ok a few history and FACTUAL lessons for you all.

LITECOIN is not resistant to any form of computational devices mining it. As long as they can be programmed to do so.
such as CPU,GPU, android phones. and many other devices.

the problem is that the devices such as the bitcoin ASICS have been hard wired to only be able to mine SHA256

litecoin was invented in 2011. asics were invented in 2012. so blame the later for not catering for the former.

the whole "GPU resistant" statement, originally stated on the wiki november 2011 is due to a users with a god complex called Luke-JR, whom has taken it upon himself to try to stop anyone's choice/freedoms of moving away from bitcoin to any other alt currencies people wish to try/use.

because he does not have the power to physically stop you. he can only control the information available on places that he moderates.

it is Luke-JR that makes the comment that litecoin wont succeed and is not worthy of peoples time.

Luke JR and other bitcoin superfans know that deep down, the lingering stench of illegal activities that media highlight about bitcoin will not grow bitcoin at the speeds they desire. he (Luke-JR) knows a sound coin with no negative publicity and nothing structurally wrong with it would succeed better going mainstream. i am not saying guaranteed to exceed in value, i am just saying user adoption would be less of a hurdle to climb.
So he wants to prevent any losses in the bitcoin userbase. He cannot shut down silk road, he cannot find a way to program it so that silk road transactions get ignored. so he is powerless to rid bitcoin of negative press. and from what i have seen. he has not been involved in any main stream expansion attempts outside of the forums.

this is what i call an armchair activist. (big mouth on the sofa, no voice on the streets)

but you have the freedom to mine litecoin if you want no matter what people say. so give it a try, and if you don't like it, you can always go back to how you done things before.

with that said feel free to try all the coins. and if you do want to help main stream a crypto currency i am not saying to not help bitcoin expand into the real world of bricks and mortar businesses. all i am saying is litecoin is a lot less of a headache swaying people away from the media propaganda.

which is at the crux of the whole issue.

edit.

read my first post, ill refresh your memory:
bitcoins are not a division of a percentage of ownership of a company (shares)

now your refreshed. shares are not person possession assets. they are, as quoted on the HMRC page "Shares, unit trusts and other investments". which have their own category for how they should be treated when it comes to capital gains tax.

i read the whole HMRC document and seeked guidance from accountants. but its obvious that selective reading has happened in your case.

in your scenario. you talk about FIAT.. legal tender, yet again is NOT a personal asset.
what your scenario suggests is what banks do for loans. the closest scenario to yours that involves bitcoin is more like what pawn brokers do, buy jewellery cheap (giving the customer FIAT), knowing people pay by installments at a bigger fee to get it back.. and all that blah blah.
but the simple answer to that is that you AS A COMPANY would be paying corporation tax. (like income tax for non companies).

again you dont seem to know what category to put bitcoin into which is why you will be in the most trouble when it comes to paying your taxes.

treat bitcoin as a retail tradable product (asset) and not a company shares scheme. FIAT loans as they are a whole different kettle of fish and you will start to see the light of day of how to treat bitcoins.
if your a company, your like a pawn broker, antiques dealer, coin collector,etc,etc
if your an individual your just buying and selling valuable assets(antiques, merchandise, products) like selling your antiques you find in your attic on ebay.

by trying to say in one hand bitcoin is a company share, another hand bitcoin is FIAT and in a third hand its something else. just means you dont know exactly what it is.

and to the other poster. so 100,000,000 satoshi's are not a well known grouping also known as a bitcoin.. ?? come on everyone knows 100,000,000 is a bitcoin. and Luke JR has proven himself limited in his understanding of things. take his obsession with editing the litecoin with lies and false statements. its far better to go seek advice from an accountant or specialist then to take luke-jr's word as gospal

the term 'set' is about there being a known , name, group, set, collection of an amount of individual items together.
if i bought a 1 seater sofa for £1k a 3 seater sofa of the same make, model brand for £5k and that formed a known furniture set. (suite of furniture) then it becomes a set. even if the value of them combined is no different to selling separate, that are classed as a set.

if i bought a brown single seater sofa. and then bought a blue 3 seater sofa from totally different brands that d not form a known set. then its not a known set.

if i bought a 1960 Gold coin a 1962 silver coin and a 1963 bronze coin. totally different. but if in the collectors world they were known as the 3 rarest coins and if owning these three coins together you became the owner of pfft.. "the mint 3" (imaginary name) then thats a set.

i know its confusing about what a set is or isnt. but thats where a dictionary comes in handy and specialists too.

now until bitcoin gives a known title to .. pfft 500BTC for instance, and calls is pfft "MegaBlock" for instance, and people started selling them as megablocks everywhere. then it gets really fun trying to decide if thats a set or not.

but because a megablock is a made up name by me, its something we dont have to worry about. the important thing to learn from this lengthy topic of people poking at each others description is that until 1 BTC is worth £6k each you got no worrys about capital gains tax. the only worry is income tax if a individual or corporation tax if a company.

now instead of arguing with me on a forum. get down to your local accountant.
here endith the lesson

wow the amazement of some people.

1.a set is when many smaller pieces are combined to create a grouping
2.a set is when many pieces kept together hold more value then splitting them up dispersing them out

ok.. now some practicals.

1. get 100,000,000 satoshi's .. would you call them a bitcoin or 100,000,000 satoshis with no formal name
2. send out your 100,000,000 satoshi in groups of 20,000 or individually 1 satoshi each you a single person. and watch the transactions fee's stack up. now is it more valuable to the recipient to receive it as a full bitcoin and keeping them as a full bitcoin to reduce/avoid transaction fee's when moving to and throw... instead of broken up losing him some satoshis selling/trading them individually.?

{facepalm}
lol read the HMRC link PPLLEEAASSEE

.. hang on ill save you the trouble

no £7k in sight

and also individual tax allowance is a separate thing again.. which is £8105

double fail but thanks for reading

the OP scenario never mentioned damages.
but as a few people including me have said .. if you go to court seeking damages all you will get back is fiat money.

so try going to court in pursuit of the return of goods/property. dont use the word damages if you dont want fiat

EDIT: to save adding more posts
indeed death and taxes is correct below, the person B may no longer have the bitcoin/jewellery. but filing for a lawsuit where its mentioned that what you request is damages only. will get you damages only before the court even begins

so as above dont mention you only seek damages. dont limit yourself before the court case. it may turn our that the person breaching the contract doesnt have the product nor able to obtain them for the return to the victim, that damages is the only solution left on the table. but just dont go into a court room metioning you want damages and then be saddened that, damages is all you get

dont treat bitcoin as legal tender or a currency, when trying to go to court due to theft or non return of loan. and dont mention that you wish to seek damages.

the term damages is a FIAT legal tender compensation nothing else.

what you seek is return of goods or damages to cover the costs of re-obtaining the lost goods

bitcoin is a personal possession asset. much like a car, jewellery, artwork, etc.

i explained why its an asset in the first part of this link below, which is to do with tax

https://bitcointalk.org/index.php?topic=143425.0
so dont treat bitcoin as money.
using the OP's scenario

person A loans person B 100 pieces of jewellery with a contract that person B obviously makes profit somehow to be able to return 105 pieces of jewellery the following year. Person B refuses to give 105 pieces of jewellery but tries to palm person A off with USD to the value of 105 pieces of jewellery.

the question then becomes. does the amount of USD offered in year 2 cover the costs of Person A obtaining 105 pieces of jewellery to make the contract whole and complete without losses.

as long as the USD covers all costs for the recipient to re-purchase the contracted retuned product without loss. there would be no need to enforce return in bitcoins only.

this would only vary if the item to be returned was rare/impossible to reasonably obtain or that the value of USD did not cover the costs. then and only then can you request the original form of the asset to be returned, or a increase of the USD compensation to cover costs of any losses.

courts have been known to request parties to revoke ownership/holding of a products/property and to give it back to the intended victim. but where the USD would also be valued at resolving the contract by then repurchasing the product/asset. this would be deemed fine also. and some courts would deem it as just time wasting.

bitcoins from 3 different accountants i seen, class bitcoins as a personal possession(asset) not a corporate product where you can claim back VAT and all the blah. not a raw material (commodity). not a division of a percentage of ownership of a company(share). its a personal possession asset.

a personal asset, much like antiques, cars, jewellery and art. the only thing with it is that with any personal possession, even your TV if you hold enough of them and keep buying from one person to sell onto another day in day out, you would be classed as a trader.

if your interested in a starting point guide to your tax liabilities or freedoms

https://bitcointalk.org/index.php?topic=143425.0

in the UK its a personal possession asset. not a corporate asset. not a commodity. not a stock/share.. it is a personal possession asset.

heres a link to my topic on UK tax stuff
https://bitcointalk.org/index.php?topic=143425.0

feel free to grab what you want from it. as it saves explaining it all out in triplicate in individual threads that all seem to be asking/confused about the same question.

EDIT: to highlight a point that may have been missed further down: you are though still liable to income tax, aswell as those in your family if you gift them the coins if an individual or corporation tax if a company

but to clarify the point on capital gains tax that has been asked many times on different threads. in the UK, bitcoins are free from capital gains tax, because they are an asset(personal possession) which is under the CGT threshold of £6000 each.

now the long answer to explain why

bitcoin is: a personal possession asset
remember an asset is a product that stores value. such as art, antiques, your car. Things that cant really be used or changed into anything else but its sole purpose. it is an end product.


what bitcoin is not:
bitcoins are not a commodity.
remember a commodity is a basic good/raw material used in commerce for the production of other goods or services.
do not get confused by the stupidly named method of making your asset being called mining, to think of them as anything like gold.
bitcoins are not a division of a percentage of ownership of a company (shares)
bitcoins are not a division of a percentage of ownership of a product a company holds (stocks)
bitcoins are not the purchase of government debt (bonds)

unless a single bitcoin (set of satoshi's) gains the value of £6000 EACH you don't have to worry about capital gains tax. you can own as many assets and sell as many assets but as long as the individual value does not exceed £6k each your safe from capital gains tax.
EG i can have a picasso, a Monet, and a Rembrandt (paintings) and sell them all to one buyer at the same time and they would not be classed as set. unless they formed a well known grouping OR gave them much more value sold together then the combined total of selling them individually.

bitcoins do not come in sets. as there is no finite amount of bitcoin units to say you have a complete 'set'. there is no general term for (EG 500BTC) groups that everyone is aware of or comfortable to use in daily conversations that gives a set group of bitcoins more value selling them as the group then the combined value of selling them individually.
so treat a bitcoin as a sole asset or a 'set' of satoshi's.

so unless 1BTC or 100,000,000sat 'set' became £6k each, you have got no worry's about capital gains tax. just worry about income tax if your an individual or corporation tax if a business.

speak with an accountant for a more deeper explanation of assets or read this
http://www.hmrc.gov.uk/cgt/possessions/basics.htm

hope this makes sense

edited parts to make it simple to understand to the lay man

please consult an accountant before taking ANYONES word as gospal

in the UK bitcoins are a personal possession, such as art, antiques, cars etc. so look into that area of tax law.

heres a link to my topic on UK tax stuff
https://bitcointalk.org/index.php?topic=143425.0

and see which bits may be useful when asking the accountants in your native countries

in the UK bitcoins are a personal possession asset, such as art, antiques, cars etc. so look into that area of tax law.

heres a link to my topic on UK tax stuff
https://bitcointalk.org/index.php?topic=143425.0

and see which bits may be useful when asking the accountants in your native countries

for a long while there was /is a visible pattern between difficulty changes of LTC and the LTC/USD prices to say that "GENERALLY" the price stands on its own two feet.

but due to the main exchange being BTC-E.com* there is a impact in the price caused by people arbitraging the BTC - USD - LTC- BTC circle as well as the other direction BTC - LTC- USD - BTC, when arbitrage events happen for a quick margin of profit.

and the occasional ramps and dumps that happen before settling back to their rational prices again.

so i would not say bitcoin movements are not ruled out of the equation, just not the permanent indicator/value comparison.

but that's where i find that the fun part though. if LTC was on a stand alone exchange with no other currency beside it, the volatility would be less.

in the future LTC will hold more on its own, but when there is money to be made, why stick with a bi-directional trading platform, when there is many directions traders can move between different currencies on BTC-E.

*and why BTC-E has gained its popularity over the other LTC exchanges is because of the multiple currencies in one exchange.

not if litecoin exchanges all do the customer due diligence, AMLKYC stuff to ensure that it stays legit and honourable for merchants to trust using it.. then the anonymous community wont want to touch it.

there's some logic.

litecoin is like bitcoin in some ways.. comparing where things were at the same age of under a year and a half, there values were very similar.. bitcoin moved into the SR economy and grew, where as litecoin is now growing some merchant tools and services to attempt at a clean mainstream direction without any of the negative bitcoin propaganda.

also selling the bitcoin concept to miners is soon going to be obsolete as people trying to make it rich with just GPU's from their home computers on bitcoin wont happen. that's where litecoin will still gather more fresh faces and interest.

it may become that litecoin gathers some recognition as the introduction coin where people begin to mine, sell it for a few items available , and then make enough profit to buy an asic to enter the big coin industry.

it may be that all the hackers and darknet users become the sole users of bitcoin and genuine businesses move to the cleaner coin.

anything can happen. and thats the great thing about these coins. freedom of change, freedom of movement, freedom of choice.

and anyone that loves bitcoin to such an extent that they will try tarnishing other coins is not really into the whole concept of freedom.

thats why im in both boats.

every rule has its exception
1. im standing at the border between 2 countries. with a gold nugget in my hand. a friend of mine is on the other side of the fence.. i throw him the gold nugget.. quarter of a second, no complaints
now im standing at the same fence, with a laptop, a friend of mine on the other side is doing the same. we are trying to find a wifi hotspot. we manage it finally, i send the bitcoin, he doesnt trust the coin is physically in his hand so he waits atleast 10 minutes for a confirmation.

2.email received (safety deposit box 279 at london bank holds the gold and cash, combination: 898934 it is now yours, bank has been informed of new owner. goodbye)

3. cash stored secretly is a fireproof box - cant confiscate it
    gold stored secretly is a fireproof box - cant confiscate it
    virus, hackers, scams take your coin - CAN confiscate it

again every rule has an exception

the problem with mainstreaming is that there are alot of armchair activists in the community. they like to say what they want to happen, but dont do much themselves to push things forward.

so my response to the OP of this thread is.

get a business bank account. and become a middleman service providor.

start a merchant service such as bitpay or a service where people can pay their utility bills through you.(person A) and then offer your received BTC to the community to refill your fiat reserves.(person B)

find a group of newzealanders that are always in demand for coin that you can form a trusting relationship with. to be your person B for guaranteed returns for large amounts of bitcoin aswell as locals which would buy small amounts of bitcoin ad-hok

it will re-boot the bitcoin eco system in new zealand,  dont complain about lack of services in new zealand. if you see a niche market, fill it.

shouting out free money, devalues it a bit. but wording it like

"ok i have put my own money into this experiment. so you can see how it works" then hand out the small denominations and at the end say "feel free to keep it trade it with others at your leisure"

its all about wording, but the idea of just giving a little bit to someone to try it out themselves works.

indeed, if you have £5k upfront (as a reserve) to become a corporate client and predict to do £250k a year then you can have the API call any amount you want and receive a response of a code for that amount to display to customers instantly, with the only delay being what you set as how many BTC confirmations you desire to see before accepting BTC payment being complete.

so work out how much above or below gox prices you can easily sell your BTC for you to get FIAT ASAP to refill your reserves with guaranteed 0 delay. add on a couple % for your own profit, and thats the fee/ mark-up price you would display to customers. (volume discounts available so you could sell at MTGOX price and make your % profit from the volume discount)

the pseudocode for how it works is:
$5k in amazon waiting (reserve/float)
(cleintscreen)customer pays you BTC to a disposable address and gets a "waiting for confirmation 1 confirmation" screen
(serverside)blockchain shows BTC payment received.
(serverside)sends an API command to amazon corporate account with amount requested
(serverside)receive code response.
(cleintscreen)show to customer "payment received heres your code"

all ud then do is sell your BTC else where to receive your FIAT to refill your corporate client account reserve.

excuse the ££ but im from the UK, its the same system across the world from what i seen. but here is the link to the UK service if you want to start up a UK business (whoever is reading this)
http://g-ecx.images-amazon.com/images/G/02/gift-certificates/corporate/AmazonCorpGCOneSheetsVerUK2012.pdf

absolutely true.. having a island in a sexy and exotic location free from government rule is a pipe dream.. and now i see the reason why detroit(not exotic or sexy) was chosen .. throw the crap back at them cheaply and easily without it changing the environment noticeably to the natives nearby.