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Author Topic: A disadvantage of NOT being recognized as currency by governments  (Read 2656 times)
bitlotto
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July 01, 2011, 03:01:45 PM
 #1

Being totally off of any laws does allow for way more freedom. This is a huge plus. But, a little while ago I was approached about rigging my lottery and splitting the winnings. (apparently they missed the part where it's impossible) I think the most interesting thing they said was:

Quote
and it wouldn't technically be so (referring to theft/fraud), because bitcoins don't have a worth recognized by the government so it would be equivalent to scamming someone of some gold in a MMRPG
-only remaining anonymous because I promised before the conversation expecting some type of business deal...

I didn't really think about that till then. The double edge sword of using the argument "it's not recognized by law anyway as currency". Because it's not recognized as currency by law emboldens some to try to steal. Regrettably this wild freedom also has it's cost. Probably more scammers and thieves.

Myself, I'd probably pick total freedom even with this cost. IMHO it's worth it.
edit: I just wish we could still have the freedom but still punish those who do steal

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July 01, 2011, 03:15:33 PM
 #2

As you say, everything has its goods and bads.

But in this case, you are being unfair towards liberty. The government is imposing a monopolly on justice therefore making it impossible for private justice companies to appear and deal with this type of situations.
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July 01, 2011, 03:17:33 PM
 #3

http://www.bbc.co.uk/news/technology-12357005

Just because our cryptochips aren't used exclusively for poker doesn't mean a theft of $500,000 worth of data is not theft.

-MarkM-

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July 01, 2011, 03:21:26 PM
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I think in most jurisdictions, promising goods and services you know you won't deliver is considered fraud. It does not matter if these "goods" are recognized as a currency or not. I am using that reasoning to avoid the bitcoin ponzi scheme (I think participating in a ponzi scheme, disclosed or not, is illegal in my jurisdiction).

I think in the US they consider wire fraud more serious because it happens remotely and as such is scary.

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July 01, 2011, 03:22:52 PM
 #5

As you say, everything has its goods and bads.

But in this case, you are being unfair towards liberty. The government is imposing a monopolly on justice therefore making it impossible for private justice companies to appear and deal with this type of situations.
Good point. I'm more a computer nerd and not well versed in politics! Wink

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July 01, 2011, 03:46:23 PM
 #6

A real engative for miners: you all do tax fraud Wink

If bitcoins are not a currency, then they are a good. if they are a good, then all kinds of transactional taxes apply. in the US you may have to charge sales tax, in europe a "miner" is basically "creating" bitcoins which, if they are a good, require VAT to be collected on a sale. SIGNIFICANT disadvantage - suddenly you loose a significant part, theoretically, of your income, unless you sell them out of europe Wink
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July 01, 2011, 03:47:41 PM
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Seems to me that it is possible and in fact not uncommon to cheat people using systems that are, in theory, lawful and supposedly regulated.

Google 'redefining systemic risk' for a very interesting vid.  During the dot-com (which is the first time I ever had any money) It became clear to me that the SEC's purpose in life is to hold 'normal' down while they are ass-raped by the SEC's hedge fund owners.  I went with PM's instead.

I have vastly more confidence in bitcoin than I do in anything which is officially protected by the US corp/gov system.  bitcoin is actually remarkably simple and straightforward.  And are proving themselves to be quite robust under what would be the equivalent of a nuclear bomb in most systems (that is, the loss of 90% of the exchange platforms, huge thefts, early adopters with massive holdings, etc.)

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July 01, 2011, 03:55:32 PM
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it wouldn't technically be so (referring to theft/fraud), because bitcoins don't have a worth recognized by the government so it would be equivalent to scamming someone of some gold in a MMRPG

People cannot be trusted. This is why the bible was invented.

The bible exists it order to control people from justifying behaviors without moral consequence.

It's why the 10 commandments were adopted.

Just because you CAN kill people, it doesn't mean you should.

But people aren't that smart or responsible.

So the only thing smart and responsible to do to control people was to tell them that an imaginary force called GOD was watching them at all times and that they'd be punished for wrong-doing.

Viola! Murders go down.


Remember folks: thou shall not steal. It's fun when you do it to other people, it's not fun when other people do it to you.
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July 01, 2011, 04:05:47 PM
 #9

A real engative for miners: you all do tax fraud Wink

If bitcoins are not a currency, then they are a good. if they are a good, then all kinds of transactional taxes apply. in the US you may have to charge sales tax, in europe a "miner" is basically "creating" bitcoins which, if they are a good, require VAT to be collected on a sale. SIGNIFICANT disadvantage - suddenly you loose a significant part, theoretically, of your income, unless you sell them out of europe Wink

I, in my capacity as Digitalis Data Services, provide data services, such as the manipulation of data.

Were I to sell a program, Nova Scotia and/or Canada sales taxes, lately combined it seems as "GST" would be chargeable. However were I to fix some flaw in a program or correct some inadequacy of a database, a data field, a variable's value etc etc etc, that kind of service is, 'they' assured me, not subject to such tax.

-MarkM- (I'd still owe income tax if I earned enough in a year to be so rich I'd owe them instead of them paying me via GST rebates etc.)

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July 01, 2011, 05:15:39 PM
 #10

A trade with bitcoins is protected by the law exactly like a trade with gold or what else

If i sign a contract where i exchange gold for bitcoin and you take the gold and run away without paying, well, law will protect me.
enmaku
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July 01, 2011, 05:23:44 PM
 #11

A real engative for miners: you all do tax fraud Wink

If bitcoins are not a currency, then they are a good. if they are a good, then all kinds of transactional taxes apply. in the US you may have to charge sales tax, in europe a "miner" is basically "creating" bitcoins which, if they are a good, require VAT to be collected on a sale. SIGNIFICANT disadvantage - suddenly you loose a significant part, theoretically, of your income, unless you sell them out of europe Wink

I operate a mining business: I produce a commodity for which I am paid in U.S. Dollars. This is no different from being a farmer or mining actual gold. If I hold some of my BTC it's roughly the same as keeping some of my crops/gold for personal use or as savings. All of the above scenarios have specific tax statutes which apply to them and which should apply to bitcoin until such time as it becomes regulated otherwise. Since tax law currently views me in the same light as a farmer or (gold) miner, my taxes will be prepared and paid in precisely the same manner.

For investors, it's much the same as trading stocks, bonds, commodities or FOREX. Gains are not considered "realized" until BTC are converted back into USD and captial gains taxes are to be paid on any realized gains as normal.

I don't understand why everyone thinks of bitcoin any differently right now. It's essentially the same as a commodity market: people produce it, people use it as an investment vehicle and people use it for barter - there are specific tax laws for each and every one of these scenarios (at least in the U.S.) with regard to other commodities and at present they're quite likely to apply directly to bitcoin.

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July 01, 2011, 05:59:26 PM
 #12

OP:  .... And having things like TOR around allows for child rapists and murders to communicate with each other.  Theoretically, a silk road human/sex trafficking market could emerge (or already exist).

The down side to privacy and freedom is that the bad guys also have it.  You have to decide for yourself if this is something you can live with.

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July 01, 2011, 06:21:04 PM
 #13

OP:  .... And having things like TOR around allows for child rapists and murders to communicate with each other.  Theoretically, a silk road human/sex trafficking market could emerge (or already exist).

The down side to privacy and freedom is that the bad guys also have it.  You have to decide for yourself if this is something you can live with.
I know. I think the advantages out weigh the disadvantages. I was just stating ONE disadvantage to having no laws laying out exactly what bitcoins are. People will use the argument - well it's digital toy money. I know it's a bullshit justification. I'm happy as long as bitcoins are recognized as "property with value" and that thieves are prosecuted if found.

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July 01, 2011, 06:52:37 PM
 #14

A real engative for miners: you all do tax fraud Wink

If bitcoins are not a currency, then they are a good. if they are a good, then all kinds of transactional taxes apply. in the US you may have to charge sales tax, in europe a "miner" is basically "creating" bitcoins which, if they are a good, require VAT to be collected on a sale. SIGNIFICANT disadvantage - suddenly you loose a significant part, theoretically, of your income, unless you sell them out of europe Wink

I operate a mining business: I produce a commodity for which I am paid in U.S. Dollars. This is no different from being a farmer or mining actual gold.

Exactly as I say Wink Gold is VAT taxed in europe Wink Ouch.

This is potentially a critical area. I am in the same problematic area here, things still being under review in my accountant's office Wink
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July 01, 2011, 06:57:59 PM
 #15

You practically don't need courts of law of you have escrow and GPG web of trust.

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July 01, 2011, 07:09:00 PM
 #16

Being totally off of any laws does allow for way more freedom. This is a huge plus. But, a little while ago I was approached about rigging my lottery and splitting the winnings. (apparently they missed the part where it's impossible) I think the most interesting thing they said was:

Quote
and it wouldn't technically be so (referring to theft/fraud), because bitcoins don't have a worth recognized by the government so it would be equivalent to scamming someone of some gold in a MMRPG
-only remaining anonymous because I promised before the conversation expecting some type of business deal...

I didn't really think about that till then. The double edge sword of using the argument "it's not recognized by law anyway as currency". Because it's not recognized as currency by law emboldens some to try to steal. Regrettably this wild freedom also has it's cost. Probably more scammers and thieves.

Myself, I'd probably pick total freedom even with this cost. IMHO it's worth it.
edit: I just wish we could still have the freedom but still punish those who do steal


Whoever sent you that message is a moron. I've been involved in gaming in other unregulated places such as Second Life and Avination, and i can tell you this: the lack of regulation does attract dishonest people, however the ones that keep their games honest and provide good service make a lot of money in the long run (so much more that its totally counterproductive to cheat).

Another advantage of noregulation, the honest game owners are able to provide MUCH HIGHER payback-ratio than you'll find on any online casinos (because they don't have to spend annual fees on licensing, and countless amounts of hours auditing). Any regular player will quickly realize if a game is rigged or if it's fair.

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July 01, 2011, 07:14:21 PM
 #17

Being totally off of any laws does allow for way more freedom. This is a huge plus. But, a little while ago I was approached about rigging my lottery and splitting the winnings. (apparently they missed the part where it's impossible) I think the most interesting thing they said was:

Quote
and it wouldn't technically be so (referring to theft/fraud), because bitcoins don't have a worth recognized by the government so it would be equivalent to scamming someone of some gold in a MMRPG
-only remaining anonymous because I promised before the conversation expecting some type of business deal...

I didn't really think about that till then. The double edge sword of using the argument "it's not recognized by law anyway as currency". Because it's not recognized as currency by law emboldens some to try to steal. Regrettably this wild freedom also has it's cost. Probably more scammers and thieves.

Myself, I'd probably pick total freedom even with this cost. IMHO it's worth it.
edit: I just wish we could still have the freedom but still punish those who do steal


I wonder what the heck they thought they were bringing to the table.   If you planned to cheat,  why split it etc.... and who could trust them and why should they trust you for a planned cheat,  lol...

In any case,  I think he is wrong,  I think in any common law jurisdiction at least,  the existing case law would make it theft/fraud.  Legal tender does not need to exchange hands for this.  Else seems thieves would be running rampant, as long as they just made sure not to touch those worthless dollars.

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July 01, 2011, 08:01:10 PM
 #18

I would promise confidentiality to someone ONLY contingent on their offering something legitimate. If they offer to run a blatant scam, I no longer consider it (or their identity) confidential.

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July 01, 2011, 08:08:09 PM
 #19

I just wish we could still have the freedom but still punish those who do steal


You punish them by imposing opportunity costs. You refuse to do business with them in the future and you warn others to do the same. If this seems inadequate, all the more reason to prevent fraud and theft in the first place.

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July 01, 2011, 08:14:00 PM
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only remaining anonymous because I promised before the conversation expecting some type of business deal

You have no responsibility to someone trying to commit fraud. If I tell you to promise to keep a secret, and then reveal to you that my secret is that I am a lifetime conman or a serial killer, you do not have a responsibility to keep my secret.

On the contrary, you have a responsibility to let people know who is attempting this fraud, so that people may protect themselves from this scum. He's likely conning unwitting people in the Bitcoin Marketplace right now.

So, who is it?

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