Core maintainer Jonas Schnelli quits, highlighting BTC's total lack of decentralization

Core maintainer Jonas Schnelli quits, highlighting BTC’s total lack of decentralization

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The recent “resignation” of BTC Core code maintainer Jonas Schnelli from his role has once again shone a light on how few people have the power to alter BTC’s software. Schnelli hinted he was leaving due to the increasing stresses of “legal risks.” His departure, if sincere, would leave an even-smaller group of code maintainers on the project.

How “decentralized” is a monetary system with a market cap of US$1.16 trillion, if the number of people who can change its rules (or reject proposed changes) could fit in a van? More importantly, who are these people and to whom are they accountable?

BTC insiders may know who this elite group of code developers are, but BTC Core itself does not publicize that information. Wladimir van der Laan is the project’s Lead Developer, after taking over as lead maintainer from Gavin Andresen in 2014. Schnelli, who lives in Basel, Switzerland, had been a contributor since 2013 and “went full time” in 2015.

BSV, which maintains the original Bitcoin protocol, handles development transparently under the auspices of Bitcoin Association, a legally registered nonprofit entity based in Switzerland. If there are indeed legal risks mounting for BTC’s Core developers, this merely proves BSV’s and Dr. Craig Wright’s claims right: the only way to remove individual developer liability is with this type of association.

Schnelli’s ‘resignation’

Schnelli announced in a tweetstorm on October 22 that he would step down both as a code maintainer and BTC Core code contributor, saying “it’s time for me to move on.” As well as citing the increasing legal risks for Bitcoin developers, he noted that “sometimes, interests shift and you can’t do much about it.”

Schnelli did not elaborate on what the legal risks were. Some responders suggested they came from Dr. Craig Wright, but the real threats are likely from far more powerful sources.

Maintainer anonymity (or non-disclosure) does not protect BTC Core from government or legal pressure. The code itself lives on GitHub, a Microsoft subsidiary since 2018 and headquartered in California. Any government or agency with a particular interest in BTC would surely be aware of who the elite group of maintainers (and contributors) are, and would be capable of exerting both legal and extra-legal pressure on them individually. It’s also worth noting that developers do not operate outside of all, as seen in the case of MGM Studios, Inc. v. Grokster, Ltd., in which the U.S. Supreme Court has unanimously held the peer-to-peer filing sharing companies can be held liable for inducing copyright infringement.

According to the “Bitcoin Wiki,” “Over a dozen different companies and industry groups fund the development of Bitcoin Core.” That’s also a pretty small group, and members’ interests are surely important considerations when making key protocol decisions.

The elite group

In a 2018 German-language interview with Schweizer Monat (“Swiss Money”), Schnelli admitted that he was one of only four “maintainers” of the BTC Core code. He explained that maintainers have the rights to import changes to the codebase and implied they all knew each other.

Other BTC maintainers (added before and since 2018) are known to be van der Laan, Blockstream co-founder Peter Wuille, Marco Falke (who may or may not have left), Samuel Dobson, and Michael Ford.

Schnelli also mentioned in his 2018 interview that the 15 most active developers at BTC Core are all privately funded for their work, and that Chinese mining enterprise Bitmain had offered to “sponsor” his work at some point. However, he added that he had completely different views from his sponsors, and that Bitmain understood it had no control over his opinion and work. (Schnelli did not specify at what point in time Bitmain had made that offer, and it’s not known if the sponsorship was ongoing.)

In his farewell tweetstorm, Schnelli also acknowledged support from US BTC mining company Marathon Digital Holdings, and other unnamed “GitHub sponsors.”

Several people who responded to Schnelli’s farewell expressed doubt that he was actually standing down at all, hinting that he may simply be quitting publicly—only to return anonymously. While this included critics, some also suggested this would be a good idea. Schnelli did not respond to these claims.

If there is such a tiny group of maintainers with the ability to change the code for a digital asset with a US$1+ trillion market cap, that’s a lot of power and influence to simply walk away from no matter how much you have in your wallets. However, it’s possible Schnelli really didn’t want such responsibility, given the various economic interests at stake both inside and external to the digital asset world.

According to BTC Core’s own website, anyone may be a “contributor” and propose changes to BTC’s codebase, but only project maintainers have commit access. “The maintainers’ role is by agreement of project contributors,” it adds.

“Bitcoin Core” is the reference protocol software for BTC, and runs on the vast majority of the world’s mining machines. Although it’s theoretically possible for anyone to create alternate software of their own, it wouldn’t be much use unless it followed the rules set by the Core group.

BTC Core would take a dim view of anyone mounting a serious challenge to its position—as it did in the past, for example with Bitcoin XT, developed by Mike Hearn and Gavin Andresen. Bitcoin XT made no secret of its plans to “fork” Bitcoin to allow larger transaction blocks, years before the eventual split in 2017. Bitcoin XT and subsequent “larger block” protocols for Bitcoin met an astroturfed PR campaign intended to ostracize all “big blocker” opinions and individuals. This even went as far as the “NO2X” campaign that railed against even the most insignificant block size increase (even though a doubling from 1MB to 2MB had been used to sell BTC Core’s SegWit roadmap in the first place).

To claim BTC is still “decentralized” with this sort of structure is like saying your political party isn’t all-powerful, because it has only 98% of the seats in parliament or congress, and theoretically the people could vote you out. While the slogans scream “decentralized” and “democratic,” the situation in reality is very different.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple and
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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