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EFF Stops Accepting Bitcoin, Regifts All Donations
Gendou writes "The EFF issued a statement that it will no longer accept Bitcoin donations, has not used any of the donations, and will transfer all past donations to The Bitcoin Faucet. See also additional and forum threads."
Hm, following news of high volatility, major security problems, and the fact that one compromised account panicked an entire exchange, can anyone claim they are surprised by this?
Palm trees and 8
Damn, I was just about to gift them enough for an Epic Mount.
If you were blocking sigs, you wouldn't have to read this.
For those who won't realize before clicking the link the story is to an objectivist periodical that was co-founded by Ayn Rand. Take that as you will.
Fiat currencies are backed by faith in a government. That is to say, faith that the government will continue to provide essential services, or more pessimistically faith that the government will arrest people who do not pay their taxes. Fiat currency derives its value from its utility as a means of paying taxes and government fees, and legally settling debts.
Palm trees and 8
Please stop posting Bitcoin stories. No one cares about Bitcoin. We don't give a rat's ass about Bitcoin. We could not care less about Bitcoin. We have no interest in Bitcoin. Bitcoin does not concern us.
The Bitcoin thing has gone off in a different direction than its promoters anticipated. They were thinking "payment system", like gift cards. The idea was that most Bitcoins would be tied up in people's "wallets", and spent slowly. All that static value would anchor the currency.
That's not what happened. Bitcoins turned into a speculative vehicle, with "miners" grinding away solving hashes and generating more Bitcoins, and flaky "exchanges" offering on-line trading. The exchanges are tiny; today's worldwide Bitcoin trading volume is comparable to the sales of one supermarket. The daily volatility is huge, even on days when there isn't a break-in. So no major retailer can accept Bitcoins; they don't know what they will be worth at the end of the day, let alone the end of the month.
In a speculator-dominated system, Bitcoins are a pyramid scheme. The scheme by which it becomes harder over time to generate Bitcoins favored early adopters by a huge margin.
It's already too late to get in. The difficulty level has reached the point where buying and powering the new hardware is not cost-effective. And that was before the price of Bitcoins crashed. (The current price is around $13.)
Then there's the flaky exchange problem. Mt. Gox (formerly Magic, the Gathering Online Exchange) turns out to be two people in Tokyo. Tradehill is some company in Chile. All the other exchanges are too dinky to matter. Not one of them has the organization and resources of a typical small-town bank. Worse, they're not just "exchanges". They're depositary institutions, holding customer balances. Mt. Gox customers are now very aware of this, because they can't get at their money while Mt. Gox is down. Some people are worried over whether the money will be there when Mt. Gox comes back up.
The "exchanges" represent a mis-design of Bitcoin. There should have been a way to do an exchange in a distributed way, without the exchange holding customer assets. The NYSE and NASDAQ don't hold customer balances. Brokers do, but you can have your cash swept from a brokerage into a bank daily, or more often if the numbers get big. The Bitcoin exchanges are slow at delivering money - Mt. Gox has a daily transfer limit, and even when they were up, many users reported delays.
The EFF was right to bail.
If you had read the articles linked, you would have seen that yes, they are slowly releasing them so they aren't flooding the market.
The source code has nothing to do with Bitcoin being a scam. The fact that Bitcoin was designed to generate tremendous returns for its developers and early adopters, and siphon other currencies away from late adopters, is what makes Bitcoin a scam. You are talking about a currency that is inherently deflationary, and which will only see inflation at the very end of its life when the last adopters find themselves holding worthless tokens. The value of Bitcoin is based on speculation about how many more people will buy into the system.
Palm trees and 8
That the US can coin money doesn't mean that others can't make their own currencies. Other private currencies do exist, but generally in more limited contexts. Wii, Xbox, Kool-Aid, and Pepsi all have or have had points systems which can be used as currency by those that accept them, and nobody has cracked down on them.
This is my signature. There are many like it, but this one is mine.
When accepting bitcoin, EFF gave credibility to this money and as any fiat money credibility is what it needs. Now EFF doesn't accept anymore, they take back this credibility.
I think in both case, this was on purpose by EFF. They did the first move because they though bitcoin was an interesting experiment. They do the second move because bitcoin is now an ugly mess.
1. We don't fully understand the complex legal issues involved with creating a new currency system.
2.We don't want to mislead our donors. When people make a donation to a nonprofit like EFF, they expect us to use their donation to support our work. Because the legal territory around exchanging Bitcoins into cash is still uncertain, we are not comfortable spending the many Bitcoins we have accumulated.
3. People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin. We were concerned that some people may have participated in the Bitcoin project specifically because EFF accepted Bitcoins, and perhaps they therefore believed the investment in Bitcoins was secure and risk-free. While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin. In fact, we generally don’t endorse any type of product or service – and Bitcoin is no exception.
Your grocer is not obliged to accept the notes printed by the government
This is false in many countries. Learn about legal tender laws. Not all countries have them, but many (most?) do.
Well... actually, it's anybody's guess what it's worth right now, or what they'll be worth 24 hours after MtGox is back online. My guess is that they'll end up somewhere around $5-10. The only reason the price dropped to 1c was because someone basically stole a half-million bitcoins and dumped them all simultaneously on a market that normally would only have enough buyers (at its recent trading prices) to buy a tiny fraction of that amount.
If you showed up at a flea market (far from the nearest ATM), set up a table, and proceeded to liquidate a million $1 bills at whatever price people were willing and able to pay in order to liquidate every single one of them within 20 minutes, with a rule that people could only buy them with crisp $20 bills that were devoid of external markings, tears, folds, or other signs of use (roughly simulating the difficulty of getting funds into and out of MtGox, starting with the week it takes to get your checking account verified with Dwolla and for the funds to make the trip from your checkign account to Dwolla to Mtgox), after a while THEIR price would probably fall to a penny or two per dollar bill, too. You'd have lots of people who WANTED to buy them at 80 or 90 cents apiece, but because you were determined to sell them instantly, at any price, and only to buyers able to pay immediately with money they had on hand in a specific form, the price would crash to almost nothing.
There's nothing inherently fraudulent about Bitcoins themselves. If I sold you 10 Bitcoins on the premise that they were the cash equivalent of $200, it would be fraud, because there's no guarantee you could convert them into $200, $100, or even a penny at any specific moment in time. On the other hand, if you think a bitcoin is a fair exchange for a large pizza, and you're happy to accept one from me in exchange for it, that's a private matter entirely between two consenting adults.
That said, I've become less enthused about them over the past couple of weeks. Originally, I thought they were a cool way for anyone with a web site to accept micropayments without the cost and ceremony of dealing with credit cards, but now I'm inclined to say most people would be better off just using Dwolla and skipping the Bitcoins. In fact, Dwolla is likely to end up as the big Bitcoin winner, simply BECAUSE lots of people are going to use them to get dollars into and out of MtGox, and realize at some point along the way that Dwolla itself is a perfectly good alternative to Paypal that solves most of the complaints people have had about Paypal that motivated them to look at Bitcoins in the first place.
> At least a token lets me play Skee-ball. Are there any skee-ball machines that take bitcoins?
There's probably one somewhere in Silicon Valley, existing mainly for the amusement and satisfaction of a dotcom billionaire, but you can only play it if you have an Android phone with the proper app installed, already spent a week getting funds from your checking account to Dwolla to MtGox to buy the bitcoins, and you're willing to wait 20-40 minutes for the transaction to be published and verified before the machine releases the balls and allows you to actually play ;-)
I just figured this out: spoiler alert.
This whole BitCoin thing is fiction. An over-zealous Slashdot editor got the idea to produce original episodic content for the site, and signed up some hardware vendors and electric utilities to sponsor it. BitCoin doesn't actually exist, and anyone who claims it does is obviously part of the production team. Or one of the sponsors.
Now I can sit back and enjoy the daily BitCoin story, secure in the knowledge that it is all just entertainment, and not actually a Glenn Beck-style ploy to involve gullible Slashdot readers in an elaborate Ponzi scheme. I was starting to get worried about unnecessary power consumption and the misapplication of scientific computing clusters, but it's all just CGI, isn't it? Bravo!
Anyway, good luck guys, it's been a great series so far. Hope you win that Emmy!
Soon we'll see guys standing on streetcorners with signs.
Homeless. Hungry. 11 kids to feed. Please help. 1BYjEs25Eo2Bz7MS4wnN81EkEjD5S2KXPV
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