needs to be built so that normal developers can go and build stuff with it. And all this needs to work on a longer timeline if you’re not selling a ‘shitcoin.’ It’s hard to fit that into a traditional business cycle perspective. And that’s, I guess, where OpenSats really shines, in bridging that efficiency gap.
Final Reflections and Takeaways
Stephan Livera
All right, well, we’ve got 1 minute and 20 seconds left. So, if there’s one takeaway you can share, please make it in about 15 seconds each.
Ben Price
We’re all here for the right reasons. At the open-source stage, Bitcoin, I think, is the most influential thing that has happened to human civilization, probably ever. Support the people building on it, support the people who give you the reason, that give you some hope in life.
Dread
Bitcoin is freedom of money. Nostr is freedom of speech, and we’re all out here to 100% pass-through anything that you give us to keep building that. Thank you for your contributions and keep them coming.
NVK
If you’re a developer stacking commits and you’re very good, and you may not be interested in the monetization path for now, consider applying. We really review all the applications, and it’s worth your path.
NiftyNei
I second that. If you’re working on something cool, don’t hesitate to submit an application. I talk to lots of really good projects on a fairly regular basis, and I feel like I’m constantly fighting with them to get them to apply for funding. It would be really great if I didn’t feel like I was pulling teeth to get people to just fill out an online form.
NVK
It’s okay to ask for money!
Ben Price
It’s the best time ever to be contributing to open-source software. It’s super impactful, and we have millions of dollars thanks to generous donors. That’s super cool. Come apply, come make it happen, stay away from the private sector, and work on Bitcoin.
Stephan Livera
Well! That’s all we have time for put your hands together for OpenSats!
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Also read: Crossing The Chasm: Early Adopters To Mainstream
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