[Foundation-l] EFF & Bitcoins

Tue Jun 21 16:52:21 UTC 2011

The claims of "Bitcoin advocates" about the legality of the currency have always been questioned.  Frankly I don't know of anybody involved with Bitcoins and understood it on a technical level that wasn't also sure that it was simply breaking new ground on both a technological as well as a legal basis.  Theoretical speculation about various kinds of attacks upon Bitcoin has been the mainstay of discussion on the forums, where even I came up with a pretty good attack that was debated for some time (and I still think is a pretty interesting potential.... see "cartel attack" on the Bitcoin forums if you care to look it up).

It is an untested concept, and the basic idea is not going to go away anytime soon, even if the particular implementation associated with this particular program may prove to be fatally flawed.

BTW, the Mt. Gox crash is really nothing new to the Bitcoin community either.  There have been other similar disasters in the past, but at that point the entire supply of Bitcoins was relatively worthless so it didn't have nearly the same impact as this particular incident.  Also, the problem here wasn't with the actual Bitcoin software, but rather with the exchange mechanism being employed to convert bitcoins to other currencies.  I suppose that is part of what gives Bitcoins value, so it matters after a fashion, but I've always been wary of websites running proprietary code and saying "trust us with your money".  This is especially true when I don't know anything at all about the operator of that website.  Yes, for me that even includes websites for banks so I am being consistent here.  The Mt. Gox website was put together by somebody who certainly had a clue about web programming, but clearly it wasn't bullet proof and could be hacked.

Anyway, I've been involved somewhat with the intersection of Bitcoins and Wikimedia, being a semi-active participant on the en.wikipedia webpage about the topic and having guided that article through the Wikipedia Incubator.  It is surprising that a topic so ignoble that it was deleted (multiple times I might add) from Wikipedia has become a topic of conversation on Foundation-l is to me all that more surprising.

For myself, I'd say wait and see in terms of having the WMF accept Bitcoins as a donation option.  Back a couple of years ago when the WMF was brand new and desperate for cash, it might have made sense to accept this method for donations, and perhaps it still could be done at least on an informal basis, but otherwise there isn't a need right now.  There certainly isn't a need for the WMF to be on the bleeding edge of society with this particular concept of currency exchange.

As for the "major issues", I could dissect those at this time but I choose not to get into advocacy as it really doesn't matter.  It is something that the WMF should keep a fairly good distance from at the moment, or at least that would be my recommendation as somebody who has been a long-time supporter of Wikimedia projects and also somebody who has studied Bitcoins to some substantial degree of depth to at least understand the concept better than you can get from reading the Wikipedia page.  Indeed I choose not to write much on the en.wikipedia page mainly because much of what I'd write would be construed as "original research".

Distributed and decentralized currencies like Bitcoins will be something that will eventually work its way into society in some form or another, and it is something that the legal system will eventually adapt to and work with in due time.  It may take a generation or two for that to happen, so I'm taking the long term view on the whole thing.  It isn't something that has to be worried about on the order of a few days, weeks, months, or even years and is still an experimental concept at best.  I'd be far more worried about the stability of currencies like the U.S. Dollar and the Euro as their basis in reality is even shakier than Bitcoins, yet the collapse of either or both currencies could substantially impact the WMF and the lives of most Wikimedians far more.

There may come a time to be involved with Bitcoins, but the time is not now or any time in the near future, at least for the WMF.

-- Robert Horning

---------- Original Message ----------
From: Thomas Morton <morton.thomas at googlemail.com>
To: Wikimedia Foundation Mailing List <foundation-l at lists.wikimedia.org>
Subject: Re: [Foundation-l] EFF & Bitcoins
Date: Tue, 21 Jun 2011 14:42:05 +0100

I'm guessing it is related to a dawning reality that while Bitcoin isn't at
the whim of some government it *is* at the whim of "lots of people on the
internet". There are major issues there; of a lack of oversight, a lack of
security in the market (i.e. the recent hacking and crashinng of the market
at MtGox) and so forth.

The MtGox crash will potentially be the turning point for BTC, I fear -
notably because it raises the point that a decentralised currency can be
attacked and scammed and you can't do anything about it without breaking the
claim of "a currency no one can control" (which is what they did). This is
what one of my favourite commentators had to say:

*The Bitcoin "community" is an emergent, distributed boiler
room<http://en.wikipedia.org/wiki/Boiler_room_(business)>.
They could just as easily be selling pink clam shells, tulips, or shares in
an insolvent company that had a business plan to make pool cleaning agents.
The underlying commodity doesn't matter. What does matter is that the widely
disbursing the underlying commodity early gave them enough of a following,
including folks who are savvy enough to think that they are the ones getting
rich off the marks (a classic element of fraud), to attempt to convince
other people that there is actually intrinsic value in what they are
selling.*

Also a lot of the claims by BTC advocates are turning out to likely be
legally unsound, which is leading a lot of commentators into the attitude of
"there could be trouble brewing here".

Just in case BTC's were every logistically on the table... this should all
be taken under consideration :)

Tom

____________________________________________________________
57 Year Old Mom Looks 27!
Mom Reveals $5 Wrinkle Trick That Has Angered Doctors!
http://thirdpartyoffers.netzero.net/TGL3241/4e00cc7c8a34412933bst05vuc