Bitcoin Forum

http://www.bitcointrading.com/pdf/AndroulakiB09.pdf (http://www.bitcointrading.com/pdf/AndroulakiB09.pdf)

Ellie is a really cool girl, we met up and brainstormed some Bitcoin related topics a few months ago. She has been exploring the sorts of topics that would appeal to Bitcoiners for many years and in fact did some of the double spending research that came out about 12 months ago.

At the moment she seems to be working on more analysis of Bitcoin user privacy:

http://www.syssec.ethz.ch/people/ellia

Unsurprisingly, it will turn out that Bitcoin leaks private information like a sieve.

For more privacy, you can use a VPN service, that will hide your real IP address.

The primary issue is not with IP addresses, though that's certainly one way for information to leak.

The primary issue is with insufficient obfuscation of the block chain. Consider Joe Sixpack who receives his salary in bitcoins (for now ignore that some countries have already made that illegal). He gets one gigantic output at the start of every month and then spends it. Now anyone who happens to receive money from Joe can just trace back the transactions in a block explorer until they arrive at a salary-sized output and make the very reasonable assumption that this is how much Joe earns. Probably he would feel that this is a major privacy violation.

Bitcoin is full of these sorts of things. Fixing it is going to be a lot of work. We started already - the payment protocol is laying the foundation for resolving it and improving the privacy of the system by allowing single logical payments to be created out of multiple independent Bitcoin transactions.

what countries have made it illegal ?

I was told today that in Hungary you need approval (renewed monthly?) to pay employees in cash rather than wire transfer.

I think there was a patch for the Bitcoin client which made it more anynonymous? Can't find it now.

We also have Bitcoin mixing services, they are an another mean of identity protection (or one can learn to mix the coins themselves with proper knowledge).

sounds legit.

(booooom)

Unless Joe Sixpack has eight wallets  ;D

And to my knowledge, no country has made Bitcoins illegal, that's just FUD

I didn't say they'd made Bitcoins illegal. I said in some places it may be illegal to pay someone in cash without prior approval from the government. As Bitcoin is essentially electronic cash it'd most likely be viewed the same way.

AFAIK paying salaries in Bitcoin in France is forbidden, because there is a white list of means of payments that are allowed for salaries.

I know that it's illegal to pay rent in cash in at least one country. ::) Rent is one of the biggest sources of tax evasion. Makes sense for them to implement such laws for easily categorizable types of income, especially salaries.

ETA: I just read that Spain banned cash transactions to settle bills over 2500 EUR last year. Doubly off-topic, though still relevant I guess.

I think the general banning of cash for most transactions is going to be one of the biggest legal problems Bitcoin faces, but it's also one where popular democratic pressure can achieve results. Also, it's quite easy to avoid getting in trouble as long as you know about these laws.

Yes you did and it is a misstatement of law.


Cash is defined under most statutes as legal tender. Bitcoin is not recognized under any statutes as legal tender and is therefore not Bitcoin is not cash.

Just because it may look like a duck and quack like a duck it still might not be a duck. There are plenty of distinguishing features between cash and bitcoins; legal tender status being the largest element.

Bitcoin is much more akin to a barter transaction than a cash transaction. Like paying salaries in apples or Farmville crops or PDFs. Can the State interfere with the freedom of contract? Sure, but so far it has not been effected in a way, although the French law cho mentions could apply (I am not familiar with French law nor its application in a Civil Code manner as opposed to Common Law) to apply to Bitcoin transactions.

That logic doesn't work for white-listing though. If they tell you that you can only pay rent via bank transfer, it really doesn't matter what Bitcoin is.

Which law? I was referring to Hungarian law in my original comment, but there are similar laws in other countries. Could you call out which law I have mis-stated? You could be right, but the only way to check is to pick a specific instantiation of such laws and examine it.


In the UK Euros are not legal tender, yet the police and government will still consider them to be cash. You cannot evade laws that restrict cash transactions by simply using a different currency.

You already stated you don't actually know what the laws state in France, and I assume the same is true of Hungary. So I don't think you should be so quick to assume I'm wrong.

Your whole "bitcoin = cash/money in the eyes of the law" is just so much ill-informed FUD.

Sometimes it is better to keep your mouth shut, rather than reveal your ignorance .... just saying.

Here's what Black's law has to say on money ... just a starter for you, there is so much else besides that says you are wrong it doesn't bear getting into.

http://thelawdictionary.org/money/ (http://thelawdictionary.org/money/)


Now ask yourself, does this sound at all like Bitcoin, Namecoin, Litecoin, Devcoin, etc? NB: only the specific sense is relevant.

"money" is a term used as a laymans word for FIAT. so marcus of augustus is correct
"currency" is a term used for the category of ANY items that is used in part or in full for trade between more then 1 party, (basically widely known value point (spot)/used by more then 2 people)
EG cigarettes in prison are not money, but they are a type of currency.
"cash" is another term which many refer to being FIAT.

so the correct wording is that "it is used a virtual currency but has the properties of an asset"

in the same way that gold is not cash/money, but it used as a form of currency, but has the properties of a commodity/asset

Is there a version of this meant for people to read? I don't have a printer and the only reason to EVER use PDF is if you want something to be printed and don't care if anyone actually reads it. But the description sounds intriguing.

I asked for specific laws, not some random dictionary. Besides, why do you say "only the specific sense is relevant"? What's relevant is what prosecutors can argue in front of a judge and win, as ultimately that's what would impact your personal freedom.

Here's a law that doesn't distinguish between Bitcoin and cash, it regulates the movement of cash across EU borders:

http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/cash_controls/r1889_2005_en.pdf


In this case "monetary instruments in bearer form" means "something like money in which physical possession is proof of ownership", which pretty much exactly meets the definition of private keys. Now as it happens, I think trying to regulate the physical movement of private keys is nonsense, but if a lawyer wanted to define Bitcoins as cash for the purposes of this law they could quite easily do so.

But there's a deeper point here. Law is not a program that can be hacked if you find a neat exploit. Judges can and often do apply a "plain reading" of the law to make their decisions, ie, they consider what the writers actually intended rather than what a machine might parse the words as meaning. There is no possible way "Bitcoin is not money" can pass this common sense test, which is why it's dumb to tell people it isn't going to be legally treated as money.

Mike, I did some thinking about this subject a while ago. I'm sure your understanding is much deeper than mine, but there is one idea you might find interesting: limiting the valid transaction sizes (measured in BTC) to some small, finite, exponentially-distributed set. See http://andrewbadr.com/log/11/anonymizing-bitcoin/ for details.

Ok, the specific law that relates to what is "lawful money" in the US, i.e. what is money in the eyes of the law, is specified in the Federal Reserve Act 1913. There is a body of Supreme Court rulings and precedences surrounding the 1913 Act, that you can dig out for yourself. Interestingly, the federal reserve private bank debt notes have been brought into being under the body of contract law not civil law, so as to not fall foul of the constitution whilst still retaining FR monopoly on credit issuance, but the 1913 Act specifies that FRNs can be "redeemed for lawful money".

In fact you do not even have to go look up the Federal reserve Act 1913 (but it could be instructive for your learning), you simply need to take a greenback out of your wallet and read the fine print on it!
"This note is legal tender for all debts public and private, and is redeemable in lawful money at the United States treasury, or at any Federal Reserve bank."

Note that just by using FRNs contract law debt notes for commerce, but not redeeming for "lawful money", you are agreeing implicitly to enter into contract with the Federal Reserve and then have to play by their rules.

http://savingtosuitorsclub.net/forumdisplay.php?16-Private-Credit-vs-Lawful-Money (http://savingtosuitorsclub.net/forumdisplay.php?16-Private-Credit-vs-Lawful-Money)

It is quite specific what is "lawful money" ... trying to claim bitcoin as "money" in court could land you in prison as a counterfeiter.

Now, do you want to try to tell the judge what is and isn't "lawful money" ? ;)

Yes, I think in future we'll be splitting the concept of payment from the concept of bitcoin transaction so a single payment may actually be made using several unlinked transactions that move outputs of roughly the right amounts. The payment protocol work already takes us in that direction. It would close those kinds of privacy leaks although it'll make payments somewhat "soft" in that when somebody sends you a large payment, it might actually take a bit longer to completely arrive (as it'll be delivered in chunks).