Bitcoin Forum

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Bitcoin P2P Crypto-Commodity

OK, so Bitcoin is a medium of exchange.  No one can question that.  And it seems a very effective medium of exchange.  

But is it a currency?  Is it money, backed by a store of value to be redeemable from the issuer giving the issuer no option not to accept it to be redeemed?  Or is it a secure accounting utility with a user allocated value due to market forces?

Can a Bitcoin site (bitcoin.org) decide individually whether to call Bitcoin a currency or not - because it has a decentralized nature?

Can a Bitcoin site (mtgox.com) decide individually whether to call Bitcoin an internet commodity or not - because it has a decentralized nature?

Can every Bitcoin holder, merchant, trader, etc. decide individually how they interpret Bitcoins?

Does Bitcoin allow for modern day barter transactions between the fairly secure Bitcoin Accounting Utility and a good/service?

See this legal ideas with regards to barter exchange as opposed to virtual currency (Scroll down to the end to Matthew C 's answer):

http://www.linkedin.com/answers/law-legal/corporate-law/finance-securities-law/LAW_COR_FSL/46277-12027705

Can Bitcoin be interpreted as an internet utility which can be bartered for any number of goods/services/other?

Is bitcoin.org 's blatant misrepresentation of Bitcoin not misleading?

"P2P Virtual Currency
Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network."

"... no central authority ... tracks transactions ... " - Can anyone not track transactions on the blockchain (provided Bitcoin was not laundered - and laundering Bitcoin would be illegal)?

P2P Virtual Currency - Does a currency not require a store of value backing it?

Does Bitcoin's only value derive from its secure, transferable utility value as an internet commodity described by MtGox?  Have we bought an internet commodity that we are bartering for goods/services/other as a medium of exchange?  Or have we been issued a virtual currency with a backed store of value - to be redeemed, without option not to accept, from the backing entity on demand?

Would "P2P Crypto Accounting Utility" not be a more aptly description?  Would it not be less incriminating to bitcoin.org 's author who identifies his Bitcoins as currency - even though it is not backed, or redeemable from an entity, without option not to accept?

I like to call bitcoin "a distributed time-stamp network".  It just so happens that because of human action and economic forces that it acts as a currency, functionally.

Can Bitcoin be called currency by decree, as announced on bitcoin.org which seems to be kind of authoritative about Bitcoin and also usually the first place people are introduced to Bitcoin?

Would a more neutral stand point / opinion of bitcoin.org not be more suitable?

Even though it is used as a medium of exchange in the same sense as marbles on the playground, or corporate perks, loyalty points, any liquid barter good, etc. etc.

Semantics semantics. Yawn.

It's also called e-mail even though it isn't literally mail.

Who cares? Really?

/thread

Semantics is what a court of law is all about.  Books and books of it.  If you sell / issue me a currency - certain expectations goes with it, isn't there a promise accompanying a currency, a promise to be upheld?  If I barter a goat for your pig - that is where the transfer ends - just at that.

Get your weapons ready, connect to google and wikipedia, ready your fingers on your keyboard, and prepare for INTERNET FORUM SEMANTICS BATTLE!!!

[Insert SEMANTICS argument below]

Really?  What expectation?  What promise?

Wouldn't it be illegal in most parts of the world to issue currency backed by an empty promise?

If I bought an internet commodity however at MtGox, called Bitcoin, and it is known to have fairly secure properties as an accounting utility, wouln't that be legal in most parts of the world if I would like to exchange it for goods or services or to sell it?

Really bitcoin.org - see a lawyer about the "currency" thing please.  Are you seeking cheap publicity.  As you are definitely getting it.  For now I will continue to barter my Bitcoin accounting utility which I have bought at MtGox and which I can sell at MtGox if someone wants to buy it or accept it in any barter exchange transaction at the fair market value attributed to my/your Bitcoin accounting utility.  And respectfully everybody - I declare that I am not giving you any currency through the process of our barter, buy or sell transactions - but a Bitcoin secure accounting utility.

Do show the applicable laws.

If there aren't any in the world (which I doubt), they can be made any day.  You would need to go a long way to convince people that barter has suddenly turned illegal.

You haven't posted any definition of what you think a "currency" even is.  You haven't posted any laws.  Your claims fly in the face of reality since most currencies aren't actually backed by anything.

Your proposals wrt "accounting commodity" and "utility" have glaring holes in that no one actually guarantees any of these properties and in fact no one would ever be able to.

So while I think you aren't actually one of the DOJ trolls that frequent this forum, somehow you have managed to be worse, and make even less sense, and spew even more confusion and stupidity.  Congratulations.

Actually they consider it a commodity - very wisely I would say.  Lucky for me I bought my commodity at their site.  No misconceptions of any kind of intended promise were conveyed - it was a simple sales transaction and the secure accounting utility was transfered into my ownership.  When I need to sell some secure accounting utilities at their site, I take it to the market place and the same message is portrayed.

Is it not used to be, that the value in silver/gold will be handed in exchange on presentation to the bearer?

Bitcoin P2P Crypto-Commodity ...


Thanks for your thorough effort at answering these questions.

bitcoin.org: Would Bitcoin P2P Crypto-Commodity be catchy enough for you?  (Although not as sensational?)

Tip:  Search "digital commodity"

I don't understand why you are obsessed with not calling it a currency.  You haven't showed us any of the laws you claim would make a non-backed currency illegal, and bitcoins are being used as a currency, so I don't see any reason to not call it a currency.

Goods and/or services whose value is mutually determined on a per-transaction basis?

So on what grounds will a Senator be able to shut it down?

With legislation maybe like China did a few years ago with "Virtual Currency"?  But can you do that to unique digital goods/commodity that has ownership and is transferable in a free market system?

Some might say its untraceable? - Only if you launder it - that's illegal - not if you trade/barter a digital good/commodity?

Is Bitcoin as a digital commodity's medium of exchange value not reached through barter transactions in a free market system?

Does that make it a backed currency?

But seriously, what is the point of all of your questions?  Are you trying to figure out whether bitcoins are legal?  Or are you just arguing definitions for the sake of arguing definitions?

Some virtual/currency legal tidbits:

http://www.law.illinois.edu/bljournal/post/2007/09/21/When-Pretend-Money-Has-Real-Value-A-Study-of-Virtual-Property-in-Online-Gaming.aspx

http://maxkeiser.com/2011/05/12/utah%E2%80%99s-state-tax-code-now-considers-gold-and-silver-coins-issued-by-the-u-s-mint-as-currency-rather-than-an-asset/

http://kotaku.com/351906/real-money-transaction-lawsuit-gets-interesting-+-very-interesting

Can't find anything though declaring virtual currency illegal at the moment - except China's case.

It's so perverse that numbers can be considered "illegal".

So are you just trying to determine if a Senator COULD shut down the exchanges, like they want to do?

UK considers it legal? : "... quoting Her Magesty’s Revenue & Customs as saying that turning Bitcoins into currency could make transactions taxable..."

Australia considers it legal? : "... If traced by the Australian Tax Office, Bitcoins would probably get the same treatment as “barter” exchanges, with tax assessed on the value of traded goods or services. ..."

from http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/

First a ponzi, now a drug nest, what's next? It's publicity though - if the American public wants to touch bitcoins after this tainted associated image is another question though.  Will an apology to all the honest Bitcoin merchants/traders/owners out there be in order?  Is this kind of talk not really damaging to legitimate businesses and assets?  As each bitcoin address is a unique internet commodity, bitcoin is an intellectual property right asset of its holder.  Is it now tainted and devalued by outspoken public figures who generalize bitcoin as untraceable, anonymous, etc. , etc. ?  Which is not true.  Bitcoin can be made difficult to trace, pseudonymous by illegally laundering it, like national currencies.  Doesn't that make laundering illegal, and not bitcoins and national currencies?  Will damages suffered by legal owners of this intellectual property rights be claimable, if there was generalized slander involved?

I consider the answers to these questions relevant to the value of legal bitcoin (legal in some free countries we know at least).

Doesn't statements like these "Since P2P networks are difficult to shut down, the obvious point of attack would be the bank accounts of individuals who trade Bitcoins for currencies. Such action, however, would require international cooperation since account-holders could live anywhere." make it seems as if Bitcoin is something illegal?  (see http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/ )

There is really a lot of conflicting reporting in the press about Bitcoin - the journalistic profession used to be one of a balanced view, accountable for what is reported, and non-damaging to individual's character and property.  From articles like these you do not know where statements like the above quoted came from and what its grounds are or how it has been derived after you have mentioned an authoritative figure like a Senator - but it sets a real threatening tone which can be damaging to the perceived value of an intellectual property right.

Looks.like bitcoin is on the slow path to acceptance.

Aristotle defined the characteristics of a good form of money:

1.) It must be durable. Money must stand the test of time and the elements. It must not fade, corrode, or change through time.

2.) It must be portable. Money must hold a high amount of 'worth' relative to its weight and size.

3.) It must be divisible. Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be 'fungible'. Dictionary.com describes fungible as:

"(esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind."

4.) It must have intrinsic value. This value of money should be independent of any other object and contained in the money itself.

Does bitcoin pass the test?

YES!

So it can be used as a medium of exchange in barter transactions like silvery disks (money) is used in barter transactions.  But does it make it a currency that is redeemable, is backed and will be accepted by issuer?  No.

It's an asset as Australian Tax Office will view it - used in barter transactions - a good old digital good / commodity used in barter transactions.

It is misleading to call it a currency.  It can be used like money (metal disks) as a medium of exchange.  But it is not a bill with a signature on it together with a promise.  Unless its a non-redeemable currency not backed by any promise by any issuer and just by your own definition - you can however not force the currency definition on anybody.  Some would prefer crypto-commodity.

Noone is making any promises.  Noone is "issuing" currency.  It simply exists as a form of exchange, which satisfies the bill for currency.

cur·ren·cy (http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=define%3Acurrency)/ˈkərənsē/Noun
1. A system of money in general use in a particular country.
2. The fact or quality of being generally accepted or in use.

It's backed by cryptography.  Math.  Logic.  Anyways there is nothing behind a bitcoin that needs to be" backed".  By holding a secure bitcoin wallet, you are the only person in the world who has knowledge of the private keys needed to spend that coin.  So you are in total control.  Its even better than a gold-backed paper promosary note.

It is new system of trading with new type of value that behave like currency dude. Old days doesn't have thing like world wide web, so things that behave like currency have to be backed up, because old days rules ? Is that what you thinking ? I don't understand how can you think that a new stuff that behaves and or can be used like currency has to be in/or a medium ? based on what dude ?
Do you read these kind of stuff you say by old days books that written by old rules ? and can't accept new things ? C'mon dude.
It is a new trading system that is on progress to reach maturity.

What is the USD backed by?  Faith in god... *Scoff*

well, I guess if you get down and dirty it's backed by our debt, our lavish lifestyles, our consumerism and all that jazz.  but nothing really backs our currency outside of the idea that without us the world would have nobody to buy their stuff.

one word: RARE


http://en.wikipedia.org/wiki/Rare (http://en.wikipedia.org/wiki/Rare)

http://www.thefreedictionary.com/rare (http://www.thefreedictionary.com/rare)

http://www.urbandictionary.com/define.php?term=rare (http://www.urbandictionary.com/define.php?term=rare)

A currency doesn't need to be backed by anything to be a currency.


Call it a crypto-commodity all you want, but no one else will.  Everyone else will call Bitcoins a currency, because that's what it is.

china currently makes prisoners mine for gold in world of warcraft video game

idgaf what governmets say, unless it has something to do with bringing transparency to central banking and fixing the problems outlined in confessions of an economic hitman.
i grow organic food and am a carpenter, i am currently trading my jazz for btc or your jazz. currency or barter? i'll leave that to the trolls who wana erode my liberties.

[citation needed]

http://games.slashdot.org/story/11/05/25/2215206/China-Alleged-To-Use-Prisoners-In-Lucrative-Internet-Gaming

Are Bitcoins demonized by these articles?:

http://www.baltimoresun.com/business/technology/sns-rt-us-financial-bitcoitre7573t3-20110608,0,5341564.story?track=rss

http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/

Will cryptographic key pair certificate technology intellectual property rights (in essence what Bitcoins are) be outlawed by the United States?

Will the outlaw of cryptographic key pair certificate technology intellectual property rights in the United States lead to e-commerce destruction in that country?

Can't the laws already in place against any form of laundering, including Bitcoins, be used for litigation against illegal drug smugglers who use LAUNDERED Bitcoins in the same sense that they can use LAUNDERED jewelry, cash, etc., etc.?

If you want to ban Bitcoins (or cryptographic key pair certificate technology intellectual property rights) in the United States by decree because they can be LAUNDERED, don't you need to ban property rights on any asset (including jewelry, cash, etc., etc.) because they can be LAUNDERED and used in drug dealing transactions?

Is Bitcoins the problem here, or the LAUNDERING of Bitcoins?

Does MtGox exchange enable LAUNDERING activities, if it has AML (Anti-money laundering) and KYC (Know your customer) measures in place?

Please law enforcement agencies - do a good job and go after the LAUNDERERS of any asset class including Bitcoins.

Because Bitcoins are not GENERALLY in use in any country, can that make it a currency?  Or is it just an asset class as crypto-commodity?  Is the holder of Bitcoin just the legal owner of the cryptographic key pair certificate technology intellectual property rights that this entitles the holder to?

Bitcoin network:  I'm the key holder  :)

Satoshi:  I'm the key keeper  ;)

Swimmer: "Who you gonna call?"

Dan Aykroyd:  "Ghost Busters!!!"

http://www.imdb.com/name/nm0000101/

Some more fiction:

Swimmer:  "But its anonymous!"  ???
Anders:  "No it is not!"  ::)

Swimmer:  "But its untraceable!"  ???
Anders:  "No it is not!"  :D

Swimmer:  "But its illegal!"  ???
Anders:  "No it is not!"  :)

Swimmer:  "But you can launder it!"  :o
Anders:  "Yes you can!"   :(

Swimmer:  "But if you LAUNDER it, THEN it will become maybe untraceable or even anonymous!"  >:(
Anders:  "Yes."  :(

Swimmer:  "But laundering is illegal!"  >:(
Anders:  "Yes it is."  :(

Swimmer:  "Oh I get it!, Ghostbusters go after those LAUNDERERS we can LITIGATE .... THEM!"  :)

All legal Bitcoin users:  Cheer!!  :D

Calling your Bitcoins that you buy/sell/(trade for goods) a currency is stepping into a legal minefield in my opinion, as the financial industry is regulated by numerous laws beyond the scope of this posting, for legislation administrative rulings see http://fincen.gov/

Is calling your Bitcoins that you buy/sell/(trade/barter for goods) a digital P2P crypto-commodity not maybe more accurate and legally acceptable if it is traded/exchanged/bartered or bought/sold not within the scope of financial industry?

It seems like Australia and the United Kingdom's tax offices view Bitcoins in the latter manner.  see http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/

UK considers Bitcoins legal and taxable unique intellectual property assets? : "... quoting Her Magesty’s Revenue & Customs as saying that turning Bitcoins into currency could make transactions taxable..."  (turning Bitcoins into currency = Bitcoins not a currency, but a digital good?)

Australia considers Bitcoins legal and taxable unique intellectual property assets? : "... If traced by the Australian Tax Office, Bitcoins would probably get the same treatment as “barter” exchanges, with tax assessed on the value of traded goods or services. ..." (barter of digital goods?)