Bitcoin’s Governance in Context – Would Formalizing Development Help or Hurt?

Bitcoin has no DevCo. No DAO. No token treasury. No formal upgrade path. No on-chain vote. No public roadmap.

And yet it’s governed.

Not by process. Not by elections. Not even by code, strictly speaking. Bitcoin is governed by social consensus, economic gravity, and an implicit constitution written in the minds of its participants.

This has made Bitcoin incredibly durable. But also dangerously fragile. Especially when it comes to one critical issue:

Who protects the people who keep Bitcoin running?

This post is about what happens when a network depends on people—developers, reviewers, maintainers—but gives them no legal structure, funding guarantees, or institutional defense. We’ll explore why that worked so far, why it’s starting to crack, and what lessons it holds for other protocols still wrestling with DevCo and DAO tensions.

The Invisible Labor Behind a $1T Network

Bitcoin Core, the reference client that powers the majority of Bitcoin nodes, is maintained by a small group of highly specialized contributors—roughly a dozen maintainers and a few dozen regular contributors. Some are funded by companies. Some receive grants. Some work unpaid.

They write, review, test, and merge the code that underpins a trillion-dollar asset. Yet they do so without employment contracts, legal shields, or structured support. There’s no operating company. No official DAO. No guaranteed salary.

This structure is a feature—but it has consequences.

As one developer put it during a governance forum debate: “Bitcoin is decentralized in everything but stress. That still concentrates on the people with commit access.”

When the Lawsuits Came

In 2021, the now-infamous Tulip Trading lawsuit landed in UK court. Craig Wright’s company sued multiple Bitcoin Core developers, arguing they owed him a fiduciary duty to alter the Bitcoin protocol and unlock disputed coins.

The case raised an existential question: could a court force an open-source maintainer to change code based on a legal claim?

It was a chilling moment: a private litigant asked a judge to deputize Bitcoin Core contributors as fiduciaries of user funds.

The devs weren’t accused of wrongdoing. But they were vulnerable. They had no employer to indemnify them. No foundation to represent them. No war chest for legal defense.

The community responded. Jack Dorsey and others launched the Bitcoin Legal Defense Fund, a nonprofit to support developers facing litigation. Eleven devs were backed. The lawsuit dragged on through multiple appeals until finally, in 2023, it was dropped.

The immediate danger passed. But the precedent lingered: you can be sued just for being a Bitcoin developer.

What Bitcoin Gained—and Lost—By Avoiding Structure

Bitcoin’s refusal to formalize governance has earned it credibility:

• No company to subpoena

• No treasury to loot

• No roadmap to politicize

• No executive to capture

But this “neutrality by absence” has real costs:

✅ Resilience: No single point of failure

✅ Credibility: No protocol-level rent-seeking

✅ Continuity: The network survives without a CEO

But also:

⚠️ No legal protection for contributors

⚠️ No reliable funding for maintenance

⚠️ No escalation path for urgent protocol upgrades

⚠️ No systemic onboarding for new maintainers.

The result?

• Multiple devs, including Jonas Schnelli, have stepped back, citing legal stress and personal risk.

• Developer funding is scattered across private donors, nonprofits (like Brink and Spiral), and occasional grants from companies like Coinbase or OKCoin.

• Protocol improvements like Taproot or covenant proposals move slowly, bottlenecked by limited review capacity.

Bitcoin is robust—but not necessarily healthy.

Could Bitcoin Benefit from a DevCo or Foundation?

Some argue for a lightweight entity—a Bitcoin Foundation 2.0—to serve limited roles:

• Legal defense

• Grant disbursement

• Developer onboarding.

This isn’t new. The original Bitcoin Foundation, formed in 2012, was supposed to do exactly that. It collapsed in 2015 amid scandal, mismanagement, and accusations of centralization.

Since then, Bitcoin has preferred a federation of funders: Blockstream, Chaincode Labs, Spiral, Brink, HRF, MIT DCI.

This model has worked—sort of. It avoids centralization. But it creates instability:

• Devs must chase grants.

• No one knows who will pay for next year’s code review.

• Core infrastructure maintenance (like testnet coordination) gets overlooked.

A formal DevCo might fix that. But it could also introduce new risks:

• Perception of centralization

• Regulatory pressure (a visible entity is a visible target)

• Influence over roadmap via payroll

It’s a trade-off: safety and sustainability versus independence and legitimacy.

The Bigger Question: Who Carries the Risk?

This question isn’t just about Bitcoin—it applies to every blockchain:

When something breaks, who is legally, financially, or reputationally on the hook?

In most chains, the DevCo carries it—until they exit. Then the DAO inherits it—often without capacity. In Bitcoin, there’s no one left to carry it. So it falls on individuals.

• A reviewer gets sued.

• A maintainer faces death threats.

• A contributor burns out trying to push a feature alone.

And the network keeps running—governed by no one, yet kept alive by a few.

Why This Kicks Off Our Series

We start here because Bitcoin is the exception that proves the rule.

Every other chain in this series tried to formalize what Bitcoin refused to:

Governance, funding, liability protection, community control.

• Ethereum did it with culture and client diversity.

• Tezos built it into the protocol.

• EOS tried to engineer it—and collapsed.

• Zcash funded it via block rewards.

• Cardano architected it from first principles.

Each made a different bet on the same questions:

• Who writes the code?

• Who gets paid?

• Who gets sued?

• Who gets to say no?

Bitcoin said: no one. And it worked—until it didn’t

Final Thought

Bitcoin is governed by culture, consensus, and code. But it is defended by humans—underfunded, unprotected, and too often alone.

Decentralization can protect a protocol. But without structure, it can also abandon the people who make it possible.

Next up: The DevCo–DAO Dilemma — When Startups Try to Become States