Bitcoin Forum

Cindy Cohn, legal director at the EFF, called me a while ago to figure out what to do with the bitcoin donations they were sent, and what to do with coins that might be sent to their donation address in the future.

Ideally, they'd like to return them, but that can't be done-- bitcoin has no "return to sender" function. Returning to the last-address-the-coins-were-sent-to doesn't work because people use shared online wallets and can, and do, send their coins to new wallets and delete old wallets.

The EFF is firm in their decision NOT to cash them in (they'll be coming out with a blog post explaining their reasons very soon), and after talking over several possibilities the idea they liked best was to redistribute the coins via the Bitcoin Faucet (and have any donations that trickle in get passed back out via the Faucet).  The reasoning is that anybody who donated bitcoins to the EFF would also support the mission of the Faucet-- to promote bitcoin by giving people new to the currency a little bit to start.

Other options for what to do with the EFF donations (like setting up a non-profit entity to take the donations and... do something with them...) were rejected as too complicated and/or costly.

I'll need to do a little bit of thinking about how to handle the EFF coins safely (just dumping them all into the Faucet's wallet is not a good idea; I would hate for them to get lost if somebody managed to hack the Faucet's web-facing code). Whatever I do, I will make sure the process of moving the coins from the EFF's donation address to the Faucet is absolutely transparent.

I suspect this decision was made so as not to let their position regarding digital currency (esp. bitcoin) appear to be biased.

We shall see.

I feel like at this point the faucet will just be abused :/ sad but true

What about using the coins to seed a "bitcoin foundation" fund? I realize that a new organization was rejected as too complicated right now, but the faucet will just be a mad dash of people trying to grab all the cash they can. Can the coins just be held "in trust" until some future date?

I think opensource ecology would be a worthy recipient with no detrimental political implications.  It fits the open source for good ethos. They take bitcoins

Marcin Jakubowski: Open-sourced blueprints for civilization
http://www.ted.com/talks/marcin_jakubowski.html
http://opensourceecology.org/

How many do they have? I suggest using them as bounties for EFF-related projects. Devs and campaigners can work for BTC, while they get useful work done for "free"

Or donate it to the TOR exit nodes project

The faucet is dead as an idea now.

It was created ages ago to give people their first "feel" in the bitcoin world by handing out a few cents.

Now that it's price has risen and CPU mining became infeasible, people have enough motivation to screw over the system and try to profit by exploiting the faucet as efficiently as possible.

Hell, might just as well put a dollar faucet in the middle of Somalia & see how that turns out...
In the end it's just a few pirates and warlords with all the 'experimental' cash and the common man is left with a dry faucet.

A lottery or a donation to a real charity after converting it to cash would be better

Way interesting post.  I have been "into" Bitcoin for a few weeks now.  Was in on Gox.  Now I'm "in" TradeHill (or at least pending).  But that faucet, well damn, just heard about it this morning from the Newbie forum, and I have to say that gave me that first 'feel' of Bitcoin, and after having my information possibly stolen this weekend and having to change a lot of online things, it was nice to show up and see a place where they are just handing it out to ensure people get some.

This Faucet needs to exist to counteract the fear that it could all be gone.

Or not.  Either way I liked it and I guess even used it for the true purpose just today, thanks Gavin :)

I prefer the faucet stay up and running.  I doubt anyone will seriously scam it for 0.001.  Just make sure it is secure or don't put all of it in at once.

I just donated 0.5 and it is already down to 0.23.  That does seem odd.

gavin: the deliberation and sensitivity to ethics here is encouraging. you're one of the few in the bitcoin community that i'd trust to handle this well and transparently.

if the faucet turns out for whatever reason to be unsuitable, another option is for the eff simply to retain the bitcoins without selling them. i'm not sure if that would address the concerns they have with selling them, but for whatever it's worth, that's been my own response to early-mined coins for a collection of personal, legal, ethical, and practical reasons. i simply keep them, not sure that i'll ever sell them.

It would be a better idea to put them into a bounty for badly needed projects to help solve problems of wallet theft and wallet loss for the average user.
 
Eg. A user-friendly, secure liveCD or live USB drive configured for automatic online backup.

Not that the faucet doesn't help the promote bitcoin, but I don't think that is our biggest priority right now.  I think the faucet was vital during the embrionic stage, but it loses importance as bitcoin goes mainstream.

I have already donated 5 BTC to the faucet.  If I was given the choice to donate another time, I would never have donated an amount as large as 200 BTC to the faucet (no offense, Gavin).  Those funds were meant specifically to support EFF. If they won't have them, I would rather give them to the FSF than the faucet.

Perhaps the EFF should allow people to reclaim their donation by signing with the private keys from the originating addresses?  Complicated, but doable.

I would contact Gavin.  He runs the Faucet.   :-[  Gavin, I'd be all for the Developers getting all of them and/or send them to an address that Gavin you specify after you state you'll move them into the Faucet a few at a time.  That way no chance of the Faucet being abused, we see you're already making it harder and harder to double-dip at the Faucet.

The Faucet is the single biggest tool to get the general public into Bitcoins.  Users can get a millicoin and then send a microcoin back to the Faucet to see how the whole thing works.  

There's nothing more depressing than seeing a 0 balance in your client and wondering whether it's worth exploring.

Until we can lock down the faucet or create a more secure way of distributing them, I do not support this.

Why don't we give the community the option to make their own faucets and vote on the best ones?

The faucet will be abused, but it won't be just abused. Scammers will manage to get their hands on BTC via the faucet, but it will also continue putting BTC into the hands of new users. I think the faucet is a great first step (http://forum.bitcoin.org/index.php?topic=5435.msg79700#msg79700) into the bitcoin economy and I'm happy to hear that it will be getting some more funding.

I used the faucet to get my first coins, which were 0.02 if I recall correctly. It was a good demo. I was also the first person to notice the strange pattern on BitcoinMonitor.com that turned out to be the faucet's first major case of abuse.

It's too bad the EFF doesn't want the coins but I can see why they might want to not have any appearance of bias. So given that they don't want the coins I think giving them to the faucet isn't a bad idea, but it isn't that great an idea either because some people will abuse it. I think the best that can be done is make sure that the amount of coins the faucet gives out is enough to ensure a good demo but small enough that it would be prohibitively expensive for even bad actors to bother with another faucet raid.

Any way the faucet can just give out just a tiny multiple of the minimum that can be sent with the current client? Or perhaps just one Satoshi per customer... :)

I also believe the faucet is being abused unfortunately… (by the way someone proposed to make it return min(0.01, 10% remaining funds) in another thread)

I like the idea of the faucet only pours based on a percentage of what is left at any given time (maybe a daily check or something).   Keeps it less worthwhile for hackers, but ALWAYS something nice for the people with no coin :)

Well... as someone who has donated 25 btc to EFF, I am qualified to comment.


When I first started using bitcoins, The Faucet gave me .05. Id did get me started... so I do have some sympathy.

But not enough to donate 5000 times more than I got out of it.

What do I want? I want the EFF to accept bitcoins. Cash what you have... or, return to the donors accounts.

How?  Fill out a form if you donated and tell them how much?

And sign it with the private key associated with the address you donated from.  I think there's a patch that allows you to do this.

Allow this for a certain period of time before sending everything to the faucet.

That's a great idea, I'm surprise no one thought of that before now.

*shakes head in disbelief*

signing should be possible based on the wallet file.
Guess adding it to the client would be confusing to many but why not have a second application that uses the wallet (as long as it's not encrypted anyway ;)

EFF blog post: https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin

RE: refunding donations by proving you own one of the private keys that donated:  interesting idea!  Anybody willing to write code to do that?  Could be a fun project... (find all the transactions that donated to EFF, dig out the public keys, come up with a way to sign/verify a message with private key proving you own a public key, then keep track of which donation transactions have already been refunded)

i don't think this will work the way people intend. if i'm understanding correctly, the reason the EFF doesn't simply want to refund payments to the addresses from which the payments came is that those payment addresses could be controlled by intermediaries or otherwise can't be tied to the equitable owner of the donated funds. if that's the problem, allowing people to claim addresses by proving that they own them doesn't seem to solve much: the intermediary (e.g., mybitcoin) could still claim the addresses, perhaps through a proxy or 'beard' so that they wouldn't appear associated, and the EFF would be none the wiser.

to say that more simply, what problem would signing solve here? presumably we can assume that someone who sent money from an address owns that address (except in the rare event the private key was lost or stolen).

I donated 10 BTC back when they were about $1 each. Given the rise in value since then, if the EFF does not want them, I would prefer to get mine back.

In my case sending the coins back to any of the addresses they came from would accomplish that.

When I first found out about bitcoin I could not get the faucet to work for me. So I do not feel any need to donate to it, and certainly not $120+ worth of bitcoins.

I donated 10 BTC. It was mine. Now it's theirs; they can do with it as they wish. I would have preferred they kept it but it's their choice.

I find it a pity that they are not willing to use that money to promote electronic freedom. That was the purpose the money was donated to. They are dishonoring their donors and supporters. Shame on EFF.

I also find it dangerous to put that much amount of money in the Faucet. It will probably get stolen.

After thinking about this a little bit more, I have reconsidered ... this is a very bad idea.

During bitcoin's more innocent times, I kept my wallet.dat files unencrypted on my main laptop. I use this laptop to try out new stuff and browse the web with plugins activated, so it has a huge attack surface.

I have long since moved all my bitcoins to offline savings wallets and a spending wallet on a dedicated netbook.

But those old wallet files with zero balance in them should be considered tainted.  Even if I move them offline and format my HD it's too late.  I am making the assumption that they have been harvested by hackers already.  The problem is, my EFF donation happened such a long time ago that it came from one of those wallets.

The last thing we need right now is EFF donations being reclaimed by hackers!

People clearly intended this money to go to the EFF - so I think some legal way should be found to cash the money out and be donated back to the EFF in USD.

I don't know the exact legal situation in the US but as I recall, the laws regarding donations on behalf of others mainly concern tax deductability. So unless some of the donors were going to deduct their BTC donation to the EFF as a 501c3 organization from their income tax, it is probably possible for Gavin to cash them out and donate the USD back to them.

Maybe someone with a better understanding of the laws involved could comment on this possibility.

If you put them in the faucet, the chance of that happening is much higher, IMHO.

Yes and no... I guess many only donated because it was a bitcoin donation, not an USD one. I really feel as if EFF was dishonoring their bitcoin donors, although I understand their fear of government. So maybe the best would be to try to return the money to the donors, and those who really want to donate it to the EFF will do the conversion and donation themselves.

If you donated bitcoins to the EFF, you gave them to the EFF to do with as they wish. Asking for them back is not reasonable.

Asking for them back is reasonable, considering they don't want them.

What is not reasonable is expecting to get them back. But asking never hurts.

If they are about to take a bitcoin related case I will revoke my ill feelings on this matter. Until then, their decision just appears cowardly.

So why can't Gavin take the coins from EFF, convert them to Dwollas, and then to cash...and send the EFF a nice money order for that amount?  Perhaps with a nice note saying "Please use this to offset any legal costs associated with the defense of the bitcoin system."

Why not give them to Bruce Wagner's "bitcoin firehydrant"? At least we'd get a nice publicity event that might be pro bitcoin for a change when a million people queue up for free bitcoins in NYC. Though, come to think of it, it might be better to stage this in Kolkatta/India. ;)

I also want to add that the amount of Bitcoins one can get via the faucet is of zero use at all.

You cannot even buy a single share at GLBSE in any of the listed companies/investments there, you cannot buy anything useful and you cannot "experiment" with the money either, because of transfer fees. You anyways need more BTC and to accomplish this, you need to mine or buy some or sell something. The amount you would get with this is far higher than the money from the faucet, so all you can "learn" there is how it looks getting a transaction.

All it does is giving people an incentive to game the system to gain some more relevant amount of BTC out of it as the current amount is useless and a more useful amount won't last long.

It's like someone sending out a single penny in an obscure currency - as long as you don't have already more of these, all you can really do is store it (and be even a little pissed, that you have money lying around that is of no use - I would be!) and then, after some time when you forgot about it, throw it away.

Sorry, but this is not what people intended in my opinion when donating to the EFF.


I would like to see the following changes:
1 single Satoshi coming out of the faucet. This still lets people see how to receive a donation/transaction but will last MUCH longer if someone donates a few Bitcent to the faucet.
To make these transactions free, talk to pool operators if they would include them and use some of the EFF money as bounty for someone developing a good and safe transaction inclusion program (to let pool operators decide which transactions to include and which not, based on certain criteria). This is needed much more than having a few people creating hundreds of Google accounts to gain a few Dollars...

The rest of the money can then stay in the faucet, that would (even with severe hacking) most likely never again run dry.
As far as I understand it, it was anyways not meant to give out meaningful amounts of money (to be able to buy ANYTHING) - so it shouldn't matter if you hand out Satoshis or Millicents.

Satoshis might even stand out more and be a kind of a "reminder" of the faucet, since they are seperated from the rest of the coins, if you trade via a few zeroes.

Now that's a nice question...

If the EFF cannot use my donation in the form of BTC then I would either want my donation returned to me (if possible) or converted to fiat and donated back to the EFF.

I'm not keen on the money going into the faucet.  This is not much better than my donating fiat to the EFF only to have them convert it all to BTC and donate it to the faucet.

I see that torservers.net still has a bitcoin donation address although they have close contact with the EFF.  Is it likely that they too will have to give up accepting BTC donations?

Sounds reasonable, though IMHO the EFF have proven unworthy of these donations by their cowardly behavior.

I have been thinking. Why would they do this? All this "we didn't mean to endorse ..." BS ... it really reverses their earlier behavior where they DID ENDORSE bitcoin.

I guess they just have some bigger donors who prefer to donate in dollars and have a vested interest in bitcoin not succeeding. Really, one "liberal-minded" bank/business might be enough to put pressure on them. For all the good that the EFF has done (I used to be a big fan), maybe they have just become too big, too successful, too American, too intertwined with the establishment? What a shame.

I don't know how effective the faucet is now due to abuse, but personally it was my very first bitcoin transaction that I received. It clearly demonstrated how Bitcoin worked for me real time and help me take a step closer to using Bitcoin personally. I say Faucet would be one cause that we can all agree on as a community which is to promote for the success of Bitcoin.

Personally I'm a fan of the faucet.  I got my first 5 BTC there.  I've since donated 10 BTC back and am impressed with how it's come along.  However we're talking about the bitcoins which people have donated to the EFF, not to the faucet (or even to the success of Bitcoin).  Diverting the funds to a pro-bitcoin project on the whim of a few forum posts is irresponsible.

If the EFF specifically want to support Bitcoin and specifically by funding the faucet then fine, they may spend their coins as they see fit, but I think they could have put those funds to far better use.  As I said before, fiat donors of the EFF would probably be upset to see the EFF simply funnel all their funds into the faucet.  If my donations will be treated with more respect if I donate in fiat then I will avoid using Bitcoin for donations from here on.

Gavin was contacted by the EFF, not the other way around (see OP).
Gavin asked this forum for ideas on what he should do (he didn't say he was going to do them, he's taking a temperature)
The EFF was clear that they will NOT be converting the funds to cash, and that they see no way to return the funds legitimately, hence they reached out to Gavin to ask for ideas of what to do with them.

Based on all of the above, it would seem that they should do:
a)  Donate them to the developers to assist with costs on improving the client, protocol, and security issues (if any) around Bitcoin.
b)  Donate them to the "Community" via the Faucet.
c)  Fund pro-Bitcoin projects, in Bitcoins.  These could be bounties for bugs, funds for new projects, attorney fees (paid in BTC), etc.

We're just providing ideas, ultimately it's Gavin who will make suggestions back to the EFF.

Also, wouldn't it provide much more impact for the Bitcoin community if the EFF did C above?  Showing that this currency can get real-world issues solved and people will do real work for them.  I would think that just having the EFF convert them to cash and then spend the cash would be kind of a failure on the part of the community.  That means Bitcoins are just a commodity, not a currency, to be speculated with. 

Use them directly, buy things with them, pay for labor with them, but definitely don't just hold them.

It's a shame, though I certainly understand the reasons behind their actions. (Basically, they aren't sure of the legal implications, and don't want to be a test case, and they also don't want to be seen as endorsing bitcoins.)

However, I would rather see most of the coins go to another organisation, such as the FSF (https://my.fsf.org/donate/other/) or Freenet (https://freenetproject.org/donate.html). I donated (either 10 or 15 bitcoin, back when they weren't worth as much) specifically to help fight for Internet freedom. While I like the idea of some of they money going to the Faucet, I don't see the need for all of it going there. After all, the Faucet can run off a trickle.

Hopefully they think about their decision a bit more before they go through with it.

There is a way to do a refund.  It's a bit manual, but:

- Each person desiring a refund sends an email to the EFF with a tiny, random, specific amount specified (e.g. .00176132), along with an address to use for the refund.
- The person then sends this amount to the donation address.  
- Block explorer can find the specific donation, and show the full amount sent from the donator to the EFF.
- Refund is made.

*Disclaimer: Based on my somewhat limited understanding*

Electronic what foundation?

I see where you're coming from and I'm aware that the EFF contacted Gavin, not the other way around.  I'm guessing that by declaring that they will not be converting the funds to cash that they are also opposed to having a third party convert the funds to cash and then donate the cash to them (legal mess).

What I'm not clear on is wether the EFF aim to support Bitcoin directly or simply seek advice from Gavin.  If the former is the case I have no problem, the EFF have received funds and now they want to put them to use supporting a new cryptographic currency - fair play.  In the latter case it would be good to see some non-Bitcoin suggestions too.  For example, the EFF could donate the total to torservers.net (they seem to be more closely associated with torservers than with bitcoin so they may feel more comfortable with this).

Sorry, I started composing my post shortly after you posted.  I didn't know FSF accepted Bitcoin, thanks for this.

Yes, along with the best pro-Bitcoin suggestions I think these possibilities should be mentioned.  I'm hopeful that the EFF will find a good balance if they are given enough options.

No need for corporations; Bitcoin doesn't have to work like that.

Make a "trust fund" account on ClearCoin, with some trustees.  That trust will be held for (officially) "the good of the community"; but unofficially "for the day when EFF accepts Bitcoins".

I understand why the EFF don't want them now.  They're going to be the place we go to when the shit hits the fan.  When the government come for you, the EFF will be the ones who turn up to save you.  They can see that's what's going to happen, and so are making sure they don't have a vested interest in seeing Bitcoins declared legal.

However, that doesn't stop the community from saying: "fine, we'll keep them".  Just as there would be nothing stopping each of the original donors from keeping all returned coins to one side for exactly the same purpose.

I think it would be better if the funds in question could be given to one or more developers to do the following:

1. Make better client software, ie. secure it better with default encryption.

There are probably other things as well, we could need a distributed exchenge. Do not know how that should be done, but there are many things these money could be used for.

I think a lot of people who donated to a non-profit will object to the difference with what Bruce is doing. Holding on to the coins until the EFF comes off the fence would be best I think.

Very high level of signal to noise ratio in this thread, lots of thoughtful posts, how refreshing :)

In the future it is likely there will be significant legal contention concerning Bitcoin.  At this point the EFF is one of the first organisations which comes to mind which might choose to defend Bitcoin.  Their position would be weakened if they held a large sum of Bitcoins themselves.


Yes, how odd.  I didn't like the trolls but now that they're absent I find myself missing them.

They should just shred the wallet file. That would be equivalent to giving a little donation to every other bitcoin user in proportion to how many bitcoins they have.

But hardly actually does anything constructive, like build the economy, or encourage people to use bitcoins. I think I much prefer the idea of just giving them to Gavin and the other developers to do with as they please, rather than that.

I'd just lost all my respect for EFF.

Exactly. Also, how would defending the existence/legality of a currency they've received a large number of donations in effect their nonprofit status? I honestly don't know but I could see how accepting this could be perceived as a big conflict of interest and weaken their ability to help Bitcoin in its inevitable hour of legal need. Any sort of donating the Bitcoins to something EFF believes in/backs/is ideologically related to could be perceived as the same thing as them accepting the Bitcoins I'd assume so they really need to either return them, which seems difficult, or let them trickle back into the network in such a way that doesn't benefit them or anything that's perceived to be related to them.

So I think the EFF's totally right in doing this. However they probably should've thought of this before they decided to accept Bitcoin donations in the first place.

From their announcement (https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin):
It seems it wasn't their own idea in the first place.

Returning all of the donations is clearly impossible - some of the original private keys might be deleted or in the wrong hands by now.

While the faucet was great back then, I agree that the risk of abuse is too high, especially if it were known that a large amount went into its funding.

I personally like the idea of a trust fund for Bitcoin held by some of the developers / elders with the purpose of legal defense for Bitcoin. We could probably work out some kind of trust instrument which ensures it would only be used for purposes in the spirit of the EFF's work. It may well be that the EFF qualifies for the money some day but it shall not be held explicitly for them (due to the reasons mentioned).

Of course, Gavin would have to take the trouble to set this up but I think such a fund might come in very handy for the Bitcoin community and would probably be the closest thing to the original intentions of the donors.

I'm sure such a fund held by reputable members would receive even further donations!

Well, since they have legal concerns, it's very convenient to state something like this, so that they can say it's unrelated to the organization if shit hits the fan.

I think they just realized that the enemies they can make with Bitcoin are much more serious than the ones they make with Bittorrent, TOR, etc. Besides, people are like abused children when it comes to core issues like money, there is a lot of people who are willing to act against Bitcoin out of their good will. It's hard to assume that the average EFF supporter likes the idea of Bitcoin.

did I miss something or is it still not known how much it is? Transparency rulez!

I dug out the address I originally donated to and whacked it into blockexplorer.com
http://blockexplorer.com/address/1MCwBbhNGp5hRm5rC1Aims2YFRe2SXPYKt
This address has received about 3500 BTC in total.

I'd imagine this is everything but there could be other donation addresses out there too.

It their bitcoins. Its their decission. So it sounds like the faucet is the answer.

Keep working on the faucet to secure it as much as possible.

Just because there are scammers does not mean you should not use the faucet. Much like it does not mean that bitcoins are bad because someone can use bitcoins for bad.

Anyways thats alot of time and hard work making a new google account on a new proxy/ip just to get one-thousand'th of a bitcoin. Not a real issue IMO unless they find a way to automate it.

"Faucet", obviously.


Come on, they're lawyers with lawyerly concerns; we all know the American legal system has no basis in the reality of mortals. And they're putting the coins back into something that supports the Bitcoin ecosystem. Cake for everyone!

It sounds like they are giving the coins to Gavin, and allowing him to decide what to do with him.  I like that idea the best.  He's reaching out to us to ask us what we want to do with them.

So Gavin, I would say use the majority of the new coins - maybe 75% for bitcoin client/community development.  We need lots of work on the client, so why not let those working on it get rewarded in bitcoins?  This seems to make the most sense!

Then 25% for the faucet.  I like the faucet and it's really cool.  But it is only pennies for new people.  The idea of someone giving away free money is really nice, so we should keep it going.  It's good karma :D

Allow scripting in Bitcoin, so that they can share ownership of the coins with their previous owners for a while.
They can decide later what to do with the remaining coins.

(It would be fantastic if this kind of operation was offered in the client.
Mistakes could be reverted safely and anonymously.
Of course this requires that the coins are from a standard address.)

I made a sizeable donation to the EFF when they first announced their acceptance of bitcoin donations so I would offer a 10 bitcoin bounty on this project if someone could develop a way to refund the bitcoins easily so Gavin doesn't have to manually go through them.  This code would be handy for other initiatives or startups that get discontinued and the original investors can recoup some of their investment.


There is no good answer I can think of for people that who donated using an intermediary, unless the intermediary would be willing to refund the bitcoins back to the address that was sent to them.  At least for those that donated directly they can get the refund by returning the bitcoins to the address the donation was received from.

As someone who did donate to the EFF I am disappointed they made this decision but I understand it as well.  I would appreciate a refund of the bitcoins I sent so I could send them to other projects that could help with gathering mainstream usage of bitcoin or serve the community rather than a freebie handout to whoever has the biggest botnet.

I wouldn't know about the difficulty of creating such a system but I do very much like the idea of being able to sign messages with my wallet.  Unfortunately I'm down to my last 7.16 BTC and am avoiding all exchanges for a little while so I can only manage a pledge of 2 BTC.

If the EFF decides to allow a short period for people to reclaim their donations and the aforementioned system is instrumental in this then I will send an additional 10 BTC on being reimbursed.

I can pledge 0.5 BTC for the refund thing if I end up getting my donation back.

It should be placed in trust and used to pay bounties to get the bitcoin software improved or spread it out amongst the other bitcoin accepting charities.

This is a brilliant idea IMHO (unless the EFF explicitly wants to give it to the faucet as they have stated), because it is probably what the original donors wanted anyway. Plus, I believe such a fund might be very much needed soon.

Even if the EFF money goes somewhere else we should think about setting up such a fund.

I'm also fine with my donation going to this.

I now prefer idea of keeping the coins in escrow somewhere (ClearCoin?) as a "legal defence fund" LDF (I suggested faucet first, my bad i think).

If/when EFF work their way around "complex legal issues" they may be open to accepting btc donations again and in the interim it could be also used for other worthy legal bitcoin defences.

My main motivation for donating to the EFF stems from my philosophy on the oxymoron "intellectual property".  I also highly value TOR and support work done to allow people to communicate with one another against the wishes of highly authoritarian governments.  A legal defence of Bitcoin misses the mark for me.  However, if this fund is controlled by Gavin (or someone Gavin can personally vouch for), is specifically for the legal defense of Bitcoin (possibly also namecoin), and the fund is used in the spirit of the EFF's work as suggested, then I must admit that the idea has merit.

Having said that...

The EFF themselves are in a difficult position.  If they make a decision as to where the coins go then they could be undermining their position as future defenders of Bitcoin (even if they donate the total to a charity it would be a charity of their choosing).  If they have no say, destroy the coins, or fund the faucet, then the donors, even those that understand the motivation, will lose some faith in the EFF.  In light of this, making a token effort to return the coins to the donors before offloading the rest in ostensibly neutral way makes sense and, indeed, is arguably the right thing to do.

Note: I have donated 80 BTC to the EFF and so my argument is coloured with personal greed.

What about the bitcoin firehydrant?

http://bitcoinme.com/index.php/fire-hydrant/

Hm.. When I first started with bitcoins. I read about the faucet. I got my amount of btc, and later send it back with some extra btc as well. I think it serves an important function as it can be the first taste for anyone to 'get a taste' of bitcoin. I talked with a newbe yesterday, he just tried the faucet and was extatic, so I sent him another 0.01 too. :)

It is sad that anyone would want to exploit the faucet and try to empty it for personal gain. I am sure that many would have suggestions for how to safeguard against this, so I won't suggest anything here as I am sure these things are already tought of.

That would constitute taking funds out of the pockets of people who support the EFF directly and giving it to people who didn't care. This will not educate those who don't care, it would reward that behaviour.

The best choice is glaringly obvious to me. We the bitcoin users want bitcoin to succeed and catch on. but it has a few major issues in the way first. while i respect the doners and what they want their donated money to be used for, i think these issues are of greater importance to the community as a whole.

-The client *must* have security for the wallet itself!  not having this is ridiculous and if we expect anyone to use bitcoins it has to have virtually *no* setup and be idiot proof.

-this whole thing of *currently* waiting *24* or more hours to use the client is a joke! we need the /other/ implementation that only requires the most recent transactions/the ones that affect the user (possibly for mobile devices or a way of quickly getting the App itself working so you don't have to wait 24 hours)

-we need code made for websites that is Completely secure that allows *ultra easy* setup to allow for doing business in BTC.

-more of a personal desire, but i think having all clients able to mine for a pool would benefit the system as a whole to provide a somewhat stable amount of hashing power, possibly using something like 20% of unused CPU power/GPU power if the user enables it. (ie, say I'm using 60% of my CPU and have 40% unused. 20% of whats left is 8%) this wouldn't be to 'make money' but to 'secure the network' (the money would of course go to the user automatically).


So my proposal is this, put the money into a found for bounties, handed out/selected by Gavin(or a poll he runs?) with a readout Somewhere that shows Exactly what the funds have been used for.

I think you've confused what YOU need with what everyone else needs.

My wallet is already secure. My client is already setup. I don't have a business and I don't see how having people donate 5% of their cpu to a pool /if they want/, in any way could possibly help me any more then it would help anyone else.

And, it technically isn't even to help us, but to help those new to bitcoin and to make it easier for those that are new, many people wont be bothered with it unless its secure and "works right out of the box".

So tell me... how is this to help me?

Fair enough.

EFF directed funds redirected to development projects .... helping people into bitcoins versus helping them out of bitcoin troubles ... just can't see the rationale, sorry.

can they be used for some sort of lending pool for start up projects?
some kind of bitcoin fund?

+1

There are several high priority obstacles for bitcoin. Why not make a bounty for the first person/group that solves them?

• 1. Convincing 10 new merchants to accept BTC.
• 2. Make a secure/useable android/iPhone wallet.
• 3. etc...

I don't quite get what you mean. With a bit over 3500 BTC in that account, at a value of 16.50 USD each that is nearly 60K or 60,000 USD. That ought to be enough to do many things. What i suggested could help people into bitcoin as well as making it more secure and easier to use for all of us and improve it in ways the community would like if people submitted ideas, a poll could even be taken for the most popular ideas. Gavin or someone else could then OK the ideas as 'winners' to be funded and issue funds on completion of these "top ideas", but require them to be open source with no claims for ownership etc as well. As far as any 'bitcoin troubles' i don't quite follow you, but if their are any issues this is exactly what the fund itself would be for. Heck their is probably enough in that account to even throw some towards the bitcoin faucet since quite a few people seem to be interested in that. Though it does seem like bots might get most of it and they probably already do.

I would suggest funding new "strategical software improvements" .. umm in English .. something like "BTCPAL=paypal" or "BTCPAY=ebay". specially an BTCPAY that would really interest merchants and individuals to use the new currency.

Along with some faucet funding.

Don't make them re-write their blog entry! Keep it simple, let what they said they were doing be what they did, don't drag it out so endless comments and trollings and questions leave bitcoin mentioned over and over, pointing out they keep changing their mind, does that mean they are not consistent, and so on and so on and on and on.

Honestly when Gaven linked to their blog post it seemed to me that was the end of it, look folks, they made their decision, they wrote it into the record, it is a done deal.

So, lets look at this hacker-the-faucet problem.

How specific to the faucet are the security problems the faucet, like possibly many another website that uses bitcoins, might face?

I notice their blog post didn't really go into a whole lot of detail about precisely how the faucet operates, upon what criteria it dispenses coins, or even whether paying its own bills constitutes redistributing via the faucet.

Would it break faith with their intentions ("so that they can continue to circulate in the community") were the faucet to use some of those coins to get some serious work on bitcoin-on-the-web security done on its behalf?

-MarkM-

whatever happened with this?  Did the EFF send Gavin the coins?

I'm also curious.  What was decided in the end?  Anyone?

The plan is the same as before: EFF coins will be redistributed via the Bitcoin Faucet.

Last week the folks at the EFF said they'd be sending the coins to a secure wallet I created for that purpose "tomorrow."
I asked that they send them to address: 1vc3ZU4ae2cF6ZxqE44j5Ak3wfsZqybtb

I'll let you know what happens; they never told me where the coins are being held, it is possible they got caught in the mybitcoin disaster.

I'll keep that wallet secure and offline except to periodically top-up the Faucet's balance.

Perhaps someone needs to tell them about the claim process in case they missed it.

Update:

The EFF donation account/address was at mybitcoin, so half of them are gone.

I received 1,879 from the mybitcoin claims process.  They are now safe in an offline, encrypted wallet; here is the transaction:
 http://blockexplorer.com/tx/4b32ed2f7c1422ced7f1f0be88b2afe355c59180be72e942df085d93f1c8737a

---

According to block explorer, 3515.06 BTC were donated to the donation address I had for them:
 http://blockexplorer.com/address/1MCwBbhNGp5hRm5rC1Aims2YFRe2SXPYKt

49% of that would have been about 1,722 BTC, not 1,879. I'm guessing the difference is because of donations from other mybitcoin customers just crediting the eff account without generating a block-chain transaction.

Before sending coins to the Faucet, I think I'll create a patch to always send "change" to the same address, so it is really easy to keep track of these bitcoins and make sure they're not sent anywhere other than the Faucet.

Wow, turning your nose up at $35,000 in donations.  I'm not sure I will ever hold EFF in high esteem again.


Does it make sense to send the coins a little at a time, in case the Faucet gets scammed again?

Yes, I'll send... oh, I dunno, $200 or so worth of bitcoins at a time to the Faucet.

RE: not holding the EFF in high esteem: I still strongly support the EFF. They're good people working to make the world a better place, and I trust them to know better than I do whether or not accepting bitcoin donations is good for both them and the bitcoin project.

Give the money out to companies that are trading which accept Bitcoin as encouragement and reward for their efforts.
And some to set up new businesses.

+1 this is the only way Bitcoin survives

eff doesn't do anything.
fuck neckbeards.