BitMEX Research compiled a report on how Bitcoin (BTC) development is being funded, and apparently the majority of Bitcoin (BTC) developers are being funded by corporations. BitMEX Research concludes that this shows that the ecosystem is in a reasonably strong position when it comes to funding. An opposite conclusion can be drawn however, which is that this poses a centralization risk to Bitcoin (BTC).

Perhaps the most interesting data is about the funding for Bitcoin Core developers. Bitcoin Core is the foundation stone of the Bitcoin (BTC) network, and any changes which are made to Bitcoin Core can affect the entire Bitcoin (BTC) network and the nature of Bitcoin (BTC) itself.

The report finds that out of the top 33 Bitcoin Core developers, Chaincode funds 7 Bitcoin Core developers, Blockstream funds 3, the Massachusetts Institute of Technology (MIT) Digital Currency Initiative (DCI) funds 2, DG Labs funds 2, Square Crypto funds 2, Hardcore Fund funds 2, BitMEX funds 1, Xapo funds 1, and private donors fund 2.

Notably, 11 Bitcoin Core developers are classified as independent, although it is not defined in the report exactly what this means. Presumably, it means that those developers do not work for any company, or at least do their Bitcoin Core work in their free time.

Overall, it seems around 20 of the top 33 Bitcoin Core developers are funded by private corporations, which is a majority.

It could be speculated that the developers who receive their funds from private corporations could be forced to propose changes to Bitcoin Core that these corporations want, or possibly lose their funding. It cannot be said that this sort of thing is happening all of the time, but it is possible, since some of the developers likely depend on the income from these corporations.

Another way to look at this is comparing this situation to representatives in Congress. When a private corporation funds a top Bitcoin Core developer, they essentially get a seat in the Bitcoin Core Congress, and perhaps have some influence to have their ideas put into Bitcoin Core.

Zooming out, this situation is far different than the early days of Bitcoin (BTC). In the earliest days, when Satoshi Nakamoto was actively developing, Bitcoin Core developers likely received an income from mining. At the time that income was small to worthless, but if they held onto the Bitcoins (BTC) they would be set for life, although they did not know that.

In any case, during the earliest days of Bitcoin (BTC), perhaps from 2009 through 2011 when Bitcoin (BTC) was worth almost nothing, development was conducted by people who were not being paid by any corporations. They developed out of sheer passion and interest.

From 2012 to 2014 development was mostly funded by the Bitcoin Foundation according to the report. Although BitMEX Research thinks that was more centralized than the current situation, the Bitcoin Foundation was fairly altruistic and just wanted Bitcoin (BTC) development to continue. Therefore, it could be argued that Bitcoin Core development between 2012 to 2014 was less centralized, since there was little to no corporate influence since developers could earn a living from Bitcoin Foundation donations.

Ultimately, no one can be blamed for the current situation, and the evolution of Bitcoin (BTC) development funding could perhaps be expected according to the laws of nature. Bitcoin Core development is intensive work, and developers need to be paid to work on it year round. Also, corporations would insert their own paid developers to gain influence over the Bitcoin (BTC) development process even if there are plenty of independent developers who do not need any assistance. Due to the nature of decentralization, there is no way for independent developers to bar paid developers.

Thus, the majority of Bitcoin Core developers are funded by private corporations, and this could perhaps pose a centralization risk, in the sense that those corporations could theoretically leverage the developers they pay to get changes they want inserted into Bitcoin’s (BTC) code. That being said, this article is not claiming that this is happening with any particular developer, and also acknowledges that this situation was inevitable, since there is no way to prevent private corporations from getting involved in the Bitcoin Core development process.

The key point to keep in mind is that the Bitcoin (BTC) Community should watch the Bitcoin Core development process like a hawk, just in case any unfavorable changes are inserted into Bitcoin Core by private corporations.