WBD284 Audio Transcription
Funding Bitcoin Development with John Newbery
Interview date: Friday 4th December
Note: the following is a transcription of my interview with John Newbery. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to John Newbery to discuss his decision to leave Chaincode Labs, funding for open source Bitcoin development, starting Brink and what he is working on developing.
“Having an organisation that exists to bring on new protocol developers and fund existing protocol developers brings much more benefit to Bitcoin than I could by writing code.”
— John Newbery
Interview Transcription
Peter McCormack: Morning, John, how are you?
John Newbery: Hi, Peter, I'm doing well. How are you?
Peter McCormack: Not bad. So, last time we spoke, I flew all the way to New York to sit next to you and have a conversation. Now, we're in a very different world where actually, I wouldn't really have had to get on a plane to come and see you right now, but we can't even sit in the same room.
John Newbery: No, it's 2020.
Peter McCormack: 2020, man. So, how's 2020 been for you?
John Newbery: It's been interesting; it's been interesting for everyone, but the biggest change has been moving back to the UK; so, I'm currently back in London.
Peter McCormack: Yeah, why did you move back?
John Newbery: It was time. I left the UK in 2010, so it's been ten years and I just wanted to be closer to family and friends.
Peter McCormack: Okay, fair enough. Are you glad to be back; settling back okay; missing anything about the US?
John Newbery: Well, everything I miss, I miss from before March. My life in New York disappeared in March. I didn't get to go into the Chaincode office, didn't get to do all the other things I loved there. So, I miss them, but I don't miss them because I moved back to England; I miss them because they disappeared with the rest of the world. And, yeah, it's nice to be back, it's interesting. It's not the same as when I left it when I'm not seeing as many people as I thought I might, but that will change.
Peter McCormack: Well, at least you won't have such a bitter winter because, I can't remember if it was that trip I went on, I don't know how I'd done it; I must have been to the States around ten times and then I hit a winter in the States and, for some reason, I'd never hit a winter. Those New York winters are so freaking cold!
John Newbery: Yeah, they're brutal; they can be, they really can be. A couple of years ago was very, very cold. Last year was not so bad, but yeah, it can be really cold there. So, I mean, UK's not so bad; just got four months of rain ahead of us, so, yeah!
Peter McCormack: After the last four months of rain! We had a couple of weeks of sun, I'm pretty sure, but I was locked in the house like everyone else, so I didn't see it. Anyway, we're here to talk about development, open source dev; you're going to teach me everything about open source dev today. So, I'll tell you where we'll start.
Bitcoin's now nearly 12 years old; is it? Yeah, nearly 12 years old. We've clearly got more people working on it than ever before, but we still don't have enough.
John Newbery: Yeah, I agree, I think more is needed. I was on a podcast recently and the host asked me, "Is there enough funding for open-source developers in Bitcoin?" and my answer there was, "You can answer that question in lots of different ways". One is, I look at the people who I think need funding right now and I think they're mostly funded, so there are two sides to this: there's the supply of skilled and experienced protocol engineers; and then, there's the supply of money to pay those people and we need both to go up in concert.
If we run ahead of the amount of skilled developers in funding, then all that additional funding will do is either go to unskilled developers, or will go to bidding up the price for the scarce asset, which is protocol developers; and, if we run ahead in terms of the number of people who know how to develop the protocol without funding, then those people won't be able to support themselves. So, we need both: we need to increase the number of people who can work on the protocol; and, at the same time, increase the funding so we can pay those people and they can do that for a living.
Peter McCormack: Do we know what the ratio is of those people who are funded in relation to those people who are kind of hobbyist contributors?
John Newbery: I don't, but it's a power distribution. So, if you look at the mailing list or the repository, there are a small number of people who do the vast majority of the contributions. I think one of the reasons is that as soon as you start making impact with changes, you know this is the thing that you want to spend all your time on, and you somehow find funding.
I think that's the same for most open-source projects; it's a power distribution where most of the work is done by a small fraction of the people.
Peter McCormack: Is there anything else like Bitcoin where you have people contributing like this, but there's this active need to find funding for them; is this the same as anything else?
John Newbery: I don't know other open-source projects as well, but one thing that is different about Bitcoin is many of those other open-source projects are centralised around some organisation. It might be a foundation, but it's set up explicitly to guide and lead the development of that open-source project. Or, it might be under the umbrella of some corporation that is creating an open-source project, but is in charge and is guiding what happens with that open-source project. So, they have funding, they have centralisation, they have command and control of what's going on in that project.
Bitcoin, I think, is unusual in that it is so decentralised and the people who are working on it are not working for a Bitcoin foundation; that was tried and didn't work. And, they're not working for a specific company that is in charge of Bitcoin. So, we have this kind of distributive model of people working on the code and that's pretty unusual, I think.
Peter McCormack: All right. When you have these kinds of voluntary, hobbyist contributors coming through, I know you said some people tend to find out they want to work on this and want to get funding; but, is there ever a case where someone like yourself, or another lead contributor, starts to notice someone's work come through, or a specific person and thinks, "Oh, who is this person?"; and, is there a process to reach out to them and talk to them and try and support them; does that happen?
John Newbery: Yeah, it happens a lot; I do it a lot. There's no formal process because there's no real formal process for anything in Bitcoin. But, I am certainly always on the lookout for potential new talent, promising talent, and I mentor several people; I have calls with them every week and help them kind of develop in their contributions to Bitcoin.
That started when I was working on the residency at Chaincode, who's always on the lookout for potential candidates for the residency, and Adam Jonas does a lot of this as well. But, it's continued since I left Chaincode that I'm always looking for people who I think have potential to contribute more.
Peter McCormack: Well, that was great because remember our last one; we sat down afterwards with three of the residents and I spoke to them and then, Amiti's now been on the podcast herself. It's great to see someone make that kind of progression in the world of Bitcoin.
The Chaincode thing's obviously very interesting and kind of unique in the way they've created their programme. Is there anyone else doing anything similar to that?
John Newbery: Not yet, but that's a very good question to lead on to the next thing that I wanted to talk about, which is the organisation that I'm setting up called Brink, and this is specifically to: one, fund established Bitcoin protocol developers; and, two, to onboard and mentor new Bitcoin protocol developers. It's going to be a completely independent organisation; I've left Chaincode. It will be completely funded by donations and sponsorship from the public and the goal there is to be an independent hub for Bitcoin protocol development.
Peter McCormack: So, how is that different from Chaincode?
John Newbery: Different in terms of the funding model. So, Chaincode is a private organisation, research foundation, and it's funded by Alex and Suhas and, I mean, those guys have done so much for Bitcoin. It funded open-source developments; it funded the residency; it funded Coin Center; they've done so much.
Brink is similar in terms of the goals that we want Bitcoin to succeed and fund open-source development, but it's different that we are soliciting funding from the public. And, I think that independence is healthy for Bitcoin, to have a diverse set of funding models for organisations funding open-source development.
The other difference is Chaincode is predominantly a centre for funding developers in New York. The residency was something that Matt Corallo started and then I continued. It's not really the focus; it's become more of a focus for them. Brink will be -- one of the two explicit focuses is to onboard new contributors, so I'll spend a lot of my time mentoring and onboarding and that's central to the mission at Brink.
Peter McCormack: But, it will all be remotely done?
John Newbery: The grants will be remote, so grants for established developers will be remote; that's the first part. The second part, the onboarding of new contributors, that will all be in person, because that's the best way to learn; that's how you learn the fastest.
Peter McCormack: In London?
John Newbery: In London, yeah; that's the plan.
Peter McCormack: Great! Well, I'll tell you what's interesting about that; it just me think of something like, bear with the analogy, something like mining. At the moment, people constantly talk about the distribution of mining. Currently, it's kind of centralised around -- well, historically, it's centralised in China and people would worry about something like that. So, I guess, what you're trying to do here is a little bit decentralise the onboarding of new developers in that, like you say, New York is a Hub; we could have a hub here in London; wouldn't it be great if we had a few of these around the world?
John Newbery: That would be great, yeah, and ideally in five or ten years' time, that will be the case that there will be lots of these Bitcoin development centres of different models, funded in different ways around the world, so there's no one single point of control. Now, I think Bitcoin development is currently more distributed than it ever has been, and I hope Brink will continue that trend and we'll see it continue further afterwards.
Peter McCormack: So, how would you coordinate with Chaincode and, say, the people at Blockstream or anywhere else? I mean, how does everyone coordinate to ensure there isn't any kind of doubling up of work, and people are trying to head in the right direction; does it work like that?
John Newbery: All of the coordination is through the Bitcoin Core project, and it's through open channels, so mostly through the GitHub repo; or IRC, Internet Relay Chat, it's a tech chat protocol; or the mailing list. All of those things are open communication mediums, so anyone can go in and audit the process of how decisions were made and how code got merged into the code base; and, if anyone disagreed, what they disagreed about. It's pretty much all out in the open.
Peter McCormack: Okay. That's some quite big changes over at Chaincode then, because obviously you've moved on and Matt moved on to Square? As I'm aware, Pieter Wuille went over to Chaincode?
John Newbery: Yeah, that's right.
Peter McCormack: Yeah, so some quite big changes over there then?
John Newbery: Yeah, Matt left, I'd say, over a year ago, to start at Square Crypto; I left last month with coming back to London; and then, Pieter and also, Mark Erhardt moved to Chaincode. So, yeah, there's been a bit of a turnover, but we're all still working on the same goals, which is to make Bitcoin succeed.
Peter McCormack: So, what's the status of Brink then; are you still early planning? When do you think you'll be starting to issue grants?
John Newbery: We've been planning for several months. The launch date is in November, so by the time your listeners are hearing this we'll have launched already.
Peter McCormack: Do you have an actual date?
John Newbery: Currently planning for next Tuesday, which is the 24th. But, yes, been working on this for several months now. I have initial funding from John Pfeffer and Wences Casares to get the project off the ground; and then, I have funding for the first grants and the first fellowship position, so that will all be in the announcement and hoping to announce our first fellow very soon.
Peter McCormack: Good old John Pfeffer.
John Newbery: Good old John Pfeffer, yeah.
Peter McCormack: Good old John; I love John. Do you know what, I haven't seen him since, I think it was LABITCONF, but I really, really like that guy! I think he does so much just in the background; he's such a great guy.
Okay, so I don't know if you've listened to any of my interviews recently? I've been kicking and giving a bit of pressure to some people towards funding, and sometimes I've been asked where to put it and, I don't know; I've got no idea.
John Newbery: Well, now you do!
Peter McCormack: Well, now I do, but that is interesting. So, if people are wanting to fund, I could put them, I guess, in your direction?
John Newbery: Yeah.
Peter McCormack: I would have thought one of the things would be, again, here's an interesting analogy; you know when you get those old magazines, they were like newspaper inserts, and they used to have things like you could adopt a tiger in Africa and they would name it, or maybe it would be a dolphin and they would give it a name and say, "You could adopt Daphne", or whatever? But, you felt like you knew where your money was going, and you'd get your letter every year and your birthday card from Daphne the dolphin, or whatever.
I think sometimes, I can imagine people wanting to fund; yes, they'd be interested and give you a lump of money. I think if they knew exactly who they were funding, I mean they probably don't need a birthday card, but do you think that kind of thing would be a possibility?
John Newbery: I'm not sure if we'd be able to offer adopting a Bitcoin Core developer, but everything that we do would be out in the open, so transparency is going to run through this organisation all the way. You'll see who's being funded and there'll be regular updates of what those people are doing with the money. The plan is this will be a 501(c)(3) entity in the US.
So, we have an entity in the US already; we have filed for 501(c)(3) status; and that is a non-profit charitable organisation. That means people will be able to give tax-exempt, so they're be able to write that off against their taxes, and that money will go towards funding Bitcoin open-source development. So, we will be the only organisation that has that status that is 100% dedicated to Bitcoin protocol development.
Currently, the Human Rights Foundation has something similar, but obviously they have a much wider mission and do a lot of things. Brink will be hopefully, all things going well, we will be a 501(c)(3) where all of the money that comes in will go towards funding Bitcoin protocol development.
Peter McCormack: Yeah, I guess also, with regard to protocol development, the HRF are quite focussed specifically on privacy; they like supporting privacy projects, obviously with the work they're doing around the world supporting human rights. Are there any specific areas of focus that Brink will have? Will it focus on the main protocol; will it consider Lightning; are there any specifics?
John Newbery: Well, the first employee is me and I work on Bitcoin Core and the base layer, so I expect that will be a focus; but, we are open to funding grants for any work on Bitcoin protocol, whether that's base layer, or layer 2, things like Lightning, and kind of related technologies to Bitcoin; anything that's advancing Bitcoin.
Peter McCormack: Okay. What's it like for you going into this, because this is a new role for you then? You are a protocol developer, but obviously you're going to have to be spending a lot more of your time on other things related and potentially, you may get to the point where you're doing a lot less development work if Brink really takes off. How do you feel about that?
John Newbery: I don't like it, I don't like the tedious admin work, I hope to outsource that to other people in the organisation and outside the organisation; but, yeah, it's taking time away from my development. The reason I'm doing it is because I think it's important. No one else is starting an organisation like this, as far as I'm aware, and I think it's the highest leverage thing I can do for Bitcoin.
Having an organisation that exists to bring on new protocol developers and fund existing protocol developers brings much more benefit to Bitcoin than I could by writing code, so that's why I'm doing this.
Peter McCormack: It sounds like a mission then?
John Newbery: It's a mission, yeah, course it is!
Peter McCormack: It's a mission. So, what are you working on yourself with Bitcoin then, right now?
John Newbery: Well, we have 0.21.0 coming out the door pretty soon. That's the next version of Bitcoin Core.
Peter McCormack: John, you say that like I know what that is; come on!
John Newbery: Okay, so Bitcoin Core is a software project and we have releases every six to eight months, and the next release will be 0.21.0, which we are in the final stages of putting together. That will be branched soon. Do you want me to explain what that means? Yeah?
Peter McCormack: Yeah, go on. I think I could make a guess, but I'd be embarrassed if I was wrong, so I'll let you explain it.
John Newbery: Okay, so in a software project, we use a code management system called "Git" where changes get added to the code and Git can have various branches, so there are different working versions of the code. The main branch we work on is called "master", and that's where all the latest development goes. Then, at periodic intervals, we will create a new branch from that, which will be exactly the same at the point it branches, and then those two branches will diverge.
That new branch is the release branch, so that new branch will be 0.21.0 in this case. We will probably do that this week and then that 0.21.0 branch will go through some release candidates. That means we will package it up and people will test it and assuming no bugs are found, that will be the final release. If bugs are found, there will be a new release candidate, but maybe there'll be two or three release candidates and then, there'll be a version of the software that people can run.
So, currently the Bitcoin Core project is mostly focussed on getting that 0.21.0 release out and then as soon as that is branched, master then becomes the code that will eventually become 0.22.0; so, there'll be new changes going into master.
Peter McCormack: What's coming in 0.21.0; anything I would be interested in?
John Newbery: Oh, loads of stuff; it's a massive release!
Peter McCormack: Is this the Taproot one?
John Newbery: So, Taproot is in there; the code for Taproot, not the activation. So, Taproot won't be something you can use on mainnet with 0.21.0, but it is something you can use in test networks. So, the code exists and has been tested and reviewed. What else is coming in 0.21.0?
Descriptor wallets and SQLite wallets; so, these are quite big changes to the way the wallet is structured and backed by a database. We completely overhauled the way that transactions are requested across the P2P network. What else did we do? Compact Blocks, so Neutrino, BIP 157/158 is now in Bitcoin Core.
Peter McCormack: Neutrino; is that like the mobile node thing?
John Newbery: Yeah. Neutrino is actually the name of the implementation from Lightning Labs, but the protocol allows a light client to download what's called a "filter" for each block. So, you can have a light client that is downloading a filter, which might be 40k instead of 1mg, and the client will be able to tell from the filter whether there are any transactions in that block that they're interested in, and then download the full block.
Peter McCormack: Okay. We should probably remind people what Taproot is.
John Newbery: Oh, okay. Well, Taproot is a future soft fork that may or may not happen, we assume it will happen. The previous soft fork was SegWit and this is SegWit version 1 scripts, and there are two parts to it. There are Schnorr signatures and there's Taproot. Schnorr signatures are a new kind of signature, well new for Bitcoin; they've been around for 30 years or so and they actually predate ECDSA, which is the current signature format we use in Bitcoin.
Schnorr signatures are better in basically every way. The way they've been implemented in Bitcoin Core means the signatures and public keys are more compact; you can do fun tricks with them, like signature aggregation, which is not really possible with ECDSA, so you can put multisig inside one signature for example; and lots of cool stuff like that.
The other part of it is Taproot, which is a way of putting multiple scripts into one output and then when you spend, you only have to use one of the scripts or you can use just a single signature. That means you can have much more complicated contracts and you do not need to reveal all of the conditions of that contract when you spend from that output.
So, it's really good for more advanced functionality; it's really good for privacy because you're not revealing very much; it's good for scalability because the footprint on the chain is a lot smaller; it's good for fungibility because everything looks the same; it's just a whole load of really cool stuff. And, it can be used in things like Lightning or other contracts and I expect once it's in, if it gets in, it will take the Lightning people and other people writing smart contracts on Bitcoin several years to get through all the potential benefits you can get from Schnorr and Taproot; it just makes everything better.
Peter McCormack: Look, I don't spend too much time in the technical sides of Bitcoin, but I notice there is a lot of excitement around Taproot. It's beyond me, but I also notice there seem to be some nerves around activating Taproot. I've seen some people on Twitter saying, "Come on, let's just go with it" and other people just a little bit nervous. I saw one thread relating to a potential issue with it, I can't even remember what it was, it was so long ago. What is the status and what is the nervousness around it?
John Newbery: I think the nervousness is post-2x trauma, that it all got very politicised around SegWit and no one wants to be in charge of Bitcoin; none of the developers want to be in charge of Bitcoin. That's not the point; nobody wants to put themselves there and so, no one wants to step up and say, "This is how Taproot will be activated". That's the main thing, I think, that technical changes are -- I haven't seen any serious opposition to them; they're just generally good and they make Bitcoin better.
So, it's not really a technical question, it's more of a social question of how do you do it; how does a decentralised system reach a decision point and make a change?
Peter McCormack: Well, how does it; what's your view?
John Newbery: Well, I'm not in charge of Bitcoin, Pete, so I can't tell you that.
Peter McCormack: Well, do you want me to do it?!
John Newbery: The problem with the way SegWit was activated, I think, for most people is that it gave the false impression that the miners chose what Bitcoin was and they chose when changes would happen, and they got to define Bitcoin. That was never the intent, but it was one interpretation of that activation method, and that is not the case. Miners are not in charge of Bitcoin; users are; economic nodes are. So, people want to avoid that, people want to avoid another kind of 2x war and giving the impression that miners get to choose what Bitcoin is.
So, I think the way it will activate, the way a lot of people are thinking about it is, it will be similar to SegWit, it will be similar to Bit9, but there will probably be a flag day upgrade after some time. So, there will be the normal miner signalling and if it hits a threshold, then it will activate after the next retarget; but, if we don't hit the signalling, then we will upgrade anyway after a year. That will be kind of a flag day so, in advance, we will say that's the date of the upgrade.
But, I don't know. That stuff is still to be hashed out. 0.21.0 puts the code in and then the decisions and the conversations about activation come after that.
Peter McCormack: Are there any risks with the activation?
John Newbery: Yes, there is. If some people activate and others don't, then depending on how that happens, you could have a chain split, which is something that we want to avoid. So, UASF is something that happened with the SegWit activation, User Activated Soft Fork, and that was a bunch of Bitcoin users saying that after this date, we're going to enforce this rule so if miners aren't enforcing it, they will be mining invalid blocks.
That carries the risk of a chain split, because the miners could continue to mine blocks which are valid according to the old rules, but not valid according to these UASF nodes. So, the UASF nodes follow one chain and the other nodes that have not activated, SegWit in that case, would follow another chain, and that's a chain split.
Peter McCormack: Okay, well we definitely want to avoid that. I mean, I don't understand it and I'm pretty sure most of this stuff, I won't even see it; it will all be baked into the lovely tools that people provide for me. But, it's very interesting to hear about it and I can imagine also, it must be quite stressful for certain developers working on this, because if you were to make a decision that would lead to a chain split or a major bug, we're back at $16,383; there's a lot of value held in Bitcoin now. I would not want that kind of responsibility. Does it feel stressful sometimes?
John Newbery: Yeah, I think so. I mean, I'm not sure if I'd use the word "stressful".
Peter McCormack: Pressure?
John Newbery: Pressure, yeah; responsibility. No one wants to put a bug into Bitcoin Core. I mean, consensus level would be the worse, because that can result in a chain split; but, even in the wallet, if you put a bug in there, you can cause people to lose money in the P2P code; if you put a bug in there, you could cause a network to fail or split in some way. So, it is quite high stakes.
Going back to your question about, is there enough funding for Bitcoin, or are there enough people working on it, if you look at the, you said $16,300; what does that mean; $250-300 billion dollar aggregate value of the network? And there are maybe 10 or 20 people working full time on Bitcoin Core.
Peter McCormack: Is that true?
John Newbery: In terms of full time, probably yeah, I'd say in the order of 20. There are a lot of people working on adjacent projects. There are people working on libsecp, there are people working on Lightning, there are people working on P2P pay server; but, if you added up all of the people who are full time on Bitcoin, or very closely-related projects, it would certainly be less than 100, probably less than 50, I would guess, which doesn't seem like that many if you think about an economy worth $300 billion. Maybe we should get more.
Peter McCormack: Well, yeah, I mean it just requires more pressure on people who are benefitting from it to be able to contribute. I mean, I spoke to Brian Armstrong and he was very open to it during the interview. I wouldn't say I railroaded him, but I did just put it out to him and he was like, "Yeah", and he stuck to his word and he went out and he did it, and they're now funding a couple of people. I know the Winkleboss brothers are looking to do the same.
So, I guess what I need to do is I need to go on probably an exchange roadshow --
John Newbery: Yeah, take the tin!
Peter McCormack: -- put that killer question in to everyone and then send them your way! But, you're making a really valid point, because everyone has an interest in doing this; everyone should be interested in doing this. I do think, though, are there scenarios where funding can dry up; like, what if something happened to Chaincode or Brink? What would happen in those kind of scenarios; would they be a disaster?
John Newbery: I think if something happened to Chaincode, it would be a problem because they fund so much good work. But, I think the important thing is we make Bitcoin development resilient to single points of failure. That's one of the reasons that I wanted to start Brink. We can't just rely on Chaincode to do all of the lifting. I am very grateful to all the work they do, but it shouldn't just be them funding everything; and they're not. There's also an IT DCI, there's also Square Crypto, Blockstream, DG; BitMEX and OP Coin are funding grants.
So, like I said a bit earlier, it is the most decentralised and distributed it's been in the history of Bitcoin, but let's keep moving in that direction so at some point, maybe your question won't even be valid. At some point if there are, say, ten organisations running Bitcoin and the question was, "What if one of those goes under?", then it's not a big deal.
Peter McCormack: Yeah, survivable. But, it feels like there's been a lot of progress in the last 12 to 18 months. I think what Square are doing in quite interesting. It does feel linear, what you're doing now. It does feel like something's happened over this last 12 to 18 months; interestingly, primarily during a bear market as well?
John Newbery: Yeah, I agree, it's getting better. I'm not going to speculate on whether it's the market or not, but hopefully if, in 12 months' time, Bitcoin is worth 10X, then a lot more people will be feeling generous with funding open-source development.
Peter McCormack: Yeah. We need to put some pressure on PayPal as well?
John Newbery: Yeah, absolutely.
Peter McCormack: Well, that's the thing though. If the price does continue to accelerate, there are going to be a lot more people who have an active interest in defending it. MicroStrategy's an interesting one, because I spoke to Michael Saylor about that. He obviously invested $450 million dollars of the money from his company and then a massive amount of his own, something like $175 million. I mean, he's pushing aggregate value across his investments of around $750 million.
He has an interest in protecting Bitcoin, and there will be lots of other people like that, I expect, like you say, over the coming years; especially if Bitcoin was to do a 10X, there are plenty of individual people who will be quite Bitcoin wealthy.
I've seen some interesting things in people creating ways to support, like almost patron style support, developers where you can put $100 here, $200 there. But, I guess that whilst that's good and that's helpful, in some ways, having significant large chunks from an organisation like you're building is probably a bit better. It's a lot less for the individual to worry about knowing, "Okay, I've got this guaranteed amount of money every year coming from Brink".
John Newbery: Yeah, it will be a 12-month grant, potentially rolling over multiple years. I agree that the patron model is good and it's admirable that people want to do that. I have questions about the sustainability; I have questions about how people on the outside choose who to patronise. It's very difficult from the outside to look at Bitcoin development and know who is making valuable contributions and who has a history of making valuable contributions; and, I fear the risk is the developers who are most active on social media will be the ones who receive the patronage and the ones who are heads down, doing work, doing useful, valuable work will not be as successful in raising funds that way.
So, that's one reason that I think Brink is a useful intermediary there; that I and the rest of the Brink team have a very good sense of who is working on the protocol, who has made valuable contributions, and who has the potential to keep doing that. We can hold them to account a lot better than an individual patron who's giving $5 a month. We can say, "This person signed up for a grant and they said they would deliver this in 12 months; and they have, and here are the results". So, I hope that's something that we can do.
Peter McCormack: Well, that's an example of where trust and centralisation of certain ideas work better. I would rather trust putting my money with someone like yourself, having known you for a while, knowing the work you do, knowing where you would put the money; because, like you say, it's not just the people active on social media. Some people just wouldn't be good at selling themselves. If I see a page of developers, how would I know who to support?
John Newbery: Yeah, and it tilts the incentive towards selling oneself rather than doing the work. If you're incentivised to sell yourself and market yourself to receive patronage, then you will spend proportionally more of your time and energy selling yourself and less time working on the code, than if you can get a grant for a year where you don't need to worry about funding; you're successful in getting a grant and then you work for 12 months on delivering the thing you said you would deliver.
I'm not saying people shouldn't use patronage. If that works for people, great, and that's a different and yet another, more diverse funding model, but I think there are advantages and disadvantages to it.
Peter McCormack: Have you set yourself any specific targets?
John Newbery: Well, I'd like to hire two fellows this year. The onboarding/mentoring scheme is called "The Fellowship" and that will be full time employees, essentially working in London out of the office here. I'd like to get two of those on board. And then, the independent grants, as many as possible, as long as I can find people who are qualified and skilled and will use those grants well. The more I can fundraise for and award, the better, as far as I'm concerned.
Peter McCormack: But what kind of fundraising targets? Obviously, it would be great if somebody comes to you and says, "Here, John, I'm going to write you a £1 million cheque", but do you take contributions of all sizes, and do you take them in pounds, dollars and Bitcoin?
John Newbery: Certainly take them in dollars and Bitcoin, and probably can take them in pounds. Dollars, I expect to be predominant, because that's how people make payments in the US, and they'll be able to write those off, tax exempt. If people want to give Bitcoin, that's fine; we'll probably sell the Bitcoin for dollars. Unlike Michael Saylor, I don't have a $500 million treasury; all of the money will be working capital, so it will have to be in dollars to pay our expenses.
But, we would take donations. I think we have an explicit goal to have a diverse set of funders. It would be better not to take more than 25% of our funding from any one individual, just in case that person goes away, then it wouldn't destroy the business; or, they don't have any undue influence over what we're doing. But, yeah, we want to take funding from diverse people and organisations and put it to good use.
Peter McCormack: Have you set up -- you must have a website by now?
John Newbery: There will be one.
Peter McCormack: There will be? And, will that be ready on Tuesday?
John Newbery: Yes. Brink.dev.
Peter McCormack: Brink.dev. And, can you donate online?
John Newbery: Yes, you can.
Peter McCormack: Right, okay.
John Newbery: Up to $5,000 worth.
Peter McCormack: Up to?
John Newbery: Anything higher than that, you'd need to contact us because of the regulations around non-profits. We'd need to get your address and do our diligence, as we're a legal entity.
Peter McCormack: Can you make lots of individual -- no, I don't mean it like that! So, say for example if I wanted to contribute a small amount of my profit, and I just wanted to do it monthly; do you suddenly hit a level where you would then have to get in touch?
John Newbery: Yes, I think so. I think it's $5,000 a year. Above that, we need to put it on our annual filings and say 501(c)(3).
Peter McCormack: So, another question, now you're back in the UK, what do you feel about the Bitcoin community, Bitcoin development; what's your feel for it here in the UK as opposed to the US because, as you know, I've travelled out there extensively, spent a lot of time in New York, San Francisco and LA, and there is a vibrant Bitcoin community; I've never really felt it here?
Now, I don't know if that's my fault for not trying to stick my head into it and see where it exists, or if it just doesn't really exist. How have you found it?
John Newbery: Well, I've moved back in the midst of a pandemic, so there's no community anywhere!
Peter McCormack: Of course, yeah!
John Newbery: There are a few organisations here that are working on Bitcoin; nothing like what exists in New York and San Francisco. But, there are people and they just need to be connected and we need to have a regular technical meet-up and that will be the seeds of the community that will grow, I think, over time. So, I certainly plan to spend some of my time working on that. As soon as things are open, we'll be doing regular technical meet-ups.
Peter McCormack: Well there is one. Isn't there one, is it Michael Folkson? I forget his name.
John Newbery: Yeah. Michael Folkson has been running meet-ups, yeah.
Peter McCormack: Yeah. Will you be attending that, or do you think there'll be another different one? Will there be one like the one I've been to in New York or San Francisco, or is that the same thing?
John Newbery: Well, I hope to start doing Socratic seminars, just like we've had in San Francisco and New York, yeah.
Peter McCormack: Yeah, I enjoyed those. I have no idea what anyone's talking about, but I do enjoy going to them. I feel like I've maybe personally neglected London, like sticking my head in there and seeing what's happening, or even trying to help and support. How can I help and support you with this? I mean, obviously we can put the show out there; what other things can I do or people listening do?
John Newbery: I think funding; funding is what we need; funding for Brink so we can pay developers and pay grants. So, I should say that the initial funding that I got from John and Wences covers me and covers our admin costs, so the funding that comes in, from now on, will go to the grants and will go to The Fellowship, so there's no cut for us. It's non-profit, so there's no equity for me, but it's good work so I'm happy about that.
In terms of how you can help, just this show and maybe fund a bit and just come along to the meet-ups when we start them in London.
Peter McCormack: What I don't understand is how much money goes how far. Is there like a general average, like if you have $50,000, that would fund a dev for a year; is there a certain range; is there any way of understanding that? I think one of the things is, when I go out talking to people about this, they want to understand amounts they can chew off; so, if I can say to someone, "Look, if you give $100,000 or $150,000, whatever the numbers is, that's probably going to fund, say, two developers". Is there any way of quantifying that?
John Newbery: Well, to be competitive, software developers, depending on where you are in the world, might be on $100,000, $150,000, $200,000.
Peter McCormack: Wow.
John Newbery: It might be lower than that, it might be higher. The market is very different around the world. I know in, like Silicon Valley, if you start at like a Google or a Facebook, you'd be starting on six figures plus, and it would go up from there. It might be lower in London, it might be lower still in other parts of the world, but I would think a fully-skilled, Bitcoin Core developer, six-figure dollars would be the starting point, and then up from there depending on experience.
Peter McCormack: Wow, okay. So, there are some quite ambitious funding targets that you've got to reach then?
John Newbery: Yeah.
Peter McCormack: So, are you out there selling, are you knocking on doors, John?
John Newbery: I have been a bit. Once we go public, I will be doing a lot more of that. But, I should say that, if you agree with me that Bitcoin is one of the most important projects in the world --
Peter McCormack: Is THE single most important project in the world, man!
John Newbery: The most important thing that humans have ever invented! Then, we want to be competitive, we want the best people in the world working on this, and passion goes quite a long way, but people should be compensated according to their skill. If they can earn twice as much going and working at Google, maybe we'll lose some of those people.
So, working on an open-source project that you are passionate about means a lot, but you should also be compensated.
Peter McCormack: Well, I'm going to bash on some doors, I'm going speak to some people and tell them to give some money to you guys to help you out with it. Actually, people have been very receptive and I don't think it's just because I put them on the spot in an interview and pressured them; I think they understand it.
I think, once you start talking to people about it, especially say both with the Winklevosses and when I spoke to Brian Armstrong at Coinbase, it wasn't just a conversation on the interview; they both did follow-ups, they both asked questions, they wanted to speak to people, they wanted to understand more about it, they were very receptive. And I think perhaps sometimes, you can get so busy building your business, you forget about the importance of something like this.
When a light is shone upon it, I think in both of those scenarios, they realised how important it is and how important it is for their business, because without the open-source developers, they don't have a business they can build upon; it becomes a lot more high risk.
John Newbery: Right. It's a platform that those companies are built on, so it is in their strategic interest that it continues to run. I think there's maybe a misunderstanding outside the Bitcoin technical community about what Bitcoin protocol developers do. I think maybe people think that Bitcoin is done, that Satoshi released version 0.1.0, and there were a few bugs that were fixed in 2011, and now we're done, and the protocol is now ossified and there's no more work for developers.
That's not the case; there's lots of work to do. There are quite frequently bugs that get fixed and we don't necessarily make a lot of noise about it. And, another thing to keep in mind, you should distinguish in your mind between changes to the protocol and work on the implementation of Bitcoin Core. So, changes to the protocol are very infrequent. SegWit was the last one; Taproot will probably be the next one, and it's not something that we change very much.
But, that doesn't mean we're not doing any work. We're doing a lot of work on the implementation on Bitcoin Core and there are parts around Bitcoin Core, like the P2P stack, other parts of it, the build system; lots and lots of moving pieces to that software project, that need continual maintenance, just like any other software project.
So, there's a lot of work, even if the Bitcoin protocol does not change frequently, there's a lot of work for software developers. And, if they're not doing that work and fixing bugs and testing releases, then the whole system could fail for some other reason. So, yeah, go fund your local Bitcoin protocol developer.
Peter McCormack: Adopt a Bitcoin developer. Will this ossification ever likely happen, because I've heard it talked about?
John Newbery: I don't know if we'll ever reach the point where the protocol never changes again, but we're trending in that direction and I expect that to continue. I don't think we'll see more frequent soft forks in the future. We might see more, but they'll be less frequent, maybe every five years or ten years, but I don't know; I know as well as you.
Peter McCormack: Do you think we'll ever see a hard fork?
John Newbery: I'm not going to say never. If there was a critical protocol bug that could only be fixed with hard fork, then we would hard fork, right, because we want Bitcoin to continue. I think it's unlikely in the near future, but I don't know.
Peter McCormack: I still imagine a scenario at some point, block size will come up again and be discussed; I can imagine that.
John Newbery: Yeah, potentially.
Peter McCormack: I can imagine if Bitcoin continues to grow and continues to be successful, adoption continues, I can imagine that that conversation comes up again. It will be highly controversial, it will be a civil war again, but I can see it coming up again.
Well, okay, before we finish up, you talked about the next release coming up that's going to have the code for Taproot. Beyond this, what are the really interesting, or really important things, that are coming up for Bitcoin that need to be worked on?
John Newbery: I think digesting Taproot and activating it. So, writing the code is the first thing. Let's go back even further; thinking of the idea is the first thing, and that happened in 2017. Then refining the idea and writing the implementation, and then reviewing the implementation and getting it merged; that's where we are now. Next up is activation and that's probably the most political, interesting part of it, if you are into social dynamics.
But then, the work is not done at that point. The work continues, which is actually making use of those new features in the protocol and that is something that will take several years, because you can make changes to Lightning that makes Lightning more efficient and better in many ways; you can have other more interesting contracts built on top of Taproot and Lightning; you can make safer multisig; all kinds of things.
And so, those products and contracts that are built on top of Schnorr and Taproot, I think that's probably the story of the next few years. It's just making such a large space of potential innovations you can create on top of that feature, it will take a long time to explore and fully exploit all of those possibilities; not to say that other interesting work is not going on, like SIGHASH, OpCTV or other potential future forks, and those could allow other interesting contracts. But, I just think there's so much to be done with Schnorr and Taproot that that will be the focus for a lot of people.
Peter McCormack: And, how are you feeling generally? I think certainly, this last six months has been very exciting. I think the one saving grace of these lockdowns and pandemics is the industry that we both work in, it's become super exciting. The interest in Bitcoin has grown and, probably in part because of the pandemic and the economic impact, but it's just been a really, really interesting six months for me. Do you echo that?
John Newbery: Yeah, I agree. On a personal level, the lockdown meant that I initially spent less time enjoying things like travelling and speaking at conferences and planning a residency and more time working on the code and that was really refreshing; but obviously, doing less of that now because of Brink. But, I agree, people have been doing really interesting things. It's a great time to be in Bitcoin.
Peter McCormack: Well, that's a great way to end it. Okay, tell people where to find out more information and what you want them to do.
John Newbery: Brink.dev. You'll find everything there.
Peter McCormack: Get your cheque books out, get your ledger out, get your multisig wallet out, your dollars out, your Bitcoin out. Support open-source development, support Brink, support John. Everything I can do to help, just let me know, but I will certainly be trying to point some people in your direction and if I ever blow this media business up into something, hopefully I can make a solid contribution at some point as well.
John Newbery: Thanks, Pete, I appreciate that.
Peter McCormack: Take care and I will see you soon.
