Slashdot Mirror
US States Edge Toward Cryptocoin Regulation
SonicSpike points out an article from the Pew Charitable Trusts' Research & Analysis department on the legislation and regulation schemes emerging in at least a few states in reaction to the increasing use of digital currencies like Bitcoin. A working group called the Conference of State Bank Supervisors’ Emerging Payments Task Force has been surveying the current landscape of state rules and approaches to digital currencies, a topic on which state laws are typically silent.
In April, the task force presented a model consumer guidance to help states provide consumers with information about digital currencies. A number of states, including California, Massachusetts and Texas, have issued warnings to consumers that virtual currencies are not subject to “traditional regulation or monetary policy,” including insurance, bonding and other security measures, and that values can fluctuate dramatically. ...
The article focuses on the high-population, big-economy states of New York, California and Texas, with a touch of Kansas -- but other states are sure to follow. Whether you live in the U.S. or not, are there government regulations that you think would actually make sense for digital currencies?
Crytocoins are designed to be de-centralized in order to not be controlled by any dominant party
I wonder how are they going to "regulate" something that is not supposed to be regulate-able ?
Muchas Gracias, Señor Edward Snowden !
What about my right to open a cryptocurrency bank without any licensing or regulation?
If this big government overreach continues I may have to abruptly close my bank, taking everyone's bitcoin with me before I reach goal.
The fact we need people to share their skills safely, train users, and businesses how to use crypto-currencies properly, and also ensure that those who create 'new' altcoins - are held accountable for the currencies they create, and to the people who bought into them.
It's not enough to print monopoly money - we have to build businesses first so it's worth trading for a REAL good or service.
Are there government regulations that you think would actually make sense for **anything**?
No.
perhaps they will require a licence to accept payments using them?
Insurance and other "protections" are available through other forms of payment. Digital currency is valued at whatever two parties agree it to be. Standard reporting to the IRS on total amount received, total world-wide holdings and accumulated gains should be applicable.
The entire point of crypto-currency is to not have centralization or regulation. Many users know the risk going in, and some ignorantly do not. I've liked the idea of having trustworthy people contributing ideas towards the improvement of each respective currency, but any government related establishment is not one of them. The devs have done a good job over at Dogecoin making some improvements with each new wallet build.
The big hurdle right now is accessibility and getting more merchants involved so conversion to fiat isn't necessary.
In other words with cryptocurrency the government cannot print new notes to devalue your savings. You have been warned!
The key phrase is about what makes sense.
To a legislator bought by the banking and payday loan industries, there will be a sense of panic to at least be _seen_ to be doing _something_; so that will make sense.
To an ambitious prosecutor, there will appear an opportunity to bring the full weight of the criminal 'justice' system down on some poor schmuck who orders something legal-but-distasteful using MathMoney without paying sales tax or submitting the forms no one can figure out how to order let alone fill out (NJ handgun laws), so that will make sense.
In short, jumping up and down, waving flags and flares, daring regulators to come after you pretty much guarantees the most draconian possible response (designer recreational drugs) because 'think of the children!'
You're looking for quotes? See my journal.
By treating it like currency and passing laws about what you can do it?
They make not be able to regulate the entire currency, but they can certainly pass laws regarding their own people and what they are required to do.
Did anybody really think that you could simply say you have a form of currency which isn't regulated and expect governments to just say "well, they've beaten us"?
That would be a neat trick.
Lost at C:>. Found at C.
The laws should be identical to the extent possible, between different forms of currency.
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
I imagine that the sorts of things we'd want to regulate about "digital currencies" are the same things we'd want to regulate about any foreign or domestic currency; e.g.:
- You can't use it to pay for illegal goods or services
- You can't receive it in payment for illegal goods or services
- You can't use it to hide other transactions related to illegal goods or services (i.e., money laundering)
So... can we just formally decree that cryptocoins meet the definition of a "currency", and be done with it? Otherwise I'm afraid that we'll be creating another legal (and patent) swamp where "...with Bitcoins" will become the new "...on the Internet".
Koans and fables for the software engineer
Suppose consumption tax are going to be charged the way it does to Bitcoin transactions. With the eventual deflation of the currency, wouldn't that make the state cash reserve infinitely richer, relative to private persons?
Yeah, the fine folks on Silk Road would never be involved in money laundering, drug trade, or funding violence....
Crytocoins are designed to be de-centralized in order to not be controlled by any dominant party
I wonder how are they going to "regulate" something that is not supposed to be regulate-able ?
These guys advise governments on how to regulate cryptos: http://razorcoin.com
The value of the coin is to be able to purchase something. That is where they will regulate it with the stores taking it as payment ( ones taking payment legally ). For crypto currancy to really get traction more stores need to accept it.. so either way you look at it there will be some regulation.
Doesn't matter to them whether anybody else is helped with it: It's all about their own job security. In that light the whole AML/KYC BS is a stroke of genius. Some money presumably stinks and of course you need state officials to "protect" people from that stink, and therefore from the ability to decide what to do with their own money. Brilliant, no?
The IRS won't regulate it as a currency for a very good reason - doing so would mean they'd have to tax income from Bitcoin the same way they have to tax cash income. With cash income, there's a paper trail - the IRS can look at pay stubs from your employer and look at bank statements to determine whether or not you are paying enough in taxes.
Bitcoin is different. There's no paper trail, at least not one with names and social security numbers attached to it. They'd have a hard time proving anything in terms of how many bitcoins a person has made in a year or where the bitcoins are coming from. As long as the bitcoin remains in the system (ie; isn't exchanged for money, which the IRS can trace) there's really no way for them to do anything about it.
Does that mean we can start paying taxes in Bitcoin now?
Anything can be regulated. Control is a separate issue.
If Slashdot were chemistry it would look like this:Cadaverine
Crytocoins are designed to be de-centralized in order to not be controlled by any dominant party
I wonder how are they going to "regulate" something that is not supposed to be regulate-able ?
The NSA owns your computer, and the computer you want to trade bitcoins with*. They could enforce any regulations if they were willing to admit to this. Being a cryptocurrency rather than a physical one also means that they can vanish your money with the click of a button instead of having to personally visit you.
* Maybe I'm just paranoid, but there are so many hardware and software components, any of which could have backdoors or keyloggers installed. They could demand any domestic product secretly contain them from manufacture, and "inspect" any imports. Even easier with domestic software, or they could get a few of their agents helping to develop the software (I hear they have lots of talented folks).
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
right, because thats the ONLY thing bitcoin is used for....
have you seen my sig? there are many others like it but none that are the same
So, tell me again, how is this different from most money these days?
Anything you have on deposit is pretty much just electrons. The vast majority of 'real' money is pretty much just as virtual these days.
Lost at C:>. Found at C.
Bitcoin is different. There's no paper trail, at least not one with names and social security numbers attached to it.
True, but the blockchain contains all transactions. Sure, it all maps to wallet addresses, but a state could simply legislate that all wallet addresses must be declared. Enforcement might be tougher, but the requirement could be made.
Does it really qualify as a currency yet? I don't know. How do we define what makes a currency?
And don't misunderstand me. I'm not trying to claim that bitcoins aren't worth anything. But Garbage Pail Kids trading cards are probably still worth something. There may be someone in the world who would accept them as payment for goods and services. Does that make them a currency?
Does a currency need to be backed by some kind of country? Is there an expectation of stability of price? Do you need an area of economic activity where the currency is ubiquitously accepted as a form of payment? Maybe you know the answers to these questions. I don't. There are probably a lot of people in Congress who don't.
- You can't use it to pay for illegal goods or services - You can't receive it in payment for illegal goods or services - You can't use it to hide other transactions related to illegal goods or services (i.e., money laundering)
You are missing the point, you list a bunch of stuff that is already illegal. Why do we need additional regulation for this currency, when it is already established that the said activities are already prohibited with regular, cold cash? And what is the point of passing laws governing this currency, when you cannot realistically enforce them? Are you just hoping to pile on extra penalties when I order a hit on someone, and pay for it using digital currency? How will that make the world a better or safer place?
HA! I just wasted some of your bandwidth with a frivolous sig!
Over half the Bitcoin exchanges have gone bust. Entire Bitcoin "stock exchanges" disappeared with the money. Bitcoin "investments" promising substantial returns each month were, of course, Ponzi schemes.
Bitcoin is a scam magnet. Irrevocable, remote, anonymous money transfers are the scammer's dream. (Yes, there are people talking about cryptographic escrow schemes so you can buy something with Bitcoins and have some recourse if it doesn't show up. So far, that hasn't reached usability.)
That's why Bitcoin needs regulation. If you're going to hold other people's money, you have to be regulated. Deal with it.
Money has been virtual a lot longer than that. Even cash is virtual: The physical tokens are just representative of something more abstract. The last time money was physical was when it was on the gold standard - and even then very few people actually took up the promise backing it and swapped their notes for gold.
No they aren't. There's nothing stopping a single entity mining all of the damned coins, or even a majority of them. It's simply a question of how many tflops you've got (with Bitcoin). So just how "de-centralised" is it in the first place?
You're assuming the company is not a DAO.
The irony is, in designing a de-centralized currency, I was thinking of the children.
It's a currency designed to be difficult to regulate. Of course the first adoptors are going to be those to whome conventional finance is unavailable. Those on the fringes of the law, or in outright violation of it. Not just drugs and violence though - The Pirate Bay accepts bitcoin donations, and there are a number of internet gambling sites accepting payment in it to draw the business of those living in states where internet gambling is prohibited.
People don't just adopt a new techology, much less a new finance paradigm, without a good reason. The big hope of the bitcoin community is that the paranoids and outcasts may be the first to adopt, but they will then form the core around which a new legitimate economy can cluster. That does seem to be happening, as an increasing number of legitimate companies start accepting bitcoin as a promotional measure. It gets them press coverage.
I wonder how are they going to "regulate" something that is not supposed to be regulate-able?
Simple - They will effectively exclude businesses in their own states from participating in the BitCoin economy.
This won't affect the vast majority of individuals, because they can't stop individuals from buying from vendors in another state; and it won't affect businesses in unregulated states - Well, I take that back - It will benefit businesses operating outside those states that try to regulate cryptocurrencies.
I fully expect, however, that this will end up at the USSC. As much as the asshats in DC have abused the "interstate commerce" clause, this issue actually falls under that particular umbrella.
Enforcement would be very difficult. A forensic accountant could pierce the trail together given enough time, yes - but the cost of paying someone to spend days going through the blockchain and trying to prove each of these addresses belongs to a certain individual would be far greater than the cost of subpoenaing a suspect's bank account and getting instant proof of illicit income. The higher the cost of enforcement, the fewer cases the government can bring, and the less risky the crime becomes - potentially reaching the level of copyright infringement, where tens of millions completly ignore the law because they know their chance of getting caught is miniscule.
Uh, you do realise all those things you mention about cash having a paper trail has nothing inherently to do with the cash and everything to do with the regulations surrounding the financial system - they would all equally apply to bitcoins the moment the government says so. If your employer pays you in bitcoins, that would appear on your payslips, and your bitcoin exchange transactions would be subject to scrutiny just as bank account transactions are...
I still don't accept BitCoin as a payment, for anything.
You want my goods or services, gimme US dollars.
And I don't accept PayPal either because has the nerve to ask me for a my bank account number to confirm who I am--I don't think so. I gave them a credit card, it cleared, and every time I use a credit card that has to be authorized as well. That's all the verification they need.
Actually, I think you mean, "with employer-declared or bank-mediated income, there's a paper trail." If I pay someone in small green pieces of paper to mow my lawn, and they keep it under their mattress until they need it, then there's no paper trail at all.
Koans and fables for the software engineer
Does it really qualify as a currency yet? I don't know. How do we define what makes a currency?
That's been the debate about Bitcoin all along. The best answer is probably this: http://en.wikipedia.org/wiki/I...
Koans and fables for the software engineer
Because essentially all of that virtual money sitting in the banking system (unless you're exceedingly rich) has been very well insurred against losses, and has decades of technology and policies to help reduce 'people losing their entire life savings' or 'banks losing all their depositor's cash and now they're going belly up'. Bitcoin has literally no protections for prevention of all your value.
So if you lose your crypto key (dropped $1mil on the ground on the way to grandma's house - one reason BitCoin can't be equated to real cash) or if your bit coin repository gets robbed (akin to bank robbery but without the gov insurance), or the owners steal all your money (gov insured for certain levels), or the bank simply goes bust due to insolvancy (gov insured for certain levels) you have completely different levels of assurance that your wealth is 'safe'. If you deposit $1mil into the bank of fly-by-night, you only have so much protection for the ' being stupid with money' lever, but for people of more modest means where their money is essential to their livelihood, protections are in place to support them.
Bye!
Ah, just like the laws to regulate what I can and can't buy.
So I guess I'll just be violating 2 laws instead of 1 on the Silk Road.
The IRS has ZERO jurisdiction over digital "currency."
They don't get to tax me on WoW gold or any other currency that is made out of thin air, aka, bits. BitCoin is no different. Just because something is popular doesn't mean they have authority.
Cryptocurency is not magically exempt from regulation simply because people hope it is. How does one regulate anything? You make rules, when people are caught breaking the rules they get in trouble.
People focus too much on the idea of dragnets or detection, of technological solutions, and that that if there is no technology that can automatically scour something it somehow makes it unregulatable. Such currencies make automated tracking difficult, but people are still people and businesses are still businesses, and the ease of hiding things does not change this.
I certainly hope not, because ultimately they're completely unlike other foreign or domestic currencies in that they have nothing backing their worth*. They're much more like coupons, casino tokens, or tasting tokens at a beer festival than real money. They're a medium of exchange not a store of value. The flaw in the logic behind cryptocurrencies is that their inventors and proponents fail to recognize this.
* Generally the economy of the issuing country.
Of course it can be taxed. The IRS does not troll through your bank accounts and purchases to produce a list of what you owe, they pretty much use an honor system of self reporting where people tell them how much they made and how much they owe. One can hide their assets with BTC, but one can do that with USD too, but one still gets in trouble if they get audited. In the case of taxes, BTC or USD makes no difference in terms of 'can it be taxed', only how it is taxed.
You are thinking criminals, not outcasts. For the people who are actually outside the financial system by situation BTC does not help them. It is a great toy for middle class technically inclined people who have the resources to maintain both BTC and local currency, people who can access banks but then make the lifestyle choice not to, but it is too unstable, too limited, and too expensive for actual outcasts and outsiders to find utility in.
Um, yes, they do. If you do work, and get paid for it, whether in US$, Japanese Yen, gold ingots, BitCoin, WoW gold, Tickle-Me-Elmos, or whatever, that's income, and it's taxable.
Looking at the 'paper trail' is not automated, it involves a human sitting down and examining an individual or business. It is a little harder to audit BTC, but no harder then companies that work primarily in cash which are taxed just like anything else.
with any currency - i discovered dogecoin here :)
http://www.ultimatexbmc.com/
which led me to here
https://btc-e.com/exchange/ltc_usd
which led me to slashdot
which led me to thinking - I need to know more about virtual currencies
Good idea if you ask me - but poor execution, just my 2 cents.
Though keep in mind, part of the burden of the audit is on the individual or business the IRS is looking at. They do not need to trace everything, but one does need to be able to account for the things they claim on their income tax form. One can hide a certain amount as part of disposable income, but if one can not make things like rent or utilities without utilizing the additional income then the IRS can say 'show us how you are paying for your lifestyle'.
Nonono! You are thinking about the wrong children. In politics the only children that matter are the ones of the oligarchy. BitCoin would make other children middle class and independent of the ruling class' iron grip on their money.
Actually, many marijuana dispensaries, fireworks businesses, gun businesses, casino owners, etc. can all be legal businesses that banks will close your account immediately if they find out what you are doing. Bitcoin could be very helpful for these types of accounts.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
That is a good point. Adult businesses face a similar problem when it comes to payment processors.
Over half the Bitcoin exchanges have gone bust. Entire Bitcoin "stock exchanges" disappeared with the money. Bitcoin "investments" promising substantial returns each month were, of course, Ponzi schemes.
Bitcoin is a scam magnet. Irrevocable, remote, anonymous money transfers are the scammer's dream. (Yes, there are people talking about cryptographic escrow schemes so you can buy something with Bitcoins and have some recourse if it doesn't show up. So far, that hasn't reached usability.)
That's why Bitcoin needs regulation. If you're going to hold other people's money, you have to be regulated. Deal with it.
Up until recently, when someone like you would support laws like these and say "deal with it" it would make me very angry, like you're just dismissing me because your beliefs are more popular.
Today, I'm overjoyed to hear "deal with it". It reminds me of the time I dealt with your corporate bailouts by investing in something bailout-proof, and makes me wonder what might happen next. Just don't be upset when you aren't a part of the deal.
The IRS has ZERO jurisdiction over digital "currency."
Yeah? Well the IRS disagrees with you.
And the politically undesireable - Wikileaks had trouble with payment processors too.
Last year I tried to pay my taxes on my WoW gold, but the IRS characters were on another server.
Get free satoshi (Bitcoin) and Dogecoins
Please zone out of the geek worldview realm. Currencies reflect power and on this planet very much so ruling power, not a technical high school challenge.
Let me illustrate:
Possible:
- when you do not upload to the proper authorities your money-transaction monthly/yearly log, generated by approved software,
- help create/redistribute/modify/sell/gift/etc software that transacts digital currency without proper auditing exports to predefined regulatory bodies,
- when you (and the regulatory bodies) read that email that your delivery arrived at your doorstep with your name on it, but the account you paid with isn't registered on your name/address.
-etc
You don't me to even start start on the things that will be technically possible very soon. Yes, bitcoin and the bunch are cute toys so far. I get it. But you can bet on US government regulating the hell out of it because random major retailers are starting to support it. Just in case digital currencies go from a passing though of the regular population sample, to something average people consider paying Christmas gifts with.
The future can go either way: at best, it will be your convenience, at worst, it will be their excuse.
The fact that it is decentralized means that it can neither be regulated nor banned. I'd rather our politicians did something useful for once but a useful politician is kind of an oxymoron.
Gold notes were just as virtual as anything else. Physical gold coins, or barter for consumables, is the only way to avoid virtuality, and there were many practical reasons we went away from that. Nothing, of course, will prevent a government from debasing a currency - it's what they do, it's all they do.
Socialism: a lie told by totalitarians and believed by fools.
where is the Mod troll-categorization for 'Govt Shill'? jeez. if you're gonna spew cowardly lies, at least you can be polite about it.
perhaps they will require a licence to accept payments using them?
Regulations? Licenses? Hmm. As it happens, we already have pertinent "regulations".
U.S. Constitution, Article 1, Section 10:
"No State shall ... make anything but gold and silver Coin a Tender in Payment of Debts"
This is always the crux of the Great Bitcoin Debate. What counts as backing the worth of something?
A non-trivial amount of Bitcoins are "owned" by somewhere roughly between 500,000 and 1,200,000 people, depending on how you calculate the number (https://bitscan.com/bitnews/item/how-many-people-really-own-bitcoins-and-why-does-it-matter). They come from numerous countries across the globe. Any one of those countries could collapse, and in theory the BTC holders would remain solvent -- this is touted by the BTC community as one of its big pluses.
In contrast, let's look at some countries with their own currencies, which all have fewer "users" than BTC:
Tuvalu (http://en.wikipedia.org/wiki/Tuvalu):
- Population ~11,000.
- Native currency: Tuvaluan_dollar (http://en.wikipedia.org/wiki/Tuvaluan_dollar).
- GDP: ~37 million USD.
Barbados (http://en.wikipedia.org/wiki/Barbados)
- Population: ~278,000
- Native currency: Barbadian dollar (http://en.wikipedia.org/wiki/Barbadian_dollar)
- GDP: ~7 billion USD.
Maldives (http://en.wikipedia.org/wiki/Maldives):
- Population ~394,000.
- Native currency: Maldivian rufiyaa (http://en.wikipedia.org/wiki/Maldivian_rufiyaa)
- GDP: ~2.2 billion USD
I don't know how stable the Tuvaluan, Barbadian, and Maldivian economies are, but I'm pretty sure that the combined military might of these countries is no match for the military might of the countries whose citizens hold the majority of BTC's current equivalent of 7.7 billion USD.
(I don't own Bitcoins, BTW... I just think it's fun to watch this stuff unfold.)
Koans and fables for the software engineer
No need to worry about interstate commerce, this is flatly under the money and values clause. Congress doesn't even need to try hard on it.
Because there is no "-1 I disagree" mod. That's what your words are for.
Fireworks businesses, gun businesses, casino owners are all legal business – mind you heavily regulated.
Marijuana is illegal under federal laws even if it legal under state. A bank dealing with a marijuana dispensary runs the risk of violating laws on money laundering, which can be very bad for banks. So banks simply won't deal with them.
A place to start: http://www.npr.org/blogs/money...
Don't do business via PayPal--use a real bank. And in the rare cases where you are stuck with PayPal never give PayPal your bank number and always use a real credit card.
How do we define what makes a currency?
Money is generally defined as
Medium of exchange
Store of value
Unit of account
Anything that can be used as money is money. As such, money is flexible. If you think tulips, receipts (bank drafts, post-dated checks, warehouse receipts, tobacco , tulips, Dot Com stocks, cows, garbage pail kids, are money , it is. If you change your mind it does away. Currency tends to be "harder" – harder to create and destroy and tend to be tightly controled by a central bank. Read up on Money Supply and the difference between M0, M1, M2, etc. The further you go out the less something is like currency.
Does a currency need to be backed by some kind of country?
Technically no. Private currency has a long and rich history. However, since 1880 it has be on the decline. I can't think of any major currencies that are not backed by a government today.
Is there an expectation of stability of price?
Yes, but you don't always get what you want. Money (and thus currency) is supposed to be a low risk / low reward asset. Currency has low risk (see inflation) and has either 0% reward or more commonly a negative rate of return. (if not from inflation, then convince charges to hold and transfer funds. A advantage of BitCoin is that they will reduce the charges.) See countries with high inflation rates. Venezuela is my current favorite example. Argentina comes in a close second. FYI, the human brain from an organic aspect can handle inflation better than deflation.
Do you need an area of economic activity where the currency is ubiquitously accepted as a form of payment?
Mostly yes. It must be a unit exchange, barter, ability to pay taxes and loans, etc. If not it tends to gimp the money, leading to inefficiencies, eroding its value. For examples, you can look at some communist countries that have issued dual currency, one that is convertible into foreign currencies and one that is not. Food stamps that can only be used to buy food and the resulting black market in baby formula.
if it looks, acts, and tastes like digital gold, why not?
You need to strike the first two since they are both pegged currencies, Tuvalu to the Australian dollar and Barbados to the US dollar. That is, their value is derived from the underlying currencies.
And what makes a currency a currency is not how many people hold them or the might of the military. What really matters is I can live my daily life using that currency. Can I buy a loaf of bread or pay my rent? When I do any mental accounting, to I think in BitCoins, dollars, or cigarettes?
"No State nor government shall regulate digital currencies utilizing the 'block-chain' method, e.g., Bitcoin."
And they can go fuck themselves. I already pay 5 digit taxes, as in, between $10,000 and $99,999 inclusive.
And when you are done with that, look up "hobby income" on the IRS website.After all we need to distinguish between the casual WoW player and the professional gold miner.
If you are a US citizen, and you have income as defined by the IRS, they have jurisdiction.
The IRS contract is NULL and VOID via Blizzard's Terms and Services which _directly_ states you do NOT have ownership. If you don't have ownership then neither does the IRS.
http://us.blizzard.com/en-us/c...
-- /. lameness filter is lame."
"The
And just in case there was any confusion, Clause 8 specifically also spells it out in plain English:
shoot them in the head. Problem solved.
No it's not, because it's no more something that can be debated than whether or not the sun rises in the East in the morning. You can't debate facts.
The rest of your post is just more of the same - smoke and irrelevant mirrors.
I certainly hope not, because ultimately they're completely unlike other foreign or domestic currencies in that they have nothing backing their worth*.
Ask yourself what backs the value of UPS shipping labels, that people are willing to give substantial sums to obtain one? Intrinsically the label is just sticky paper with some printing on it. The answer is the UPS network of trucks and distribution terminals. They enable a package with a label on it to get from one place to another.
In a similar way, the Bitcoin network of p2p nodes, mining hardware, desktop apps, merchants accepting it, and user wallets enable moving money from one place to another. A bitcoin address with a non-zero balance is like a prepaid shipping label, ready to be used to transfer value to another address. But without the network, the transfers would be nearly impossible. The network makes bitcoin balances useful, and therefore have value.
In a money transfer system, the internal units don't have to have any particular value, as long as everyone agrees on their value at a given time. If I want to pay a Romanian programmer and buy X dollars worth of bitcoins, transmit them, and the programmer converts them to Leu locally, the value only needs to be stable during the time the transfer takes to be acceptable. The particular number of bitcoin units in between is immaterial, it is just an accounting unit.
People who hold bitcoin units for longer periods are speculating that demand for them will go up, or at least remain level. Since the number of units is relatively fixed (it is increasing at 11%/year currently, and will taper off to zero over time), demand will drive the exchange rate up or remain level. If you live in a country that is rapidly increasing the money supply, like Venezuela or the United States, a stable supply of an alternative good can be attractive. That store of value function is separate from the value transfer function.
The IRS contract is NULL and VOID via Blizzard's Terms and Services which _directly_ states you do NOT have ownership. If you don't have ownership then neither does the IRS
What is this "IRS contract" you speak of?
"Null and void"...are you saying a TOS supersedes IRS authority?
Finally, did you miss your meds today?
I'm not sure what anything I wrote has to do with Blizzard, but it's pretty clear to me you've got a problem with the IRS. : )
Most stores "taking" cryptocurrency are not actually taking it. Their payment processor is taking the crypto payment and converting it for the store.
Similar to someone who sells on ebay and takes paypal. You can pay with a credit card, but the seller is not taking a credit card payment. The seller is not bound by any of the credit card regulations, instead the payment processor (paypal) is bound by them, and the seller is bound by paypal's user agreement.
No states are "making" anything at all. Not really applicable.
The IRS doesn't regulate currency. The Treasury does.
Err, I means Secrect Service.
In other words, Bitcoin is precisely what I said - a medium of exchange, a coupon, a token, not a currency.
So? Having value [being useful] does not equate to having value [monetary worth]. They're two different things, though I can see why BTC fanboys would like to obscure the existence of that distinction - because it's existence demolishes their entire theory.
As to the balance of your reply, it's just more of the same... handwaving, smokescreens, and you using words that don't mean what you think they do.
A cross the board ban on ponzi currency, start easy, enriching the early starters and gets way harder, impoverishing the late comers, who do all the selling, trying to create the illusion of value, desperate to recover their investment in mining machines.
Chaos - everything, everywhere, everywhen
Regulate exchanges. You can do whatever you want with your cryptocurrency, but it's not worth the electricty needed to keep it alive until you can exchange it for hard currency. For example, most of the "we accept bitcoin" companies do not handle bit coin at all. Instead they simply outsource the payment to an exchange which delivers hard currency to the company at certain exchange rate when customer pays in bitcoins.
Exchanges need to interface with standard payment systems. As a result, they are vulnerable to government intervention.
A thousand times. NO! Bitcoin is unregulatable. That is its genius. Any government that tries to regulate it will look both stupid and hubristic.
The IPCC has purposely engineered a massive scientific fraud.
As long as you keep your private key secure no one can take your Bitcoins. You can generate your private key on a non-networked computer and write it down, then transfer your coins to the public address.
Assuming you trust your printer, Mycelium is working on a USB plug to make paper wallets.
it is an "after-the-fact" type of situation. you are investigated for X, "oh, you have a bitcoin wallet I see, let's see what transactions you've done, have you filed the right paperwork for all this stuff? no?"
Sleep your way to a whiter smile...date a dentist!
I don't follow your logic. Nothing backs gold. Does that mean it's not a store of value?
Bitcoin has nothing to do with holding other people's money. If holding other people's money requires regulation, that requirement should be independent of what form the money takes -- bitcoins, gold, dollars, whatever.
Not even wrong.
[FUCK BETA]
Yes, but then when you get audited and they ask "and how did you pay for your five-bed condo in NYC?" you'd better have an answer that will stand up...
[FUCK BETA]
New York is looking at requiring 100% + holding of any deposits made to a company that holds the crypto currency, like an exchange. The wording they used is amusing : "As capital protection, these companies would have to hold the same amount of virtual currency as they owed to their customers. But unlike banks, which are also subject to capital requirements, these companies would be allowed to hold some of it in virtual currency. "
I like how at first pass it sounds like banks hold 100% also
A wizard did it.
Koans and fables for the software engineer
Oh, I'm sorry... I wouldn't have wasted all that time citing actual numbers if I'd realized that I was talking to the sole authority of facts related to economics! :-)
Koans and fables for the software engineer
Sure, agreed. But every time someone comes up with a "Bitcoin can't buy X" argument, someone else posts an article like this -- which was updated today:
http://www.coindesk.com/inform...
Again, I don't own or use Bitcoin or any other cryptocurrency, but I do appreciate the technology, and how its adoption has spread . And there are a lot of people who seem to be rooting for it to fail, although I can't quite understand why. Jealously at not being one of the early adopters? Fear of the unknown?
Koans and fables for the software engineer
No, I'm not the sole authority of facts relating to economics. I'm just not impressed by "actual numbers" when they're irrelevant to the discussion at hand and accompanied by smoke and mirrors.
And if you actually had a clue rather than parroting BS in the fashion of a cargo cultist, you'd note I never debated the validity of your facts - only their relevance. When confronted with this, you fall back on the typical defense of the terminally clueless... you raise the white flag and declare victory by indulging in personal attacks.
Here is an analogy. I don't consider Klingon, Esperanto, or Latin to be real, living languages. They fill all of the requirements of being a language but people can't live their daily lives using these language and they don't think in these languages. Books may be translated into these languages, but few books are written in these languages. Native speakers are rare. Latin may be an edge case.
Yes, you can do a lot of things with BitCoins. But form the posts that I see on Slashdot, these retailors are immediately converting the BitCoins to the local currency. That suggests to me that the BitCoin economy is a mile wide and an inch deep.
As for BitCoin, I am not rooting it to fail but I think it will. From a technically aspect, it has many virtues as a currency. However, anything that acts like money is money. In good times, many things can act like money but in bad times the amount of money can contract rapidly. Hence monetary policy. BitCoins lacks that flexibly. I personally feel there is going to be a crisis and the whole thing will collapse. Now, on the flip side, hard money types will tell you this inflexibility is a virtue.
I would guess that one reasons that retailers are converting BTC to local currency immediately is that it is insanely volatile right now, so holding BTC comes with risk. If the value becomes more quiescent (say, on a par with the USD), and if the retailers can purchase their supplies from other retailers who also accept BTC, then direct re-spending of BTC would rise without the vendor going through an exchange first. Which would be ideal, since any exchange is going to skim a little off the top.
See, I also think cryptocurrencies in their present form have a good chance of failing, but for very different reasons:
1. The blockchain doesn't appear to scale well. It takes a long time to verify transactions, and we're hardly stressing BTC to reasonable levels. 1.2 million users is paltry compared to the population of the world. One would ideally need something like a BTC credit card, where actual transactions are mediated by insured banks that act as buffers, providing the illusion of "instantaneous" and "reversible" transactions for a fee that might be paid for by either card holders or merchants. The bank would then take on the risk of a transaction subsequently failing to verify, using typical means to go after the offending party to get the funds back.
2. It all goes south when the power's out. If there's a widespread blackout or communications outage, I can't use my BTC. I can use the bills in my wallet, or even trade the physical goods/services I have for the ones I need. Of course, you might say that credit/debit cards have the same problem, and increasingly that's what we use for daily purchases. If the computing infrastructure of the world were to collapse, I'd say we'd have bigger problems to deal with -- but I still like the idea of coins and paper money as a backup for temporary outages.
3. Properly securing a wallet is hard, and using a compromised wallet is easy. Have you seen what people do to print a secure paper wallet? Disconnecting the printer from the internet, etc.? Average Joes and Janes won't do it. And then access to that single number gives a thief access to however much money you've got in the wallet. Since some folks are storing tens of thousands of USD in wallets, thieves are highly motivated. Money has to be simple to use.
But all this is tangential to the original discussion: do we need special regulation of cryptocurrencies? To which I say, no. Like it or not, they're being widely used as currencies, moreso than the native currencies of certain island nations, so we might as well treat them as such. Now, they may be a bad implementation of a currency, but that's another topic entirely.
Koans and fables for the software engineer
I think it's even worse than that. They have near infinite computing an intellectual power. The network seems insecure to the most viable threat, which is organized banking and government. They have the resources to attack and dominate the network, it's just not worth breaking or exploiting yet.
X
Meaning that no state can make Bitcoin or other such currency legal tender, meaning that (barring Federal action) no state can accept payment in Bitcoin or require any payment to be in Bitcoin. That doesn't mean cryptocurrencies can't be used in the state by private parties.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Pieces of paper aren't virtual currency, they're real currency. They're representations of an abstraction (like gold coins are), but they physically exist. The green pieces of paper in my wallet are US dollars no matter what data connections exist where I go.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
They don't have to exclude businesses from taking it, and it wouldn't work anyway. Businesses that take Bitcoins now do it through an exchange, and that's just another way to get money to a business.
They may put regulations on exchanges, which are financial institutions, and as such subject to regulation. (IIRC, there's already been a case of a Bitcoin exchange being investigated for money laundering, so that's nothing new.) They may publish information on the status of cryptocurrencies for their citizens. They will require income in Bitcoins be recorded with its dollar value for purpose of taxation (basically income, sales, and use taxes).
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
The money in your bank account also continues to exist regardless of data connections where you go. And your ability to spend a given physical currency vary depending on where you go - dollars are special, but e.g. a rupee note isn't going to spend well in the US.
Specie-based currency has at least some value everywhere, but these days it's easier in most of the world to find a data connection than someone who trades in gold (plus a whole host of other problems).
Socialism: a lie told by totalitarians and believed by fools.
As I pointed out I already pay my fair share.
What I have a problem with is allowing the IRS to over-step their idiotic jurisdiction.
If you can show the Blizzard server where I can pay the IRS my WoW gold then I'll pay the "income" I've "earned." Oh wait, they don't have one .. because Blizzard owns ALL their "virtual currency", aka WoW gold.
Likewise for other digital currency -- the IRS can make all the claims they want, but that doesn't make it true. They don't "own" BitCoin, NOR the bits used to represent the currency.
17 trillions in debt and the IRS has done fuck all to help the country get out of debt. If the IRS wasn't so greedy then maybe I'd actually respect them in spite of paying my taxes. But most Americans are too stupid and a bunch of pussies to do anything. They would rather watch their unreality shows such as "Big Brother" then give a dam.
So yea, I have a problem with illegal government over-stepping their pseudo jurisdiction such as the Federal Reserve, which is neither Federal, nor a Reserve.