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Bitcoin Electronic Frontier Foundation Your Rights Online

EFF Stops Accepting Bitcoin, Regifts All Donations 391

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."
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EFF Stops Accepting Bitcoin, Regifts All Donations

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  • by betterunixthanunix ( 980855 ) on Tuesday June 21, 2011 @10:23AM (#36513434)
    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?
    • by hedwards ( 940851 ) on Tuesday June 21, 2011 @10:30AM (#36513576)

      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.

      • Just because implementation sucked does not mean idea sucked too.

        • by Anonymous Coward on Tuesday June 21, 2011 @10:40AM (#36513806)

          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.

          • by Nursie ( 632944 )

            Agreed.

            Limited supply, deflation, absurdly huge difference in 'mining' speeds between first adopters and the comparatively early adopters on the thing now, various other weirdnesses... these all counted against it.

            As a P2P crypto currency system it's pretty cool. It just had a few things wrong.

            Oh, and the morans on the bitcoin forum. Dear god is that place 'live with 'em.

      • Why is it foolish?

        It's just another way to get money. If the cost/hassle isn't worth what it brings in then obviously you get rid of it.

        Are charities that accept bottles that they can return for the deposit, or aluminum cans then can be paid for handing over to a recycling center or clothes they can then sell to others foolish as well?

        • Those are accepted for a value that is relatively fixed, or at least doesn't fluctuate all that much. The value of Bitcoins can and do fluctuate a great deal. It's sort of like the difference between a donation of IBM stock and a donation of a random penny stock.

          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 with

          • Re:No surprises here (Score:5, Informative)

            by Abstrackt ( 609015 ) on Tuesday June 21, 2011 @10:55AM (#36514108)

            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."

        • Are charities that accept bottles that they can return for the deposit, or aluminum cans then can be paid for handing over to a recycling center or clothes they can then sell to others foolish as well?

          Yes, if the EFF accepts aluminum can donations, that would be foolish as well.
      • by nomadic ( 141991 )
        I had no idea that their judgment was that bad.

        Really? What about Eldred v. Ashcroft?
      • EFF has not problem with Bitcoin itself, but it is more concerned about the recent misuse of it, all kind of blackhats are taking advantage of it. Bitcoin is all about freedom, unfortunately this level of utter freedom (no regulation what so ever) also draws criminals that otherwise would have a hard time using PayPal or other monitored and sanctioned means of payment. EFF just wants to distance themselves from money laundering and other illegal activities associated with Bitcoin recently.
      • by DarkOx ( 621550 ) on Tuesday June 21, 2011 @10:53AM (#36514064) Journal

        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.

        • by KDR_11k ( 778916 )

          It might be stolen property.

          • What's interesting with Bitcoin is that all coins are essentially "marked," you can trace the posession of a sum through all of the endpoints it passes through, and if someone alleges that they had BTCs stolen from them, they can tell you what endpoint they went to, the transaction is in the public tree, and software that would recognize funds that came from that endpoint (or any subsequent endpoints) is possible, without having to invent any exotic new technology.

            If someone is defrauded, it should be possi

      • by horza ( 87255 )

        That doesn't make any sense. Why is it bad judgment to accept Bitcoin? Those that gave Bitcoin did so probably because they weren't going to donate cash in dollars or another currency, ergo they haven't lost anything.

        So they got something for free. And decided not to cash it in so lost nothing. Big deal. If they don't want free money then that is their prerogative.

        Phillip.

      • 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.

        Care to expand that? It isn't intuitively obvious to me why accepting a no-strings gift would automatically be foolish. No, I don't accept "free" offers from spammers or telemarketers, but that's because of the strings, not necessarily the nature of the gift.

        Sure, the gift might be worthless, but I wouldn't think it would be likely to have a large negative value.

        • Sure, the gift might be worthless, but I wouldn't think it would be likely to have a large negative value.

          I think the EFF would be properly hesitant to accept donations in "Liberty Dollars" [wikipedia.org] or counterfeit US cash.

          I suspect that Bitcoin is close to the former in legal status, and some commentators have implied the latter (probably in borderline slander, but whatever). Statute law on alternate currencies seems inconsistent, but the authorities have been energetic applying what law is available to any exchan

      • Comment removed based on user account deletion
        • Re: (Score:3, Insightful)

          by dnaumov ( 453672 )

          Then add in the fact that there are already money laundering and dope dealing going on with i

          You mean exactly like with the real, traditional, cold hard cash?

    • If you RTFA, you'll see that this has been a move they've thought through carefully and had been planning for awhile. It has nothing to do with recent events. Their biggest concern is that bitcoin is a legal grey area that might possibly make them the subject of the sort of legal action they try to defend others against.

    • by ackthpt ( 218170 )

      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?

      We have to read about something besides house fires, car crashes and political scandals, how else are we to know it's news?

  • by Rogerborg ( 306625 ) on Tuesday June 21, 2011 @10:25AM (#36513478) Homepage
    Damn, I was just about to gift them enough for an Epic Mount.
    • by Dunbal ( 464142 ) * on Tuesday June 21, 2011 @10:52AM (#36514042)
      I think anyone who has invested any substantial amount of money in bitcoin as an "investment" has already been on the receiving end of an "epic mount".
      • So far, I've gotten more USD out of Bitcoin than I've put in by about 250%. And I still own a bunch of bitcoins. I will be using them to buy actual physical goods and not USD as much as possible. I think there are enough people like me that the currency will succeed.

        It's certainly a heck of a lot more 'real' than WoW gold, which only exists on WoW servers and is completely controlled by the server you're on, which generally means Blizzard.

  • Bitcoins are quite similar to most forms of fiat money. If enough people don't endorse it, use it or accept it, it's worthless.
    • by King_TJ ( 85913 )

      Precisely ... but IMO, at least in concept, a virtual fiat currency like this could work well for items in a virtual "fiat world", no?

      • Precisely ... but IMO, at least in concept, a virtual fiat currency like this could work well for items in a virtual "fiat world", no?

        Look to EVE online for how it works for them.

    • Bitcoins are quite similar to most forms of fiat money.

      Except that Bitcoin cannot be used to pay taxes or any government fees or tariffs. Nor can Bitcoin be used to legally settle debts in some places (like the United States). In fact, Bitcoin is about as similar to fiat currency as a Chuck-e-Cheese token would be. Most fiat currencies are designed to defend against deflation, whereas Bitcoin is designed to encourage it. Most fiat currencies are useful for money lending; only a fool would lend or borrow Bitcoin.

      Bitcoin was a superficially nice idea, bu

      • by jfengel ( 409917 )

        In fact, Bitcoin is about as similar to fiat currency as a Chuck-e-Cheese token would be.

        At least a token lets me play Skee-ball. Are there any skee-ball machines that take bitcoins?

        I guess not, since nobody makes Skee-ball machines with continuous, high-speed Internet connections. I'm taking all of my money out of bitcoin and putting it into Chuck E Cheese tokens. (Well, if I had any, which I sure as hell don't.)

        • > 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

      • by horza ( 87255 )

        I have no idea whether Bitcoin will work or not, but you spend more than 5 minutes thinking about it then you see it appears as good as any other currency. You can use Bitcoin to pay taxes or government fees, just the exchange rate is dependent on the intermediary currency your government accepts. I've paid French taxes using British sterling, just the bank exchanged currency behind the scenes. Same with Bitcoin.

        The dollar seems more like Chuck-e-Cheese tokens than Bitcoin, as the government or Chuck-e-Chee

    • by Dunbal ( 464142 ) *

      Yes and it's quite interesting to observe that once again human greed provided fuel for a bubble. As the perceived value of bitcoin increased, greed also increased - until a single trigger event, the "theft" of $500,000 worth (I wonder what today's value is) of bitcoin popped the bubble. Of course it's funny to watch the bitcoin "exchanges" today saying they will do things like reverse the transactions leading up to the crash, etc. This changes nothing. Confidence has been destroyed, bitcoin is not a "safe"

  • Comment removed based on user account deletion
    • 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.

    • by jdavidb ( 449077 )
      The coins haven't made it into the faucet yet. The faucet founder, Gavin Andresen (one of the core bitcoin developers), is still trying to determine when and how he will bring the donations in. http://forum.bitcoin.org/index.php?topic=20185.0 [bitcoin.org] Meanwhile, the faucet funding has been pretty flaky, at least in the last 24 hours. Yesterday morning (US time), it was dry, yesterday evening it had some small funding, and now apparently it is dry again. I'm curious how big the EFF donation will really be.
  • by Anonymous Coward

    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.

  • by Animats ( 122034 ) on Tuesday June 21, 2011 @11:04AM (#36514276) Homepage

    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.

    • What you describe is not a pyramid scheme, it is a run on the bank. That is precisely what Bitcoin is going through.

      I am not saying it's good or bad. I am merely pointing out that this is nothing new for any type of currency. Liquidity is always a consideration and every currency; past, present, and future has had to deal with runs on the bank at various times.

      The real "tell" will be if Bitcoin survives the run.
    • by arevos ( 659374 ) on Tuesday June 21, 2011 @03:09PM (#36518736) Homepage

      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.

      Citation?

      That's not what happened. Bitcoins turned into a speculative vehicle, with "miners" grinding away solving hashes and generating more Bitcoins,

      Which in general is good. The more miners there are, the more secure the currency is against double-spending.

      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.

      There's no reason retailers have to wait until the end of the month or even the end of the day before cashing out their bitcoins. A retailer could cash out their bitcoins immediately, or after the first confirmation block. The volatility of Bitcoin is only a problem for speculators.

      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.)

      No it isn't. An average ATI graphics card will still net you $100 per month profit, even at the current difficulty.

      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.

      Why anyone would store money in Mt. Gox and not immediately take it out after a trade is beyond me. Clearly some people do, but that seems like asking for trouble.

      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.

      It's not a "mis-design". Acting as an exchange is beyond the scope of the Bitcoin protocol. If you want a distributed exchange, that's an entirely separate project.

      However, I can't see how a distributed exchange would work, unless it was just some manner of trust network and actually making the trades was up to the individuals. That doesn't seem particularly user-friendly to me, so I suspect that exchanges will have to be centralized websites.

      That said, it would be better if (a) people used alternative exchanges more, and (b) the exchange source code was open sourced.

      The EFF was right to bail.

      The EFF bailed for entirely different reasons. If the future legality of bitcoin is contested, they want to be able to fight without also being the one of the ones being prosecuted.

  • by Permutation Citizen ( 1306083 ) * on Tuesday June 21, 2011 @11:14AM (#36514502)

    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.

  • by trappa ( 1894960 ) on Tuesday June 21, 2011 @11:15AM (#36514518)

    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.

  • by psydeshow ( 154300 ) on Tuesday June 21, 2011 @12:09PM (#36515534) Homepage

    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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