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Author Topic: Legal Tender  (Read 5331 times)
Babylon
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July 19, 2010, 09:32:06 AM
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This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor in the U.S. There is, however, no Federal statute that requires private businesses, persons, or organizations to accept it as payment for goods and/or services.[17]

This is from wikipedia. It may be the author's opinion, but it looks to me as if there is no obligation, in the US, to conduct business in dollars. Unless you are offering credit of some sort.

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mtgox
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July 19, 2010, 11:48:50 AM
 #2

Yeah bartering is legal in the US.
I was wondering at what point a thing switches from being considered a commodity to being a currency. There is an exchange that sells pork bellies for example and that is totally legal. I feel like bitcoins can just be considered a commodity and thus be legal to trade/exchange in the US.

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July 19, 2010, 03:41:24 PM
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Heh, my mom works at Whole Foods, and they have a sign that says "We Accept ALL forms of payment."... I wonder how well it'd go over to try paying in bitcoins.  Grin

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July 19, 2010, 03:52:08 PM
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Heh, my mom works at Whole Foods, and they have a sign that says "We Accept ALL forms of payment."
I think that's a politically correct way of saying "we accept food stamps."   Try going in with a fistful of Euros and see what happens.

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July 19, 2010, 04:01:21 PM
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=P Still, kind of humorous.

Also, it occurs to me, Whole Foods seems like the kind of company which would get really excited about the whole concept of Bitcoins.  I wonder what they would say if someone approached them about being the first major retailer to support bitcoins? Wink

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July 20, 2010, 02:31:51 AM
 #6

If bitcoins are backed by electricity(sort of) what effect will carbon taxes have?
Does It mean bitcoin will be supporting the government by paying it massive carbon taxes?

The government is proposing $40 a tonne carbon taxes which will pretty much double my electricity bill.
RHorning
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July 20, 2010, 04:59:03 PM
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If bitcoins are backed by electricity(sort of) what effect will carbon taxes have?
Does It mean bitcoin will be supporting the government by paying it massive carbon taxes?

The government is proposing $40 a tonne carbon taxes which will pretty much double my electricity bill.

Carbon taxes are something that is not only a scam but something that will never happen.  You can debate with me on this point on another thread (preferably on the off-topic area) as to the merits or lack thereof for carbon taxes, but the political support for the idea simply isn't there in Congress, and too many people in the U.S. Congress want to get re-elected to vote for the idea before November.  It would also be nearly the first thing proposed for repeal by the subsequent congress if it ever were enacted during a lame duck session.  The votes simply aren't there for it to be passed.

As for the role of bitcoins, I think it is a wrong notion to make that bitcoins represent electricity in the first place.  They don't.  What they represent is a method of distribution more akin to a lottery where people have to submit millions or even billions of "tickets" with the off chance that one of them might be a winner.  That it may consume a whole bunch of electricity to produce the bitcoins and those who squander electricity strictly for the purpose of creating bitcoins may have to pay some extra taxes for that privilege, it isn't and should never be something tied directly to the value of bitcoins in the first place.

Also, bitcoins represent that effort that has already been expended in that manner, not the future effort that will happen.  The rationale of a carbon tax is to discourage the future generation of energy that would supposedly produce CO2 into the atmosphere, which would imply that it would be the generation of bitcoins that is the issue and not the use of already generated bitcoins.  The amount of energy needed (including CPU processor time and network bandwidth) for processing bitcoins is relatively trivial and in fact quite comparable to other currency transactions.

To reiterate, bitcoins don't represent electricity or CPU cycles or any such nonsense, but represent a mathematical difficulty to prevent a widespread devaluation of the currency.  That is a huge difference.

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July 20, 2010, 09:45:48 PM
 #8

This is from wikipedia. It may be the author's opinion, but it looks to me as if there is no obligation, in the US, to conduct business in dollars. Unless you are offering credit of some sort.

It also includes things like people who pick up things off your store shelves and go to you at the cash register for payment. It's important to remember that it really does mean all debts.
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July 20, 2010, 10:40:30 PM
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This is from wikipedia. It may be the author's opinion, but it looks to me as if there is no obligation, in the US, to conduct business in dollars. Unless you are offering credit of some sort.

It also includes things like people who pick up things off your store shelves and go to you at the cash register for payment. It's important to remember that it really does mean all debts.

Not true.  $100 are legal tender.  the store on the corner will not accept them.  The fact they will not accept them does not mean that I can then walk out the door with the bag of chips I picked up off the shelf.

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July 21, 2010, 01:42:30 AM
 #10

If bitcoins are backed by electricity(sort of) what effect will carbon taxes have?
Does It mean bitcoin will be supporting the government by paying it massive carbon taxes?

The government is proposing $40 a tonne carbon taxes which will pretty much double my electricity bill.

Carbon taxes are something that is not only a scam but something that will never happen.  You can debate with me on this point on another thread (preferably on the off-topic area) as to the merits or lack thereof for carbon taxes, but the political support for the idea simply isn't there in Congress, and too many people in the U.S. Congress want to get re-elected to vote for the idea before November.  It would also be nearly the first thing proposed for repeal by the subsequent congress if it ever were enacted during a lame duck session.  The votes simply aren't there for it to be passed.

As for the role of bitcoins, I think it is a wrong notion to make that bitcoins represent electricity in the first place.  They don't.  What they represent is a method of distribution more akin to a lottery where people have to submit millions or even billions of "tickets" with the off chance that one of them might be a winner.  That it may consume a whole bunch of electricity to produce the bitcoins and those who squander electricity strictly for the purpose of creating bitcoins may have to pay some extra taxes for that privilege, it isn't and should never be something tied directly to the value of bitcoins in the first place.

Also, bitcoins represent that effort that has already been expended in that manner, not the future effort that will happen.  The rationale of a carbon tax is to discourage the future generation of energy that would supposedly produce CO2 into the atmosphere, which would imply that it would be the generation of bitcoins that is the issue and not the use of already generated bitcoins.  The amount of energy needed (including CPU processor time and network bandwidth) for processing bitcoins is relatively trivial and in fact quite comparable to other currency transactions.

To reiterate, bitcoins don't represent electricity or CPU cycles or any such nonsense, but represent a mathematical difficulty to prevent a widespread devaluation of the currency.  That is a huge difference.

I should have pointed out it is the Australian government I am talking about.They have the green fever very badly and will bring it in for the votes.In my opinion it is a con-job on us all.Thanks for the explanation on bitcoin being viewed as a representation of electricity,it seems to be a widespread misconceptioin.I guess once all the coins have been generated the energy usage will drop significantly,unless the amount of coins ever changes....

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July 21, 2010, 02:28:35 AM
 #11

If bitcoins are backed by electricity(sort of) what effect will carbon taxes have?
Does It mean bitcoin will be supporting the government by paying it massive carbon taxes?

The government is proposing $40 a tonne carbon taxes which will pretty much double my electricity bill.

Carbon taxes are something that is not only a scam but something that will never happen.  You can debate with me on this point on another thread (preferably on the off-topic area) as to the merits or lack thereof for carbon taxes, but the political support for the idea simply isn't there in Congress, and too many people in the U.S. Congress want to get re-elected to vote for the idea before November.  It would also be nearly the first thing proposed for repeal by the subsequent congress if it ever were enacted during a lame duck session.  The votes simply aren't there for it to be passed.

As for the role of bitcoins, I think it is a wrong notion to make that bitcoins represent electricity in the first place.  They don't.  What they represent is a method of distribution more akin to a lottery where people have to submit millions or even billions of "tickets" with the off chance that one of them might be a winner.  That it may consume a whole bunch of electricity to produce the bitcoins and those who squander electricity strictly for the purpose of creating bitcoins may have to pay some extra taxes for that privilege, it isn't and should never be something tied directly to the value of bitcoins in the first place.

Also, bitcoins represent that effort that has already been expended in that manner, not the future effort that will happen.  The rationale of a carbon tax is to discourage the future generation of energy that would supposedly produce CO2 into the atmosphere, which would imply that it would be the generation of bitcoins that is the issue and not the use of already generated bitcoins.  The amount of energy needed (including CPU processor time and network bandwidth) for processing bitcoins is relatively trivial and in fact quite comparable to other currency transactions.

To reiterate, bitcoins don't represent electricity or CPU cycles or any such nonsense, but represent a mathematical difficulty to prevent a widespread devaluation of the currency.  That is a huge difference.

I should have pointed out it is the Australian government I am talking about.They have the green fever very badly and will bring it in for the votes.In my opinion it is a con-job on us all.Thanks for the explanation on bitcoin being viewed as a representation of electricity,it seems to be a widespread misconceptioin.I guess once all the coins have been generated the energy usage will drop significantly,unless the amount of coins ever changes....



The funny (and sad) thing here is that carbon is a fundamental element of life. Sure, too much of it in the atmosphere in the form of CO2 isn't good, and sure, humans are adding to atmospheric concentrations, but compared to all the other problems on this earth, I think this one is pretty far down on the list. A small boost could even be beneficial.

I'm all for clean, green technologies, but it seems that whenever CO2 taxes are implemented, some people get rich and a lot more people get screwed.

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RHorning
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July 21, 2010, 03:39:25 AM
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I guess once all the coins have been generated the energy usage will drop significantly,unless the amount of coins ever changes....

Sad thing is that there isn't an "end" to coin generation..... the new coin blocks simply become worth less and less over time.  If deflation of Bitcoins outstrips the drop in coin value, however, the new coin blocks in terms of relative worth may actually continue to increase over time even with this drop in direct value.  That is why I've been using the lottery example, as with a very large network it would become like a major lottery for whoever actually got the next block.  Perhaps eventually there will be people who aren't interested in the coin generation feature, but they still will be interested in the trades.  That will only cause the "value" of generated coins to be all that more valuable.

I do wonder what the taxes on a Bitcoin block worth more than $1 million on the exchanges would be like in terms of a government demanding "their share" of either those bitcoins or the conversion of those coins into "real world" money to pay those taxes.  Considering a new Bitcoin block is currently worth €3.5 (via https://www.bitcoinexchange.com/), even now it isn't a trivial matter.

Of course this is very off-topic on a thread about legal tender.

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July 21, 2010, 01:25:05 PM
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I guess once all the coins have been generated the energy usage will drop significantly,unless the amount of coins ever changes....

Sad thing is that there isn't an "end" to coin generation..... the new coin blocks simply become worth less and less over time.  If deflation of Bitcoins outstrips the drop in coin value, however, the new coin blocks in terms of relative worth may actually continue to increase over time even with this drop in direct value.  That is why I've been using the lottery example, as with a very large network it would become like a major lottery for whoever actually got the next block.  Perhaps eventually there will be people who aren't interested in the coin generation feature, but they still will be interested in the trades.  That will only cause the "value" of generated coins to be all that more valuable.

I do wonder what the taxes on a Bitcoin block worth more than $1 million on the exchanges would be like in terms of a government demanding "their share" of either those bitcoins or the conversion of those coins into "real world" money to pay those taxes.  Considering a new Bitcoin block is currently worth €3.5 (via https://www.bitcoinexchange.com/), even now it isn't a trivial matter.

Of course this is very off-topic on a thread about legal tender.

Due to the 8 places of divisibility, there will actually be a last "coin generating" block (someone else figured it out).  However, there WILL be transaction fees to further incentivize block generation.

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Some Mouse
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July 21, 2010, 03:33:40 PM
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Not true.  $100 are legal tender.  the store on the corner will not accept them.  The fact they will not accept them does not mean that I can then walk out the door with the bag of chips I picked up off the shelf.

Huh, I guess I am wrong:
http://www.ustreas.gov/education/faq/currency/legal-tender.shtml

Wonder where I got that from.
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July 22, 2010, 12:40:35 AM
 #15

Due to the 8 places of divisibility, there will actually be a last "coin generating" block (someone else figured it out).  However, there WILL be transaction fees to further incentivize block generation.

In 100 years, a new coin block generated will be worth 0.000001490116119384765625 bitcoins (give or take a few on the last digits of accuracy).  That is still within the 8 places of divisibility.  It will take quite some time before the value of a newly generated bitcoin completely drops off the face of the universe, and with some of the ideas for bitcoins that have been suggested for extended precision values, that could take even longer.  It may not be worth the processing effort to create new coin blocks, but there will be new coin blocks for quite some time in the future as long as somebody cares to make them.

At least in theory, there isn't an end in sight for when the last coin block will be created, and certainly not on a practical level.  If Bitcoins is still active and in use in 100 years, I would be very much surprised.

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Babylon
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July 22, 2010, 01:13:05 AM
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the blocks will continue to be generated to generate transaction fees as well.

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July 22, 2010, 02:09:07 AM
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Due to the 8 places of divisibility, there will actually be a last "coin generating" block (someone else figured it out).  However, there WILL be transaction fees to further incentivize block generation.

In 100 years, a new coin block generated will be worth 0.000001490116119384765625 bitcoins (give or take a few on the last digits of accuracy).  That is still within the 8 places of divisibility.  It will take quite some time before the value of a newly generated bitcoin completely drops off the face of the universe, and with some of the ideas for bitcoins that have been suggested for extended precision values, that could take even longer.  It may not be worth the processing effort to create new coin blocks, but there will be new coin blocks for quite some time in the future as long as somebody cares to make them.

At least in theory, there isn't an end in sight for when the last coin block will be created, and certainly not on a practical level.  If Bitcoins is still active and in use in 100 years, I would be very much surprised.

Something that I'm curious about actually; is the process of processing transactions / generating new coins the same? I can see the rationale for compensating for transactions at some point, because the cost to generate a new bitcoin will at some point exceed the additional value gained from said bitcoin.

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July 22, 2010, 02:13:11 AM
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Yes, generating a block right now includes a "proxy transaction", which pulls bitcoins out of thin air.  In time, this will pull coins out of the other transactions instead to incentivize continued block generation.

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RHorning
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July 22, 2010, 02:34:28 AM
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Something that I'm curious about actually; is the process of processing transactions / generating new coins the same? I can see the rationale for compensating for transactions at some point, because the cost to generate a new bitcoin will at some point exceed the additional value gained from said bitcoin.

Yes, the current difficulty/generation system being used for creating "new" bitcoins is going to be the same for those future bitcoin blocks, and the attempt to "normalize" the generation of those coins to about one every 10 minutes is at least still going to be attempted to be maintained.

I could imagine a time when most people would be willing to "turn off" the bitcoin generation option simply because of the trivial nature of any new coins that are generated.  If running the generator continuously for an entire year would only earn you $1 in equivalent currency, would it be worth the effort to you?  Even if that was on a 10k server farm attempting to generate coins?  It seems to me that most people and certainly most server farms would simply give up at that point.

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July 22, 2010, 07:18:47 AM
 #20

legal tender is a term strictly used in reference to payment of a debt, absolutely anything can be accepted as payment.

If there is no "debt" and you are simply offering something as payment for something you desire, the seller is entitled to refuse whatever you are offering even if it is legal tender.

on the other hand, if you are indebted to someone, if they refuse to accept legal tender then the court will not enforce the debt.

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