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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."
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.
The news here is that they were foolish enough to accept them in the first place. I had no idea that their judgment was that bad.
Actually, the implementation was pretty sound. Nobody has cracked the Bitcoin blockchain transfer protocol. Some websites dealing with the stuff got hacked, but that happens all the time. It's the idea that sucked. Satoshi got the crypto right but fucked up the human element, economics.
Foolish to accept them? They might not be worth much of anything but if someone offers you a bitcoin what exactly is the harm in accepting it? I suppose the EFF might have taken bitcoin from a few people who might otherwise have given dollars, but in the grand scheme of things I doubt they lost out on much if anything.
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I don't think they were foolish to accept Bitcoins. Even selling them at a low rate gets them more money than they had before the donation (presuming that it covers costs). But setting a preference for something of more stable value is also within their rights.
It seems their concerns were legal: "While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since there is no caselaw on this topic, and the legal implications are still very unclear, we worry that our acceptance of Bitcoins may move us into the possible subject role."
They say a little knowledge is a dangerous thing, but it's not one half so bad as a lot of ignorance. - Terry Pratchett
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
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.
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.
Less money than what? Than nothing? Than no money you have with your assets frozen as bitcoin? Would they get less for selling it than by giving it to "the tap"?
Say, EFF tomorrow receives a donation of one trillion Mozambique dollars. Should they exchange it to USD as soon as possible or worry that selling them all now may earn them less money?
If EFF sets the policy: "sell ASAP at current price" then there is no worry. They are not a currency trade company, they are a charity. They can freely treat Bitcoin as "donation of other goods" and it's their duty to keep the assets in a safe form, not to speculate and wait for best offer for unsafe/volatile goods.
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I care about Bitcoin, I like seeing some news about it. I find it interesting.
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Here is a fun fact.... the same can happen to the Euro and US dollar. All fake currency suffers from this potential.Hell the Federal Reserve is printing money so fast that the US dollar is going to go flat almost as fast...
GO back to coins made of real copper, nickel, silver and gold. suddenly the currency regains it's value and cant be destroyed..... Unless someone perfects alchemy and turns lead into gold or synthesizes gold.
For the naysayers complaining about carrying coins... do you realize how much a 1 troy oz gold coin is worth?
What intrinsic value do precious metals have that makes them so valuable? Many of them can be made into shiny jewelry, which has some value; there's also some value for use in electronics and other products. Apart from that, the only value they have - just like any other piece of property, physical or otherwise - is their desirability to others.
I don't care for shiny jewelry, and I have no intention of manufacturing products that would use precious metals. Therefore, the only value those metals have to me is their scarcity and the fact that others find them useful. How is this different than the paper money I have in my wallet?
I have no problem with your decision that precious metals are a safer currency for you than USDs or Euros. I fail to understand, however, how government-issued money is a "fake currency". My USDs are accepted in trade for all the products and services I desire, meeting the only criterion - ability to be freely traded - necessary to fulfill its role as a "real" currency.
Any form of currency - USD, Bitcoins, precious metals, seashells, etc. - is simply a shortcut to enable trade without the hassles of bartering. I agree that governments aren't always stable, but neither are commodities markets. Perhaps the USD is about to collapse - but the gold bubble could also pop at any minute. If you want to avoid any currency with the possibility of instability, go back to bartering. Alternatively, trade in your preferred currency with the realization that it is not a panacea.
Soon we'll see guys standing on streetcorners with signs.
Homeless. Hungry. 11 kids to feed. Please help. 1BYjEs25Eo2Bz7MS4wnN81EkEjD5S2KXPV
-- -- Warning. Do not stare directly at the sun.
Bitcoin has absolutely no use other than as a fiat currency.
Bitcoins are not a fiat currency. A fiat currency, as should be obvious from its name, has its value set by fiat (decree). No one is decreeing that bitcoins have value, any more than anyone decrees that monopoly money has value. It's fashionable for libertarians to use the word 'fiat' to mean 'worthless', but the two words are not interchangeable.
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Funny, I didn't know that dinossaurs traded on gold.
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