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Author Topic: Is Bitcoin legally a Currency?  (Read 3678 times)
DeathAndTaxes
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August 16, 2013, 03:38:40 AM
 #41

Re: Is Bitcoin legally a Currency?

What has historically made a currency legitimate defacto is the ability to pay perceived tax obligations, so no, Bitcoin is not a currency, because currently no taxing authority will accept it..

In the USA the US Dollar must be accepted for existing debt, under law and criminal penalties if not, so it appears the modern definition, at least in the USA, is to pay existing debt byway of coercive threat of force/death.

Some might confuse "currency" with "legal tender".  The meaning is as distinct as the spelling.
The first has a practical definition, the second a legal one.
There are private currencies.
http://en.wikipedia.org/wiki/Private_currency
(Hey look, Liberty Dollar made the list and not yet Bitcoin?  Someone should update it.)

Then I guess the hinge-pin is my use of the word 'legitimate'. Allow me to replace that with 'defacto'.

Bottom line at the end of the day is mean men with guns will kill me if I dont pay them with it and resist their attempts to imprison me for my inaction, which realistically requires me to earn it and use it, or I could go to prison or die, because they never deescalate or back off until equal-to-greater force is applied. They will keep sending more and more men until I pay, am in prison or dead. Then they take my property away from my heirs, sell it and recoup my refusal to obey.

So, for my purposes, I meant a currency you can pay Caesar what is Caesar's with.

You maintain the confusion between terms.  Your description is of legal tender, and nothing really to do with currencies, legitimate, defacto or otherwise.
That a particular currency is legal tender within a geographic region does nothing to invalidate all other currencies that may be bartered about.  Legal tender just means that it can settle a debt under the law, such as a tax debt, which you can get by hanging out in an area with a government that taxes people.  Legal tender also means that you are obliged to accept it to settle any other debt.  It does not require you to transact using it, only to not refuse it if used to pay a debt (you can't require BTCBTC instead if $$ are offered) unless these are specific terms in a contract, and if that contract gets litigated, it will likely end up being $$ anyway as "specific performance" (another legal term that can require a different payment) is much more difficult to get from a judge.

Look at other debts such as a restaurant bill.  The restaurant is required to accept legal tender if paid, but is free to accept dishwashing, a good review in a magazine, hugs or anything else they might choose.  So dishwashing can be a currency.  What makes a currency is the fluidity by which transactions can occur with it.  Like the current in a river, the more money flow, the more defacto it is a currency. 

So bitcoin is a "currency" but there is nothing either illegitimate or legitimate about that term.  50K transactions a day make it a pretty good one (though maybe not as good as hugs).  Currency is not a legal term of art in the way that "legal tender" or "current money" are.

Not in history prior to recent legal tender laws. If you could pay your taxes, the currency was acceptable anywhere and by everyone in the land. That is true today as well. I was not arguing that there were not other forms of currency, but valid to me means I can live on it. You cant live lawfully and without charity on a currency that is not accepted for everything, everywhere by everyone, especially taxes. It requires conversion. In that context, Bitcoin is indeed illegitimate/invalid, Yes, I know I can jump through all sorts of fancy hoops to convert it. That isnt the point.

Well definitions are only useful when agreed upon by the masses.  I can start calling day the period of time when the moon provides enough illumination to read a street sign from 10 ft away but it doesn't really do any good.  In fact all it does it create a huge amount of confusion (two different groups calling the same thing different names). 

For example the euro is most currency a currency but if you have Euro's in the US you have absolutely no choice but to convert some of them to dollars to pay your taxes.  That doesn't magically make the Euro "not a currency".  The fact that someone, somewhere can pay their taxes in Euros doesn't really help you or meet your somewhat nonsensical definition.

The Euro is a currency.  The Bitcoin is a currency.  The dollar is a currency.
The dollar is not legal tender in the EU.
The Euro is not legal tender in the US.
The Bitcoin is not legal tender anywhere (yet).
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August 16, 2013, 06:06:24 AM
 #42

Re: Is Bitcoin legally a Currency?

What has historically made a currency legitimate defacto is the ability to pay perceived tax obligations, so no, Bitcoin is not a currency, because currently no taxing authority will accept it..

In the USA the US Dollar must be accepted for existing debt, under law and criminal penalties if not, so it appears the modern definition, at least in the USA, is to pay existing debt byway of coercive threat of force/death.

Some might confuse "currency" with "legal tender".  The meaning is as distinct as the spelling.
The first has a practical definition, the second a legal one.
There are private currencies.
http://en.wikipedia.org/wiki/Private_currency
(Hey look, Liberty Dollar made the list and not yet Bitcoin?  Someone should update it.)

Then I guess the hinge-pin is my use of the word 'legitimate'. Allow me to replace that with 'defacto'.

Bottom line at the end of the day is mean men with guns will kill me if I dont pay them with it and resist their attempts to imprison me for my inaction, which realistically requires me to earn it and use it, or I could go to prison or die, because they never deescalate or back off until equal-to-greater force is applied. They will keep sending more and more men until I pay, am in prison or dead. Then they take my property away from my heirs, sell it and recoup my refusal to obey.

So, for my purposes, I meant a currency you can pay Caesar what is Caesar's with.

You maintain the confusion between terms.  Your description is of legal tender, and nothing really to do with currencies, legitimate, defacto or otherwise.
That a particular currency is legal tender within a geographic region does nothing to invalidate all other currencies that may be bartered about.  Legal tender just means that it can settle a debt under the law, such as a tax debt, which you can get by hanging out in an area with a government that taxes people.  Legal tender also means that you are obliged to accept it to settle any other debt.  It does not require you to transact using it, only to not refuse it if used to pay a debt (you can't require BTCBTC instead if $$ are offered) unless these are specific terms in a contract, and if that contract gets litigated, it will likely end up being $$ anyway as "specific performance" (another legal term that can require a different payment) is much more difficult to get from a judge.

Look at other debts such as a restaurant bill.  The restaurant is required to accept legal tender if paid, but is free to accept dishwashing, a good review in a magazine, hugs or anything else they might choose.  So dishwashing can be a currency.  What makes a currency is the fluidity by which transactions can occur with it.  Like the current in a river, the more money flow, the more defacto it is a currency.  

So bitcoin is a "currency" but there is nothing either illegitimate or legitimate about that term.  50K transactions a day make it a pretty good one (though maybe not as good as hugs).  Currency is not a legal term of art in the way that "legal tender" or "current money" are.

Not in history prior to recent legal tender laws. If you could pay your taxes, the currency was acceptable anywhere and by everyone in the land. That is true today as well. I was not arguing that there were not other forms of currency, but valid to me means I can live on it. You cant live lawfully and without charity on a currency that is not accepted for everything, everywhere by everyone, especially taxes. It requires conversion. In that context, Bitcoin is indeed illegitimate/invalid, Yes, I know I can jump through all sorts of fancy hoops to convert it. That isnt the point.

Well definitions are only useful when agreed upon by the masses.  I can start calling day the period of time when the moon provides enough illumination to read a street sign from 10 ft away but it doesn't really do any good.  In fact all it does it create a huge amount of confusion (two different groups calling the same thing different names).  

For example the euro is most currency a currency but if you have Euro's in the US you have absolutely no choice but to convert some of them to dollars to pay your taxes.  That doesn't magically make the Euro "not a currency".  The fact that someone, somewhere can pay their taxes in Euros doesn't really help you or meet your somewhat nonsensical definition.

The Euro is a currency.  The Bitcoin is a currency.  The dollar is a currency.
The dollar is not legal tender in the EU.
The Euro is not legal tender in the US.
The Bitcoin is not legal tender anywhere (yet).

Right... trying to deal in Bitcoin in the USA is slightly better than Zimbabwe Dollars at the moment.
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August 19, 2013, 07:25:42 PM
 #43

It's in the news: The german Ministry of Finance accepts Bitcoin as a currency.

http://www.tagesschau.de/wirtschaft/bitcoin100.html
http://www.heise.de/newsticker/meldung/Berichte-Finanzministerium-erkennt-Bitcoins-an-1937531.html

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August 20, 2013, 12:55:19 AM
 #44

And German Kapital Gains..
http://www.telegraph.co.uk/finance/globalbusiness/10252383/Germany-plans-tax-on-bitcoin-after-virtual-currency-recognised-as-private-money.html

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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August 20, 2013, 08:44:18 PM
 #45

Well it's not so much about planing taxes over here. Bitcoins can be considered a kind of income, thus there is a kind of income tax to be paid. Plus if you owe money to the state but your bank account is void, they'll happily take your bits.

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August 21, 2013, 12:58:48 AM
 #46

I believe that the Bitcoin Foundation's argument is that in California BTC doesn't meet the definition of a currency.

I read the Bitcoin Foundation's arguments against the California Regulators and that's not the argument they used.  The CA regulators were arguing that the Bitcoin Foundation was engaging as a money transmitter and the Bitcoin Foundation replied that they are not.  Their argument is that they aren't doing any money transmitting, and that even if they were, they aren't doing business in California so that the California Regulators have no grounds to regulate them.  See their letter for the full details of their response.

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August 21, 2013, 05:03:08 AM
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I just don't get it.... why people are getting into legal trouble with Bitcoin. How can they say you need a Money transmitter license for Bitcoin? What is the difference between Bitcoin and Swagbucks or XBox points? To me it's just a digital product with no need for Government regulation at all.

While bitcoins may or may not be considered a currency, Bitcoin[//b] certainly is not a currency, or not only a currency: it is a computer program, an accounting system, p2p network, a protocol, a public ledger of digitally signed transactions, decentralized time-stamping service, etc.

Keeping this in mind will  help you think and argue more clearly.

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