blablahblah
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October 29, 2012, 10:32:40 PM |
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the issue of Bitcoin’s legal framework has been raised in the European Commission’s Payments Committee. I wonder who raised it? Visa & Mastercard most probably. The Commission is the highest authority in the EU. They make the rules, that all member states are required to implement. They tend to be lobbied very hard by mega corporations, like Visa. Presumably, Visa and Co. wouldn't want to appear to be lobbying too hard in this case. Excessive whining about Bitcoin might be like saying "here are our balls. Please squeeze!" Holy shit. Check out the conclusions on p48-ish... Epic veiled threats bonanza! Forget the lobbiests. Looks like these financial war games are about to get fun. Your move, Bernanke.
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BCB
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October 29, 2012, 10:37:44 PM |
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hazek
by the same token, were I able to wire you a trillion dollars you would receive them electronically, virtually, and they would represent value in the databases which receive them. You could then wire those zeros and ones to another bank and go to that bank and withdraw fiat. Now you probably couldn't carry 1 trillion dollars, if that amount of even physically existed but you could wire that virtual fiat to the irs to pay taxes, you could wire to your credit card company or another bank to pay a dept. The fact that the physical dollar does not exist does not make it virtual. It still has value for the recipient.
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nobbynobbynoob
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October 29, 2012, 10:43:32 PM |
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An interesting and mostly surprisingly objective paper. Almost unbelievable, this, coming from banksters.
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October 29, 2012, 10:47:04 PM |
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While "banksters" may have paid for this, it was clearly created by very intelligent, probably highly paid, academic team who use a very impressive and thorough list of references.
Kudos for them.
I wonder if the authors are aware of this thread. It would be interesting to hear from them.
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hazek
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October 29, 2012, 10:49:42 PM |
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An interesting and mostly surprisingly objective paper. Almost unbelievable, this, coming from banksters.
Well they do get some of it wrong, naturally trying to insert themselves as good samaritans who would just like to look out for us : In these schemes, the settlement asset is the virtual currency, and therefore the finality and irrevocability of payments cannot be ensured. Only central bank money can do so, because central banks present no default risk and act as lender of last resort to the member of the system in order to stop any possible chain reaction resulting from payment incidents or unforeseeable liquidity shortages.10 Virtual currencies cannot therefore be considered to be safe money, since the likelihood of the asset retaining its value for the holder, and hence its acceptability to others as a means of payment cannot be ensured. It simply relies on the creditworthiness of the issuer of the settlement asset. The level of safety is clearly below that of commercial bank money, as commercial banks are subject to prudential requirements and are supervised in order to reduce the likelihood of default, thereby improving the safety of claims on these institutions.
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My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)
If however you enjoyed my post: 15j781DjuJeVsZgYbDVt2NZsGrWKRWFHpp
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kiba
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October 29, 2012, 11:29:56 PM |
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An interesting and mostly surprisingly objective paper. Almost unbelievable, this, coming from banksters.
Perhaps, those banksters are not so evil you thought?
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nobbynobbynoob
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October 29, 2012, 11:32:20 PM |
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An interesting and mostly surprisingly objective paper. Almost unbelievable, this, coming from banksters.
Perhaps, those banksters are not so evil you thought? Some of them are, but arguably perhaps not as evil as those who granted them special monopoly privilege over the money supply to begin with. Then again, the banksters may have successfully lobbied past governments in order to extract this very privilege, and around and around we've gone since then. Bitcoin is a real spit stirrer. Sure, gold is great, but you can't ship gold around the world quasi-anonymously at the touch of a button!
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Raoul Duke
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October 29, 2012, 11:44:59 PM |
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What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
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imanikin
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October 30, 2012, 12:14:29 AM |
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What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
+1 This is one of the most important insights to get from this, and not a trivial detail! If i remember right, Mr. Bernanke denied that status even to gold in open testimony to the US Congressman Ron Paul and them... To me though, it seems impossible that the US Federal Reserve will "just let Bitcoin be", without starting the "War on Virtual Currencies" or something...
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niko
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October 30, 2012, 12:20:11 AM |
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What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
What I got from the paper is that taxation is still a grey zone. Have you checked the 2008 reference by Ping Chu? I haven't yet, but certainly will.
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They're there, in their room. Your mining rig is on fire, yet you're very calm.
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benjamindees
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October 30, 2012, 01:16:06 AM |
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In electronic money schemes the link between the electronic money and the traditional money format is preserved and has a legal foundation,[...]
is this the same as saying: electronic money has a fixed exchange rate to fiat currency while virtual currency floats? Yes. Money has future value. Currency has current value.
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Civil Liberty Through Complex Mathematics
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johnyj
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October 30, 2012, 01:57:46 AM |
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"–– could have a negative impact on the reputation of central banks, assuming the use of such systems grows considerably and in the event that an incident attracts press coverage, since the public may perceive the incident as being caused, in part, by a central bank not doing its job properly" So they do wonder if they are doing a good job ...
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Luno (OP)
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October 30, 2012, 07:49:52 AM |
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Well, this is a kind of white paper, It's filtered from any political bias. The ECB is not the Commision. Further if the EU makes some laws regarding virtual currencies, the member states will have a saying on how and when to implement them. I would imagine that if Bitcoin is put on any national political debate there will be opposition. It could used politically as "just another currency scheme after the failed Euro" which "our" county doesn't need.
This paper is only worth little as a legal document, but it could be an aid if Bitcoin businesses in the member states get hammered by local lawmakers. The stand a better chance now to take such a case up with the EU court.
The ECB is mainly under German leadership. I don't expect Italian, Greek, Spanish or French authorities to have similar positive views towards Bitcoin domestically , when their economy is under threat.
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blablahblah
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October 30, 2012, 09:05:47 AM |
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"–– could have a negative impact on the reputation of central banks, assuming the use of such systems grows considerably and in the event that an incident attracts press coverage, since the public may perceive the incident as being caused, in part, by a central bank not doing its job properly" So they do wonder if they are doing a good job ... I don't think they would publish such a paper if they didn't already see Bitcoin as having the potential to become a viable alternative to the current money system. To me it sounds like they're basically announcing: "we know about Bitcoin. If the US keeps debasing the dollar and forcing our hand (forcing the ECB to also print), we will FYU." They are already claiming Bitcoin as falling within their domain of responsibilities: virtual currency schemes: ... do indeed fall within central banks’ responsibility as a result of characteristics shared with payment systems, which give rise to the need for at least an examination of developments and the provision of an initial assessment.
And the lobbiests have been given a clear message too: Although in practical terms virtual currency schemes are only an evolution, from a conceptual point of view they do present substantial changes when compared to real currencies and payment systems. Firstly, conventional actors like financial institutions, clearing houses and central banks are absent from these schemes.
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Grinder
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October 30, 2012, 10:16:09 AM |
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What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
The paper says very little about how virtual currencies should be treated legally, it only describes how they work and relate to the real world economy.
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johnyj
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October 30, 2012, 11:17:35 AM |
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I will read it more thorough later today. The greatest thing about this paper is that it shows how ECB is thinking as a central bank when it faces such a new challenge
For example, they mentioned this: "In the classical equation of exchange, the velocity of money (V) is represented in the following terms: V = P x Y / M, where P x Y is the nominal GDP and M is the money supply."
MV=PY is the most simple and sound formula that is taught everywhere in the world's economy school, so central bank's operation actually is consistent with modern economy theories
Currently the EMU is facing big uncertainty, some of the member country might leave it, who knows what's going to happen in such a mess, if bitcoin were picked up by one of the country as backup currency (remember pirate party? they definitely favour BTC), then it will change the landscape
And, virtual economy will sooner or later grow larger than physical economy (For example, I don't want to move to a new house every year due to all the labour involved, but in a good game I'm willing to move to a new top fashioned house every day, this can be only achieved by virtual economy, people's spending on virtual things are growing continuously)
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Raoul Duke
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October 30, 2012, 11:18:35 AM |
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What I got from this paper is that bicoin is money, currency, and therefore I can setup shop and sell it without charging 23% VAT to my customers.
The paper says very little about how virtual currencies should be treated legally, it only describes how they work and relate to the real world economy. Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper... Draw your own conclusions.
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October 30, 2012, 12:49:30 PM |
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Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper... Draw your own conclusions.
No thanks, that is too risky when we're talking about legal issues.
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Raoul Duke
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October 30, 2012, 01:12:12 PM |
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Yes, it does say the markets are unregulated, but it calls it currency and cash throughout the paper... Draw your own conclusions.
No thanks, that is too risky when we're talking about legal issues. What are you doing here, then? I wouldn't touch Bitcoin with a ten foot pole if I was you...
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October 30, 2012, 01:56:10 PM |
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What are you doing here, then? I wouldn't touch Bitcoin with a ten foot pole if I was you... I guess my world is significantly less black and white than yours.
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