The deadline to submit applications for the second round of Bitcoin Foundation grants is this Friday, June 14. Grants are intended to promote the Bitcoin Foundation’s mission to ‘standardize, promote, and protect bitcoin.’
While the exact criteria for of projects that will receive a grant remains largely unknown, some guidance can be found in reviewing the first round of grants distributed earlier this year and via updates from the Foundation’s board members.
Both of the grants distributed in the first round aid in the developmental testing of the bitcoin protocol. The first grant was for a new Testnet that allows for connected nodes to run an alternate blockchain on which new versions if Bitcoin can be tested. The need for such a product became especially pronounced after Bitcoin Faucet, which used to provide small amounts of free bitcoin to users for testing, was shuttered earlier this year. The replacement Testnet Faucet, Node, and Wallet resulting from the grant can be found on this site. The second grant was given for a project that supported use of the first – a DNS seed that made it easier for Testnet nodes to connect to the network.
Notably, neither of the aforementioned projects offer particularly attractive business models. In fact, they will both most likely operate at a loss indefinitely. As stated in a later blog post from the Foundation outlining the criteria on which they made their selections, economic viability is explicitly not criteria for a grant. The Foundation’s position seems to be that viable business models should be pursued as such, with traditional business funding channels, while grants will be used for projects that may otherwise not exist. They also state that grants were considered for protocol changes, but it remains a grey area as to whether or not such a project would ever make the cut.
The foundation’s blog posts state a need for application-specific development for the protocol, with the example given of an accounting ledger for users of the bitcoin client. With that example coming from Peter Vassenes, Executive Director and Treasurer of the Bitcoin Foundation, we expect to see at least one of these in the next class of grant recipients.
Gavin Andresen, the Foundation’s Chief Scientist, stated at a panel on Wednesday that the funding for these grants is still undetermined. Once applications are in, and depending on the current exchange rate, the Foundation determine the appropriate amount to allocate. Additionally, projects should take somewhere in the range of 6-12 months to complete and have the ability to show initial progress earlier than that as they work towards completion. Anything longer than the twelve month window becomes too challenging to manage.
There were reportedly more than 20 proposals for the first quarter grants and will presumably be more this time, given bitcoin’s meteoric rise in popularity since then. Fortunately, the application process is relatively light, so there is still plenty of time to submit an idea.