Changing Contract Law to Attack Bitcoin

[Mageant]

I just recently watched this video and a guy made a good point that governments don't need to outlaw Bitcoins per se, to attack them. Instead they could change contract law such that if Bitcoins (or anything similar) were part of a deal then one party could renege on their part of the contract without consequences. This would make it possible to scam whenever buying or selling something using bitcoins.

How do you think the Bitcoin community would react to this? Do we rely on government protection for deals?

See here:
http://www.youtube.com/watch?v=R6J3ET_achU#t=1251s

[DrSammyD]

Did you know that international contracts are enforced by nobody?

There is no governing body which enforces international merchant contracts. AND YET, 25% of the world wealth is generated in this manner. Some how people are able to trust each other enough in order to trade and honor contracts regardless of whether or not government would enforce a contract in bitcoins.

Also, in most cases, it costs MORE to bring someone to court than the amount you would get back from winning the suit. So effectively, the government is not backing up those transactions. And yet, some how, people are able to have the trust to make transactions with each other.

I suggest you look up the "Folk Theorem" and "Signaling" as to how people are able to sort out their transactions without help from the state.

For more, Might I suggest this video
http://www.youtube.com/watch?v=-5PbLLBfiM8&feature=channel_video_title

[Mageant]

At least in Germany I know that the government does offer securities for international trade. Meaning that if a person doing international trade does not get paid then the government pays for them.

But what if, say, somebody steals or scams your Bitcoins? Do we still expect governments to punish Bitcoin thiefs or scammers?

I'm thinking we can't have it both ways. Meaning on the one hand snub government by usurping their money-making authority but then when we get into difficulties seek protection or recourse through the government. So if we want to have a system that works without government, then we will eventually have to give up everything governments have to "offer" in this regard.

[BitterTea]

Regardless of whether or not governments try to attack Bitcoin in this way, systems will be created to prevent (reputation) and settle (arbitration) disputes outside of any territorial jurisdiction. People will subscribe to these services voluntarily, without the need for taxation.

Who needs government? Not me.

[jspielberg]

If I had to guess... Bitcoin won't be the end of taxes.  It will be the "end of taxes as we in the U.S. know it".  Most European countries are already doing this, so it won't be that big of a change for them.

I speculate that we will migrate to a VAT/sales tax where taxes will be collected for consumption.  The person selling will be responsible to report the sale and the taxes collected.

I don't see taxes going away, as there is a "safe level of government" that people enjoy and expect.  What is needed is agreement from all the stakeholders on what exactly that size is, and fund it accordingly.

[Mageant]

After watching the video posted above, I'm not really worried about this kind of "attack" anymore. It would probably not be effective and bring more attention to Bitcoins than the governments want (see Streisand effect).

[realnowhereman]

I've thought that Land Value Tax + Citizen's Income was a better taxation model for a while now anyway.

LVT fits perfectly with Bitcoin. All other taxes would be scrapped.  You'll find it very hard to hide from a land value tax; with the added bonus that it's more tax efficient, better for poorer people and acts as a brake on housing bubbles and associated credit crises.

(This guy has covered all the LVT myths, so go there if you want to debate LVT.

http://markwadsworth.blogspot.com/)

[DrSammyD]

After watching the video posted above, I'm not really worried about this kind of "attack" anymore. It would probably not be effective and bring more attention to Bitcoins than the governments want (see Streisand effect).

Glad to know I was of some help!

[Freakin]

If I had to guess... Bitcoin won't be the end of taxes.  It will be the "end of taxes as we in the U.S. know it".  Most European countries are already doing this, so it won't be that big of a change for them.

I would guess it will be the start of a massive tax evasion crackdown in the US.

[Timo Y]

Right from the beginning, the Bitcoin economy has not relied on contract enforcement.  The Bitcoin economy is held together by reputation and ostracism,  not contract and force.

[want2learn]

Did you know that international contracts are enforced by nobody?

There is no governing body which enforces international merchant contracts. AND YET, 25% of the world wealth is generated in this manner. Some how people are able to trust each other enough in order to trade and honor contracts regardless of whether or not government would enforce a contract in bitcoins.

Also, in most cases, it costs MORE to bring someone to court than the amount you would get back from winning the suit. So effectively, the government is not backing up those transactions. And yet, some how, people are able to have the trust to make transactions with each other.

I suggest you look up the "Folk Theorem" and "Signaling" as to how people are able to sort out their transactions without help from the state.

For more, Might I suggest this video
http://www.youtube.com/watch?v=-5PbLLBfiM8&feature=channel_video_title

This lurker registered just to post these links:

http://www.law-counsel.com/Legal_information/contract_law/
http://en.wikipedia.org/wiki/Conflict_of_laws
http://en.wikipedia.org/wiki/Lex_loci_contractus

[Mageant]

After watching the video posted above, I'm not really worried about this kind of "attack" anymore. It would probably not be effective and bring more attention to Bitcoins than the governments want (see Streisand effect).

Glad to know I was of some help!

Yeah, thanks!

[Arius]

Contracts date back a thousand years, contract law is much newer.  Things can exist without laws.  Laws are a violent means that the ruling class uses to inflict norms on society.  Don't buy the hype, people can behave well without laws.  A contract is just a written agreement between two parties, you don't need cops to shake hands.  I suspect that you're more concerned about torts, contract violations.  Here's a suggestion, the BTC community needs a professional arbitration service.  Call it "For Profit Justice".  When there's a dispute between two contractually bound parties, a neutral arbiter can determine the extent of the violation, decide on a restitution, and rule in favor of one party or the other.  That business can then publish a list of all individuals that have breached a contract and failed to make restitution.  That way, anyone planning to transact with another BTC user can consult the "Dishonest List" to check the credibility of the other party.  Additionally, there can be an arbitration fee.  Then, there will be competing arbitration firms and sound contract enforcement, without state violence.  I know it's hard to see things in free market terms, but I believe we can do it.