The Internet Archive To Pay Salaries Partly In Bitcoin, Requests Donations

hypnosec writes "Bitcoin is gaining popularity among mainstream sites lately and the latest to adopt the digital currency as a medium of donations and payments is the Internet Archive. Ready to accept donation in the form of Bitcoin, the Internet Archive announced that it wants to do so to pay some part of employees' salaries, if they choose to, in Bitcoin. The Archive, known for its storage of digital documents (especially the previous version of webpages), is looking to start part salary payments in Bitcoin by April 2013 if everything goes well."

Comments

I'd quit

[Anonymous Coward]

The day my employer tells me I'm getting paid in Itchy and Scratch money is the day I stop working for them.

Re:I'd quit

[Anonymous Coward]

I'm amazed at how stupid people are.

Bitcoins can be converted to other real world currencies ya know?

My company accepts bitcoins and this is exactly what we do.

Re:I'd quit

[trytoguess]

Understandable. Luckily that's not what's happening here:

"Internet Archive announced that it wants to do so to pay some part of employees' salaries, if they choose to, in Bitcoin."

That's a direct line from the article the summary quoted. I do admit though, it's a rather inefficient sentence if you want to get a point across clearly.

Re:I'd quit

[AK Marc]

Sure, but I'd prefer to not be paid in corn futures either, though those can be converted.

Re:I'd quit

[AK Marc]

No, I want to be paid in Euros. Despite all the US jokes about the Euro about to collapse (OMFG, one of 17 countries has a debt ratio worse than the US, the entire continent is about to collapse), the Euro is in much better shape than the US, where not only is the fed on the brink of collapse, but most of the states, and most citizens of those states as well.

What I can't figure out is the "fiat" loons here love bitcoin, despite it being the most fiat currency ever conceived (aside from joke coinage, like mining company chits and other worker abuses before unions saved us all, which are also defended by "fiat loons").

Re:I'd quit

[Dan541]

Not only that but you're earning alot of money has the price of bitcoin continues to climb.

I was paid 100BTC a month ago, that was worth $1500.

Today that $1500 has turned into $3000.

Anyone who would turn down bitcoin is a fool.

Re:I'd quit

[HJED]

It does say they are offering it as an option, not requiring their employes to take it.

Re:I'd quit

[Great Big Bird]

Never would I want to get paid in Bitcoin. I am not anonymous. Bitcoin has benefits for sure, but there is too much uncertainty in the market for it to be worth this.

Re:I'd quit

[Anonymous Coward]

By this logic there is no money in niche markets. Catering to people with bitcoins brings in money from the underground sorts. I don't sell anything that is illegal or can't be bought with USD although I'm pretty confident most of my customers who pay in bitcoins aren't exactly operating legitimate businesses. What they don't turn into USD doesn't attract attention. My bitcoin customers make a lot more custom requests for encrypted setups and things of that nature. However as long as I'm not involved, the requests are legal, and we don't know what they are using the systems for there isn't a reason to decline there money. Its just as good as USD and I'm pretty confident we wouldn't have this money otherwise. We almost never got these sorts of requests for encryption until we started taking bitcoins.

Re:I'd quit

[Darinbob]

If it's so easy, then the employer can pay in REAL money.

Re:I'd quit

[Darinbob]

It is not as good as USD because you can't use it to pay for anything except amongst a tiny group of people. Maybe it has value like any other barter item but so do collectible figurines, so good luck trying to pay your for your meal or mortgage with them.

Re:I'd quit

[jonbryce]

If its value in Dollars can double in a month, it can half in a month.

Or put it another way, if you think it is going to continue to rise in value, would you sign a rental agreement payable in Bitcoin?

Re:I'd quit

[jonbryce]

I would be quite happy to be paid in German Euros, but not Greek Euros which might end up being converted into Drachma.

Re:I'd quit

[Anonymous Coward]

"uncertainty in the market" - it's exactly this reason why and these times when people turn to alternate currency, like gold, diamonds or Bitcoin.
Any currency based on national debt (which is what we currently are using) seems to be problematic in the long term. Bitcoin has it's own issues but dependance on un-elected and unbalanced federal reserve isn't one of them, which ironically was founded to ensure the stability of the financial system.
It's feature of being a "deflationary currency" is certainly a strong selling point when we're seeing the dollar tank verses energy and living expenses, and interest rates too low to make savings a good idea.

The best investment advice is "Buy Low, Sell High". The second best advices is "Diversify!". Bitcoin seems to be outpacing gold and other monetary metals in exchangeable value, and is designed to be worth more later as it grows in popularity (I would argue that it's already found success in multiple ways), and as it's not recognized as "money" or anything with intrinsic value - could arguably be given as salary without income tax. It certainly could be done without anyone being the wiser. Render unto Ceaser what is Ceaser's, I'd take a portion of my salary as Bitcoin in a heartbeat.

Corporations and the folks at the top have already gamed the government and financial systems beyond repair for themselves. It's time to start switching to a people's currency that's likely not possible to be gamed.

"I am not anonymous." - Great Big Bird

"I am Sparticus!" - Anonymous

Re:I'd quit

[Anonymous Coward]

damn it, my drug pusher only takes greenbacks, not Bitcoin.

Re:I'd quit

[mwvdlee]

Your sure your not ignorant?

Re:I'd quit

[ouranogrammi]

I am quite paranoid about my euros, but since the money circulates free on European Union there is no chance of discrimination between a Greek printed Euro and a German one...

Re:I'd quit

[Dan541]

Nope, I figured out a way to make money off bitcoin. Which is pretty cool considering it's practically money for nothing.

Re:I'd quit

[Anonymous Coward]

Nope, I figured out a way to make money off bitcoin. Which is pretty cool considering it's practically money for nothing.

No, it is money for arbitrage. You are being rewarded for risk, which makes you a shrewd businessman if you realize it, or a fucking moron otherwise.

Re:I'd quit

[Anonymous Coward]

Um no. You can exchange them for USD or just about any other currency of your choosing.

I've actually managed to pay ~25% of my expenses for the last two years with bitcoins, using them either directly or indirectly with a few smaller mining rigs.
I use them directly to pay my hosting, vpn, investments in silver, and the rest is converted to USD to pay off my car. (so yeah, you can pay your meal or mortgage no problem)

The amount of places accepting them is growing fast, with over 2000 merchants using the bitpay processor alone right now.

I find them great to use directly when I can. Payment is almost instant. Don't have to worry about credit card data. You have direct evidence of transaction via the blockchain, so the one time I actually did have an issue with a transaction (cart failed), it was easy to show a valid transaction did indeed occur and was quickly resolved.

But it's easy enough to convert to dollars too if you want.

Re:I'd quit

[jonbryce]

Possibly. Greek Euros have a serial number beginning with a Y. German Euros have a serial number beginning with an X.
What I'm more concerned about is money in Euro bank accounts. If it is in a Greek bank account, even hsbc.gr which is actually registered with the Financial Services Authority in England under the same registration as my hsbc.co.uk account, it could get converted to Drachma.

Re:I'd quit

[jonbryce]

Well it did fall dramatically following the problems with the MTGox exchange.

Re:I'd quit

[brokenin2]

I'm posting pseudonymously instead of anonymously.. Wow, I can really feel the difference.. Fear is overwhelming me.. Let me see.. If my karma drops, what exactly happens then? Oh yeah.. a number somewhere that doesn't really mean anything changes.

I have a fair chunk of change for my discretionary spending, but it's almost all in Bitcoin. Sure, I pay the electric bill in USD (for now) and buy the groceries that way, but there are plenty of things that I won't buy unless I can buy them with Bitcoin. They are missing out on *some* sales.. Maybe the number isn't very significant, but for the ease of setting it up, I don't see why you wouldn't accept them.

Now, the reason I keep a lot of my money in Bitcoin is because it is a superior currency. No two ways about it. People sit there and bitch and moan about a 1% tax hike here, or there, but then immediately turn right around and are completely oblivious to a 50% tax that just took 1/2 of all their wealth.. They don''t notice when this happens because China buys up all the extra money that the CB keeps printing, but I'll wager a guess that they'll notice one day, when China comes back over here and purchases the west coast using our own money.

Re:I'd quit

[Mashiki]

Why not? Right now you're looking at nearly a 35% gain if you were being paid now in corn future and selling them in 4 months. That's a hell of a turn around, that even beats the most aggressive and risky stock trading you can get the down and dirty in.

Re:I'd quit

[dbIII]

What I can't figure out is the "fiat" loons here love bitcoin

That's how they try to prove it's a currency instead of a ponzi to swap.

Re:I'd quit

[dbIII]

Not as bad as Australian Euros, which could be converted to burgers when people get tired of horse (http://www.rootourism.com/fsheet28.htm).

Re:I'd quit

[TheRaven64]

The value of US dollars can also vary quite considerably. The problem is being paid in a different currency to the one that you spend money in. It's a bigger problem when they're not linked in some way. I live in the UK, but do a reasonable amount of work for companies in the USA. Currently one US dollar is worth about 66p. Earlier this year it was 63p. A few years ago, it was 46p and it went up to about 60p over a year. Euros have varied from 78p to 89p over this year. The UK economy is closely linked to both the EU and US economies, so these tend to be largely self-correcting: fluctuations in the value of one currency affects the others. The advantage of being paid in the one that you are paying for things in is that the cost of the things that you are buying changes quite slowly relative to your income. With Bitcoin, unless you are living in a community where everyone (including farmers and landlords) accepts Bitcoins there is no feedback between your income and your expenditure. When bitcoin crashes, there there will be no bailouts and the value of the bitcoins isn't insured. It's just like being paid in any other commodity or corporate stock: there may be a massive demand for tulips...

Re:I'd quit

[egcagrac0]

Why not take those bitcoin each month and put them on red?

Green pays better. (When it hits.)

Re:I'd quit

[drinkypoo]

"uncertainty in the market" - it's exactly this reason why and these times when people turn to alternate currency, like gold, diamonds or Bitcoin.

You are here using a cheap propaganda technique to conflate gold and diamonds, which have intrinsic value and actual scarcity (well, of gold) with Bitcoins which are an imaginary currency based on artificial scarcity which is based on wasting electricity.

Re:I'd quit

[drinkypoo]

But you failed to figure out how not to get whooshed.

If you weren't ignorant, you'd know how to use an apostrophe.

Congratulations on making money off of wasting electricity, we sure do need more people doing that. Shitbag.

Re:I'd quit

[TheRaven64]

There are not Greek Euros. The emergency plan for Greece leaving the Euro would be for every Euro to become (for example) 0.9 Euros and one Drachma. The total number of Euros in circulation would remain constant so the currency would (ignoring the lack of confidence that such a move would create) remain constant, but the Drachma would be effectively worthless, so everyone with money in Euros would lose approximately 10% of their savings. This probably wouldn't matter long-term, because the Greek economy would likely recover over the next couple of decades and so those Drachmas would be worth something again, but in the interim it would be a big problem. That's why no one really wants to see it happen.

The US can maintain a (mostly) stable currency because they have a federal taxation system that moves money from the wealthy states to the poorer ones[1]. The EU doesn't have such a mechanism, which means that the money flows from the weaker economies to the poorer ones with not reset mechanism.

[1] For some reason, the people in the poorer states consistently vote for people who want to end this.

Re:I'd quit

[TheRaven64]

I would imagine that they pay him with tokens that the US government, promises to accept in exchange for taxes, and which oil-producing counties promise to accept in exchange for oil, guaranteeing a fairly large medium-to-long-term demand.

Re:I'd quit

[Bill Dimm]

I don't think you understand how a futures contract works (or you're just wildly speculating). The futures price is not the price of the underlying asset -- it takes into account the appreciation of the underlying asset that is expected to occur over the life of the contract (and some adjustment for interest rates). So, the expected payout (ignoring interest rate effects) of the contract is $0.

Also (this is more a reply to the parent), futures contracts are "marked to market." You pay nothing to enter into one (although you'll need to have cash in your account). Each day money is added/removed to your account based on changes to the future price, so the value of the contract itself is zero. Hence, if someone pays you in futures, they've paid you nothing -- you may gain/lose money in the future due to fluctuations, but the expected value of those fluctuations is 0.

Re:I'd quit

[Dan541]

But you failed to figure out how not to get whooshed.

If you weren't ignorant, you'd know how to use an apostrophe.

Because a persons grammar is the one true way of measuring financial success.

Congratulations on making money off of wasting electricity, we sure do need more people doing that. Shitbag.

In the same way you're wasting electricity by providing a demonstration of your stupidity on Slashdot.

Re:I'd quit

[crtreece]

the most fiat currency ever conceived

You must have some non-standard definition of fiat that I have not encountered before. In the wikipedia fiat money article, we see a few definitions:

• any money declared by a government to be legal tender.
• state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
• money without intrinsic value.

Not being state backed would eliminate the first 2. You might personally question the "intrinsic" part of item 3 and you might not place value on it, some bitcoin mining machine performed a specific, well defined, item of work to create a bitcoin, giving it value within the community.

Merriam-webster gives:

• a command or act of will that creates something without or as if without further effort
• an authoritative or arbitrary order

Creation of bitcoins requires effort, maintaining the blockchain requires effort, and there is no authority that can arbitrarily create bitcoins without doing the work, so I don't see how any of those would apply.

You seem to be equating bitcoins with floozor beenz.

Re:I'd quit

[betterunixthanunix]

Bitcoins can be converted to other real world currencies ya know?

Without which Bitcoin would have no value at all. Which is why I would quit if someone told me I was going to be paid with Bitcoin.

Re:I'd quit

[fatphil]

And your company is so desperate to receive bitcoins that you post anonymously so that nobody can do business with you?

Re:I'd quit

[Anonymous Coward]

Until governments accept Bitcoin tax payments, it will be a toy currency, popular among anarchists and irrelevant elsewhere.

Oh look, a other idiot that don't get it. You buy bitcoins with your USD, magically send them over the Interwebs, they then get converted back to USD(or what every currency the recipient prefer). Unlike bank transfer, the whole process only take a few minutes, it cost nothing and is anonymous just like cash in your wallet.

Can you send cash over the Interwebs? No. Therefore during the 21st century, USD will become a toy currency popular among old peoples and irrelevant to everyone else.

Posting as AC because I moderated other idiots that spread FUD and falsehood before I got annoyed enough to write a reply.

Re:I'd quit

[sourcerror]

Who will convert bitcoins to USD without fees?

Re:I'd quit

[trout007]

The word salary comes from sal or salt because people were paid in that commodity.

Re:I'd quit

[pla]

Anyone with bitcoins knows that they need real money as well. So any bitloon would also have some other way to pay, or they aren't eating tonight.

Anyone with an oil field knows they need real money as well.
Anyone with cattle knows they need real money as well.
Anyone with gold knows they need real money as well.
Anyone with a silo full of corn knows they need real money as well.

Anyone with "real money" can't eat it.
Anyone with "real money" knows they need GBP (when they visit the UK).
Anyone with "real money" can't put it in their gas tank (though I suppose you could burn it for heat).

Use of one currency doesn't preclude the use of others. Bitcoin, whether the haters gonna hate or not, has become the preferred online currency for small-scale international transactions between people whose governments have silly archaic rules about sending "real" money into or out of the country (ie, all of them). Case in point, try sending $50 to a friend in a country that doesn't use your native currency. You can expect to nearly double that in the various fees you'll need to pay to do it legally and safely (by which I mean not stuffing an envelope with bills and praying you can trust the postal service in both countries).

"Real money" has exactly one required use - Paying your annual government extortion bill. For everything else, you can use whatever the hell both sides of the transaction agree upon. Corn, wine, oil, gold, frankincense, myrrh, BTC. All good, so long as both sides agree.

Re:I'd quit

[jonbryce]

It fell everywhere by about 90% a few days after that, then recovered over the next 6 months or so.

Re:I'd quit

[anyaristow]

Why would they want to? Is this how they've been told their salary can be made more competitive, and the alternative is to be underpaid? Is there implied coercion, as in "This is how we're going to try balancing the books. Who wants to participate?"

Re:I'd quit

[pla]

Accepting salary as a commodity is insane

Funny choice of words.

mid-14c., "compensation, payment," whether periodical, for regular service or for a specific service; from Anglo-French salarie (late 13c.), Old French salarie, from Latin salarium "salary, stipend," originally "soldier's allowance for the purchase of salt," noun use of neuter of adjective salarius "pertaining to salt," from sal (genitive salis) "salt" (see salt (n.)). Japanese sarariman "male salaried worker," literally "salary-man," is from English. The verb meaning "to pay a regular salary to" is attested from late 15c. [etymonline.com]

Some sources also claim that Roman soldiers originally got paid with actual salt, later shifting to payment in token currency rather than the commodity merely as a matter of convenience.

All just a matter of what you value the most. If you spend half your income on booze, why wouldn't you take payment in whiskey? Likewise, if you send a lot of money into and/or out of your home country, why would you want the hassle of dealing with money changers or international money orders, when you could get paid partially with a lower-friction currency not bound to any particular country's economy?

Re:I'd quit

[betterunixthanunix]

You buy bitcoins with your USD

Ah, the transaction costs we all love.

magically send them over the Interwebs

"Magic" is an apt description of most pro-Bitcoin arguments.

they then get converted back to USD

Which may or may not be anything remotely near what you put in in the first place, due to the high volatility and utter lack of any guarantee about convertibility. I guess a system run on "magic" would have these properties.

Unlike bank transfer, the whole process only take a few minutes

Credit card transactions take seconds.

it cost nothing

False.

is anonymous

This was repeatedly shown to be false.

just like cash in your wallet.

Except that Bitcoin cannot be used for secure offline payments, the way cash can. Oh, what, you think that digital cash is always online? Think again:

http://blog.koehntopp.de/uploads/chaum_fiat_naor_ecash.pdf

When I first read the Bitcoin paper, I was shocked by the lack of background research it presented. No mention of Chaum's work at all. No mention of previously developed or deployed digital cash systems. This seems to be the MO of the Bitcoin community: lack of background research. Why should we take you people seriously if you have not even bothered to read papers that can be found in minutes just by reading overview articles on Wikipedia?

Therefore during the 21st century, USD will become a toy currency popular among old peoples and irrelevant to everyone else

Not even remotely accurate. Unless you think the US government is going to stop demanding tax payments made in USD, the overwhelming majority of American adults will require USD. The added overhead of Bitcoin, the added risk and volatility will keep it an obscure anarchist toy compared to USD.

Re:I'd quit

[pla]

It makes for one less step when they want to buy their drugs.

Sorry, my dealer only takes payment in Tide Unscented. Do you know of a good BTC to detergent exchange?

Re:I'd quit

[drinkypoo]

Gold is plentiful in the oceans,

And titanium is one of the most common metals on the planet. So?

and diamonds are just a form of carbon with no inherent scarcity.

But they do have intrinsic value as they are useful for many manufacturing processes, and it's still expensive to make them as compared to digging them out of DeBeers' vaults, due (again) to the energy cost.

Re:I'd quit

[Zontar The Mindless]

But you failed to figure out how not to get whooshed.

If you weren't ignorant, you'd know how to use an apostrophe.

Because a persons grammar is the one true way of measuring financial success.

Because financial success is the one true way of measuring one's worth.

Re:I'd quit

[Anonymous Coward]

Taxes are the primary economic reason you'll never see Bitcoin replace national currencies. Until governments accept Bitcoin tax payments, it will be a toy currency, popular among anarchists and irrelevant elsewhere.

as far as i can see it it does not matter if you can pay taxes with it since when using it there are no taxes to be paid

Re:I'd quit

[Anonymous Coward]

The problem of the Euro isn't GDP to debt ratios, it's low growth and sluggish markets. Even the mighty Germans aren't expanding fast enough to keep up with inflation. Add to this an aging population (far more lopsided than the US), fear and hatred of immigration, and a total lack of domestic demand for their own products and you have an economy that only feels strong when there are stable export markets. Enter the Euro, watch all of the EU's money flow into Germany so they can look like a powerhouse for a decade. Look at the 90s and tell me you've though about this whole thing long term.

Re:I'd quit

[Mashiki]

I don't think you understand how a futures contract works (or you're just wildly speculating).

Assuming, only makes the worst things in life possible. It's always a good idea to realize that some people were supposed to grow up and take up farming and didn't. Though sometimes I wish I had.

Re:I'd quit

[tompaulco]

Check again. It's about $30 these days.

Re:I'd quit

[Anonymous Coward]

You buy bitcoins with your USD

Ah, the transaction costs we all love.

There is no transaction cost. A little exchange fee, if that what you mean. But unlike with bank with quasi monopoly, there is actual competition.

magically send them over the Interwebs

"Magic" is an apt description of most pro-Bitcoin arguments.

Magically as in the 'magic of the Interwebs' figure of speech. eg: You are a moron for thinking I meant bitcoin is actually magic.

they then get converted back to USD

Which may or may not be anything remotely near what you put in in the first place, due to the high volatility and utter lack of any guarantee about convertibility. I guess a system run on "magic" would have these properties.

In the time frame of the transaction the volatility is negligible. If you ever bought thing internationally you would be used to little variance on what was billed to you credit card. Also the more peoples participate in the system the faster the transaction are completed. And it is the 'interwebs' that look like magic to the gullible, like you, that think that any bank fee are reasonable with today's technologies. P2P money transfer is a welcomed competition to these bank monopolies.

Unlike bank transfer, the whole process only take a few minutes

Credit card transactions take seconds.

To be check, it take several days for the merchant to have to money deposited in his bank account.

it cost nothing

False.

True. The only cost of having a Bitcoin 'account' is a PC, electricity to run it and internet access to do transaction.

is anonymous

This was repeatedly shown to be false.

With enough effort you can always trace anything back to the origin. In practice it is anonymous enough for most. Just like cash is.

just like cash in your wallet.

Except that Bitcoin cannot be used for secure offline payments, the way cash can. Oh, what, you think that digital cash is always online? Think again:

The purpose of bitcoin is to transfer money over the internet without bank overhead. You still don't get it...

http://blog.koehntopp.de/uploads/chaum_fiat_naor_ecash.pdf

When I first read the Bitcoin paper, I was shocked by the lack of background research it presented. No mention of Chaum's work at all. No mention of previously developed or deployed digital cash systems. This seems to be the MO of the Bitcoin community: lack of background research. Why should we take you people seriously if you have not even bothered to read papers that can be found in minutes just by reading overview articles on Wikipedia?

TL;DR

Therefore during the 21st century, USD will become a toy currency popular among old peoples and irrelevant to everyone else

Not even remotely accurate. Unless you think the US government is going to stop demanding tax payments made in USD, the overwhelming majority of American adults will require USD. The added overhead of Bitcoin, the added risk and volatility will keep it an obscure anarchist toy compared to USD.

What part of 'transfer back to USD' you didn't understand? You can do that to pay due taxes. In the meanwhile everyone buy everyday products and serviced over the Interwebs and only old peoples go to a brick and mortar store with their purse full of antiquated paper money. Electronic money is here to stay. Bitcoin or a other system that have yet to come, you will know a system became the norm when the state tried and failed to ban it.

Re:I'd quit

[letherial]

its up to 30.00 now.....

The problem with bitcoins is it feels like its a unstable market, just in agusust it was stuck around 10 but now its jumped up to 30. Might be a good investment to hold onto them but you take a chance of someone flooding the market and dropping the price dramatically. Imagine getting paid 500.00 worth as your paycheck but before you could get cash the price drops 50%.....i dont know if it could happen but bitcoin prices have dropped dramatically before. Plus, bitcoins are easily stold if you dont know how to protect them.

I wouldnt want to get paid with them, at least no more then 10% of my check. I would however like to point out that it is optional, they are not forcing anyone to accept bitcoins and compensation and that is rather cool.

I for one like bitcoins and i hope they stable out

Re:I'd quit

[AK Marc]

We haven't had value "by decree" since price controls by those liberal Republicans in the early 1970s. Unless you live in China, where they fix the value of the RMB against the dollar, then the value of your currency, even fiat currency, is set by supply and demand on the open market. Bitcoin is fiat all the way down, and any argument against that is an argument against the US dollar being "fiat".

Re:I'd quit

[AK Marc]

My other comment in this thread was "I'd quit if I were offered payment in corn futures as well". Anything you have to convert to spend is not very useful. At least with Euros, I'd be able to spend them directly at European websites, assuming I could get them deposited in a bank that would hold them as Euros.

Re:I'd quit

[AK Marc]

Not being state backed would eliminate the first 2.

Yes, like hand-written IOUs are debts, and not currency. It seems the restriction on the first two is more related to the definition of "money" and not the "fiat" part. Fiat money is not backed by anything, and there is no guaranteed exchange of it to anything else. Oddly, your definition also states "The term fiat money has been defined variously as" as if the definition is not well fixed, and given that 2 of the three don't apply to gold-backed paper money, it seems most definitions don't work for the common usage (gold-backed is not considered fiat, and unbacked is considered fiat). Also, Wikipedia is weakest in areas where lots of loons exist. Politics and economics are two topics with lots of edits and definitions contrary to usage. This doesn't appear to be an exception.

Re:I'd quit

[Zontar The Mindless]

I like how all the hate on Bitcoins are Anonymous.

I could have sworn it was the other way round--seems to me like all the big Bitcoins boosters here are ACs...

Oh, and I think the whole concept is dumber than a brick, and I am not posting AC.

Re:I'd quit

[Zontar The Mindless]

You seem to have succumbed to the reverse propaganda if you think that gold and diamonds are inherently more scarce and hence inherently more secure as a currency than bitcoin. The fact is that bitcoin are actually a lot harder to mine....

So would be purple unicorns, but I'm not hearing many suggestions that we adopt them as a medium of exchange.

Re:I'd quit

[Dan541]

Such, that's why I'm making money and you're not :D

Re:I'd quit

[Time_Ngler]

If people didn't invest in things, no one with an idea and without money would be able to build anything. We'd still probably all be farmers if that is the case. Of course, this concept of producing something is probably so fucking foreign to you, you whiny little crybaby fuck nut, that you make up stories about how people with money are holding you down, you pathetic little piece of shit cunt fuck dick head asshole dweeb fuck wad, you fucker, you.

Re:I'd quit

[Terrasque]

That's funny. You know why? Because here in Norway you can't use USD to pay for anything except amongst a tiny group of people.

Not unless you convert them into real money first. I guess this shows that USD is just a toy currency and will never amount to anything in it's life.

Re:I'd quit

[Darinbob]

I missing your point here. I can pay with USD to anyone in the US, and quite a lot of people in other countries even without exchanging it first.

Re:I'd quit

[crtreece]

Yes, like hand-written IOUs are debts, and not currency

Hopefully not too far off on a tangent, but we have to, by force, accept IOUs from an institution as currency. The Federal Reserve (not a 100% government agency, with no reserves) is owned primarily by private banks. It can take direction from the US government, if they want.

If you want to get paid in Euros, dollars, or any other IOU where the issuing authority can up and say "We're going to raise/lower/ignore the money supply", who am I to tell you no.

gold-backed is not considered fiat, and unbacked is considered fiat

I think that "backed by something tangible" is a (still with some wide, grey area), where the fiat line gets drawn. Gold, silver, steel, oil? Base a currency off them and I probably wouldn't call it fiat. Full faith and credit of the US (or any other government, or per your previous example, corporation)? Smells like fiat to me. Full faith of the bitcoin network? Until someone attempts to launch a 51% attack on the network, I'll at least believe a bitcoin is worth a bitcoin. As long as that is possible, there will be someone willing to exchange them for other currencies, an exchange rate, and by definition, some value in owning a bitcoin.

If you want to call bitcoins a commodity instead of a currency, I could understand that. What I don't understand it applying the fiat label to them.

Also, Wikipedia

Fair enough. I grabbed the first thing I could find, which doesn't often turn out to the be best way.

Re:I'd quit

[AK Marc]

Hopefully not too far off on a tangent, but we have to, by force, accept IOUs from an institution as currency.

That's completely incorrect. You are required, by law (force, as you like to say) to accept them for debts, but not as currency.

Full faith and credit of the US (or any other government, or per your previous example, corporation)? Smells like fiat to me.

Full faith of the bitcoin network?

There is no backing of it at all. A bitcoin is worth $0 by definition (or, the amount of electricity to calculate some number). So if "they" default, you've lost nothing. It's backed by nothing because it does not assert to have any value at all. That doesn't make it better or worse, just harder to define based on current words.

Re:I'd quit

[crtreece]

You are required, by law (force, as you like to say) to accept them for debts, but not as currency.

Them? Dollars, bitcoins, IOUs? By definition, currency is generally accepted as a medium of exchange. Dollars are currency, but I do not have to accept them for debts owed to me, assuming I structure the transaction that way from the beginning. If I don't mind the limited number of trading partners available, I can accept barter, bitcoins, Deutch Marks, or any other commodity or currency I choose. But if I want to have the largest available number of trading partners, I better bring and accept dollars.

If I attempt to use bitcoins, euros, pesos, rubles, or some other non-dollar denominated item to pay my taxes, I will be refused. Eventually that will lead to either payment of that tax in the government approved form, or forced incarceration.

There is no backing of it at all. A bitcoin is worth $0 by definition (or, the amount of electricity to calculate some number). So if "they" default, you've lost nothing. It's backed by nothing because it does not assert to have any value at all. That doesn't make it better or worse, just harder to define based on current words.

The bitcoin community believes that the computers using electricity to do the work of hashing on the bitcoin network has value. You don't have to follow this belief, there is no threat of force if you do not accept or make payments in bitcoins.

The backing for that bitcoin is the further work done by the network to validate transactions and maintain the blockchain. This is obviously not backing in the sense that physical gold and silver used to back the US Dollar. It is backing in the sense that a bitcoin represents a very well defined unit of work requiring electricity, an algorithm, and some type of electronic computing device having been completed.

If the entire bitcoin network went down, and I had a validated bitcoin sitting in my wallet, did I lose something? I would think so. If I had mined that bitcoin, I lost the money invested in energy and the computing device that generated it. I lost the ability to trade that bitcoin for a good or service. If I had purchased it, then I have lost the ability to purchase that good or service. A bitcoin doesn't have some specified dollar value, but that doesn't mean a bitcoin has $0 value.

Yes, we could have better words for all this. That part will come.

Re:I'd quit

[AK Marc]

Dollars are currency, but I do not have to accept them for debts owed to me, assuming I structure the transaction that way from the beginning.

That's incorrect. You are allowed to force use of something else for a transaction, but are required, by law (force) to accept dollars if the transaction becomes a "debt".

If you sell me a car at the price of one goat per month for 2 years, and after one year, I crash the car (totalled) so I stop paying, how can you collect "your" goats? Either you initiate force against me to steal my goats, or you petition the government to force me to pay. IF you win, they will force me to pay in USD, the appropriate currency for debt repayment, and you will never get your goats. By law, you must accept USD as payment for debts, but you are not required to accept it as currency.

Re:I'd quit

[crtreece]

so I stop paying, how can you collect "your" goats

I was not considering the case where a third party is brought in to arbitrate a dispute. I don't know enough about contract law to know if you are correct or not.

If the government is brought in, I could see where they might want the settlement to be in the terms of their currency.

It might also be an option for my suit to request "specific performance" of the contract, where my victory generates an order for you give me my goats on the previously agreed upon terms.

Re:I'd quit

[AK Marc]

Then address the case where a 3rd party is not brought in. How do you force the payment of goats? Theft? You can't enforce payment without initiating force of some kind, right?

It might also be an option for my suit to request "specific performance" of the contract, where my victory generates an order for you give me my goats on the previously agreed upon terms.

You'd be surprised how little that means in a dispute. They get a court order to present goats. If they don't abide by that, then they are forced to present the goats or money to that value, so in the end, you get paid USD, even if the contract explicitly states otherwise.

Re:I pay employees partly in high quality scrap st

[Anonymous Coward]

Your business involves working with steel, but you don't know how to spell it? How's business?

Re:I pay employees partly in high quality scrap st

[Anonymous Coward]

I think what he means is that he steals scrap metal to make the company payroll, business isn't doing so well on account of his poor spelling.

tax evasion?

[Anonymous Coward]

how should this be taxed?

Re:tax evasion?

[Merls the Sneaky]

Not at all. Governments can get their taxes when people cash out to spend it on goods, services or they can then count it as income. I doubt the government will be accepting bitcoins as a legitimate way to pay your taxes either.

Re:tax evasion?

[Anonymous Coward]

The same way everybody else does:
- Employer says "I'm paying this much in cash/Bitcoins which has a value of $X USD."
- Employer deducts taxes
- Employee says "I just got paid this much in cash/Bitcoins which has a value of $X USD."
- Employee files taxes.

WOW THIS POST DESERVES A DOCTORATE IN ECONOMICS

Re:tax evasion?

[putaro]

Consider yourself the proud recipient of a Piled Higher and Deeper.

Re:tax evasion?

[Miamicanes]

>How should this be taxed?

Easy. If salaries are pegged to the Bitcoin equivalent of some US Dollar value, their taxable salary is that dollar value. If they literally have a stable salary denominated in Bitcoins that doesn't change when Bitcoin's value does, handle it the same way you'd handle the salary of someone who lives in the US and works remotely for a European company & gets paid in Euros.

Re:tax evasion?

[Xugumad]

The same way you tax payments in any other non-USD currency.

Re:tax evasion?

[Bill Dimm]

Except that the exchange rate for Bitcoin may not be as well established as other currencies (I don't know that for sure, but it seems a reasonable guess), making it harder for your employer to defend the amount they paid during an audit.

Re:tax evasion?

[SuricouRaven]

The exchange rate fluctuates wildly. Bitcoin is a niche currency, so this is to be expected.

Re:tax evasion?

[Miamicanes]

If your salary is $1,250/week, payable in Bitcoins at the Mtgox exchange rate in effect at noon eastern on payday, or 95% of the highest rate between 9am & 5pm, whichever is higher, but you end up exchanging half of them for US Dollars 9 months later for 50% more, your reported income would be $1,250, and it's up to you to report the currency-speculation windfall to the IRS the way you would with any other currency. The fact that your employer did the speculation for you, with your permission, is irrelevant. What matters is that your salary is *defined* in Dollars, regardless of the currency in which payment is made.

If your salary were INVOLUNTARILY paid in bitcoins, your employer would be breaking federal law (legally, you'd have the right to demand payment in dollars if you're employed in the US... and you can't wave that right in a contract. You can choose to not exercise it, but the right is always there. They can offer you a bonus for payment in bitcoins, but ultimately your salary or wages must be Dollar-defined and equal or greater than minimum wage.)

Re:I pay employees partly in high quality scrap st

[Anonymous Coward]

Dear Sir:

I have been requested by the Nigerian National Steal Company to contact you for assistance in resolving a matter. The Nigerian National Steal Company has recently concluded a large number of contracts for scrap steal exploration in the sub-Sahara region. The contracts have immediately produced moneys equaling BTC40,000,000. The Nigerian National Steal Company is desirous of scrap steal exploration in other parts of the world, however, because of certain regulations of the Nigerian Government, it is unable to move these funds to another region.

You assistance is requested as a non-Nigerian citizen to assist the Nigerian National Steal Company, and also the Central Bank of Nigeria, in moving these funds out of Nigeria. If the funds can be transferred to your name, in your United States account, then you can forward the funds as directed by the Nigerian National Steal Company. In exchange for your accommodating services, the Nigerian National Steal Company would agree to allow you to retain 10%, or BTC4 million of this amount.

However, to be a legitimate transferee of these moneys according to Nigerian law, you must presently be a depositor of at least BTC100,000 in a Nigerian bank which is regulated by the Central Bank of Nigeria.

If it will be possible for you to assist us, we would be most grateful. We suggest that you meet with us in person in Lagos, and that during your visit I introduce you to the representatives of the Nigerian National Steal Company, as well as with certain officials of the Central Bank of Nigeria.

Yours truly,

Prince Anonymous Coward

Sea Monkey Money

[guttentag]

If they are interested in experimenting with paying their employees in Bitcoin, they should use real dollars to buy Bitcoin. If they can't manage converting dollars into Bitcoin, how are their employees supposed to manage buying goods and services with it? What are your options for paying rent or property taxes with Bitcoin? Or looked at another way, if they are so convinced that Bitcoin is a valid currency, perhaps the experiment should be to accept Bitcoin as a donation and convert it to local currencies with which their employees are normally paid. If they are consistently able to do so, then look at paying them in Bitcoin. Or bottle caps – wait, scratch that... Bottle caps are real physical objects. Or sea monkeys.

They forgot the first rule of Bitcoin:

[Compaqt]

Don't talk about BitCoin!

Been There, Done That

[billstewart]

I spent a decade or so as a systems engineering consultant supporting a group of sales people. Sales people generally experience the world differently than engineers, and sales managers do lots of different things that they think will motivate them to sell lots of stuff, compensating them in often rapidly and randomly changing mixtures of salary, commission, bonuses, recognition programs, plaques, cheap trinkets, expensive trinkets, travel, whatever. Most of those years the people supporting them got similar pay programs (usually more salary, less commission.) Yay, one year they gave us iPods, after I already had one!

For probably five years about 5% of my pay (from the "bonus" column, so it varied depending on how sales were doing) was in [BRAND NAME REDACTED] Points, which could be used for overpriced "luxury" consumer goods or for a limited number of stores, most of which I didn't shop at, using a sort of debit card that most places didn't take. Borders Books (so I bought a few more hardbacks than I would have, but "free books" was the only thing that made it feel like a perk), some clothing stores, Home Depot (but not during the years I was buying much there). They did cover some hotel chains, but mostly not useful ones for where I was traveling. Eventually I needed a new mattress, and the card worked at Macy's which was having a mattress sale, so I burned most of the balance on that, which left me a few hundred dollars that mostly went to books and coffee at the bookstore.

Re:Quantum Computing

[Dexter Herbivore]

The U.S Dollar is backed by the military! Bitcoin is backed by "economic terrorist"!

Ultimately, the *only* thing backing a currency is the confidence of those who use it.

genius

[shentino]

Well that's a genius move to getting government attention.

Get bitcoin mixed up with payroll and the IRS is sure to take interest with regards to income taxes.

This is going to get interesting very fast.

Re:Quantum Computing

[Anonymous Coward]

This is a good argument.

One one hand, the US Dollar is backed by permanent institutions with enormous power and interest in self-preservation.

On the other hand, Bitcoin is backed by computer nerds and drug-dealers who could get bored tomorrow and quit to play WoW & masturbate.

Hmmmmm.....

Re:Don't confuse exchange with speculation

[TheRaven64]

Everyone who uses Bitcoin is a currency speculator. You can't buy everyday essentials with it, so you have to turn it back into money that your grocer accepts to do so. If you're keeping the bitcoins and not exchanging them for useful commodities (food, shelter, shiny toys, whatever), you're gambling that they will increase in value over time. The current situation with Bitcoin is that a large number of people are making the same gamble. This becomes a self-fulfilling prophecy, right up until the point when a large number of them decide to cash out. You might want to read up on the stock market in the late 1920s for a nice historical example of this happening...

On the other hand, if you're selling it immediately, then you're telling the market that you don't trust it as a long-term store of wealth and this contributes to the volatility. And if you don't think this is problematic, then consider what would happen if the value of your monthly, or even weekly, paycheque varied by 50% every week. Or even more. If you get paid on Friday, but on Thursday don't know whether you'll be paid $1000 or $500 (or $50), how financially secure will you be? How will it affect the rest of the economy if everyone has such variable incomes that they hoard some other store of value (e.g gold, land, or even US dollars) to hedge against a possible crash?

Re:Quantum Computing

[drinkypoo]

Ultimately, the *only* thing backing a currency is the confidence of those who use it.

Almost. It's the confidence of those who might use it.

Donations please

[slick7]

I want to be paid in gold and silver, I am accepting all donations.

Re:Roll up! Roll up!

[Troed]

the more people that join the pyramid the more the "bitcoins" held by people like the above poster are worth

No. During the last year and a half, when the value of a bitcoin went from $32 (at which price point I bought a few) down to just above $2 (at which price point I didn't manage to buy a few) and then back up to $30 again the number of bitcoin users has increased exponentially.

There's actually no correlation whatsoever between the number of bitcoin users and the price of a bitcoin, which could be seen as falsifying your statement.

On the other hand, it's well known that the bitcoin economy in no way functions as a pyramid or ponzi scheme: http://www.quora.com/Is-Bitcoin-a-ponzi-scheme

Re:Quantum Computing

[Troed]

Only if you don't understand the difference between asymmetric and symmetric crypto.

You guessed wrong.

[DerekLyons]

You think the IRS doesn't already have procedures for employees getting paid in foreign currencies, or scrip, or in kind, or other carriers of value or anything else not US dollars? (That's a rhetorical question, because they do have such procedures.)

Re:You guessed wrong.

[Ritchie70]

Production of Bitcoin should be taxable just like anything else that you make. If you have a business making clothes, your taxable income is the difference between what you sell the clothes for and your cost of making them. In the case of mining Bitcoin, your expenses are primarily computer equipment, electricity and physical space to contain the computer equipment.

Getting paid in Bitcoin is either the same as getting paid in a foreign currency or the same as barter - an exchange of value.

IRS has procedures for barter.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center

Re:You guessed wrong.

[Ritchie70]

Your time is a cost in your business as well. It's usually paid for out of the business one way or another, whether by explicitly taking pay or by taking profits. It's just easier to talk about tangible stuff as expenses.

Re:Quantum Computing

[betterunixthanunix]

Ultimately, the *only* thing backing a currency is the confidence of those who use it.

Nonsense. The value of the USD is determined by supply and demand, like everything else. Demand does not come from "confidence," it comes from law: lax law, debt law, tort law, etc. When the government tells you, "Pay your taxes, or you go to prison," you suddenly have a need for the currency accepted for tax payments -- and in the US, that would be USD. Likewise with loans, damages awarded by courts, etc. The only "confidence" to speak of is confidence in the government's ability to enforce its laws.

Ironically, part of the demand for Bitcoin is demand for other currencies. I would argue that without the ability to exchange Bitcoin for fiat currencies, Bitcoin would have no value at all.

Re:Uses of BitCoin...

[Anonymous Coward]

It would be foolish to believe the only use of Bitcoin is to buy drugs.
Internet Archive employees could also use it to buy perfectly legitimate storage at Mega for their pirated downloads. Or to donate to the Internet Archive.

Re:Quantum Computing

[trout007]

The value of bitcoin comes from its ability to be securely, remotely, and anonymously traded. People value those things so the currency has value.

What would really destroy the value of bitcoin would be if countries were more free. Then there would be little use for it.

Re:Roll up! Roll up!

[pla]

Remember folks, the more people that join the pyramid the more the "bitcoins" held by people like the above poster are worth. Think of that vested interest after reading about how wonderful these things are.

Remember folks, don't take financial advice from people who don't understand the term "pyramid scheme".

Pyramid schemes: The "every gun is an AK-47" of the financial world.

This

[anyaristow]

Exactly this. If the employer wants to take bitcoins as money, let the employer do the conversion. Why put that off on your employees unless you don't really have faith in it.

If it's so easy, then the employer can pay in REAL money.

Re:Don't confuse exchange with speculation

[pla]

Everyone who uses Bitcoin is a currency speculator.

You could say the same about the US Dollar. You have "speculated" that the government won't default; that Bernanke won't devalue the dollar (even more) with another even bigger round of QE; that Walmart won't decide next week that they only take payment in gold or vintage Furbys or Yuan (yes, they can. No, it doesn't.)


You can't buy everyday essentials with it

Not the best hill to die on - You can buy just about anything denominated in BTC today. In addition to the thousands of online vendors that take it, you can even visit a growing number of brick-and-mortars that take it.

Mainstream?

[anyaristow]

Let me know when sites that are actually mainstream take donations or payment in bitcoin.

Real Bitcoin Tax in Canada

[CmpEng]

Since so many people ask about the tax issues around bitcoins thought I would share my experience with bitcoin profits and taxes in Canada. Basically I purchase equipment to build a dedicated bitcoin machine, total cost around $900 mostly for graphics cards. In all I made about 600 bitcoins over three months and was on average able to cash them out for about $10 per bitcoin shortly after the crash of the price from $30 on the way down to $5. As a Canadian during the $30 spike, the ability to liquidate fast enough to take advantage of those prices while limited due to the risk I was willing to take about putting my bitcoin in different online exchange accounts. In all I gross about $6k and come tax time spoke with my accountant and was able to claim it as business income. That means I was able to write off a portion of space in my house (limited by local by-laws), mortgage payments, power, utilities, etc... as well as write off portions of the $900 PC purchase each year as capital investment. After all was said in done on the $6k I took in, I ended up having to pay back $1.5k for a net of $4.5k plus a still have a great new PC. For the three months I toyed with Bitcoin it was certainly worth it.

No Taxes? Huh?

[Ritchie70]

I see a lot of posts saying that "bitcoin transactions aren't taxed" and "no payroll taxes if you're paid in bitcoin."

Huh?

If I'm working in the US but my employer pays me in GBP, they should still be sending an appropriate amount for FICA, Medicare, and withholding to Washington, and I should be declaring the income on my 1040. A different currency doesn't make it tax free.

Does Bitcoin make it easier to evade taxes? Sure, maybe it does. Doesn't make it legal.

Re:I pay employees partly in high quality scrap st

[Ritchie70]

Wow. You are a total asshole.

If they can get enough money at the scrap yard for it to matter to their life, you are wasting their time by not taking the scrap yourself and giving them money.

Only the working poor would put up with this shit. Do you think poor people have nothing better to do with their time? With their gasoline than drive to the scrap yard?

Sell the scrap yourself and give them a raise. Maybe even pay them a living wage so they don't have to fuck around trying to make ends meet.

And I say again, ASSHOLE.

Bitcoin ATM

[bill_mcgonigle]

I just happen to be sitting waiting for a bitcoin talk to start at Liberty Forum and I just walked past a bitcoin ATM and my next stop is a company that is making them usable for purchase at 7-11 and Walgreens. Interesting times.

J.P. Morgan

[NewYork]

"Gold is money, everything else is credit" --J.P. Morgan