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Is Bitcoin Legal? Illegal? a Currency? a Commodity?
Townhall.com ^ | March 9, 2014 | Mike Shedlock

Posted on 03/09/2014 7:58:39 AM PDT by Kaslin

Regulators in various countries are grappling with bitcoin. What the hell is it? It's a good question and answers vary widely.

(Excerpt) Read more at finance.townhall.com ...


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS:

1 posted on 03/09/2014 7:58:39 AM PDT by Kaslin
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To: Kaslin

I suppose an alternate currency could work but I know little about BitCoin. What/who back’s it up?


2 posted on 03/09/2014 8:00:22 AM PDT by FAA
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To: Kaslin

It’s mainly a way to launder money and buy illegal stuff.
It’s enterprise free from government, willing sellers and willing buyers.
That’s why I like it, even if a few bitcoins get lost now and then.


3 posted on 03/09/2014 8:11:24 AM PDT by UnbelievingScumOnTheOtherSide (HELL, NO! BE UNGOVERNABLE!)
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To: Kaslin

It’s idiotic. It is no more than cyber-space barter which is not sustainable in the long run and not at all among large groups of people. Therefore, it will primarily be used to launder money and purchase in the black market.

A currancy with no government backing is no currency at all.


4 posted on 03/09/2014 8:13:54 AM PDT by RIghtwardHo
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To: Kaslin

When I was a kid, we’d go to the fairs or the ballgames. Almost always, there would be various vendors there who would be advertising, many times having the kids try games,etc for prizes.

Lots of times, the prizes were wooden nickels.

You could use the wooden nickels to buy stuff - but it was totally at the whim of the vendor.

I guess if I were to try to describe what exactly a wooden nickel is, I would have to say it’s none of the above.

It is a token.


5 posted on 03/09/2014 8:18:54 AM PDT by djf (OK. Well, now, lemme try to make this clear: If you LIKE your lasagna, you can KEEP your lasagna!)
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To: Kaslin

And most of the time, the task assigned was collecting the bottles. Beer bottles, coke bottles, pretty much anything of scrap value.

Me and my brother, we hauled in a boatload of bottles!


6 posted on 03/09/2014 8:21:25 AM PDT by djf (OK. Well, now, lemme try to make this clear: If you LIKE your lasagna, you can KEEP your lasagna!)
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To: Kaslin

Bitcoin is nothing.

Running a sophisticated program does not create money.
It is impossible to mine electrons.

It is not money. It is not currency.

The fact that you spent some real money to pretend-acquire some bitcoins does not make them real money.

An entry in an electronic ledger does not necessarily reflect reality.

Wishing for an alternative to the dollar does not make one magically appear.

Wishing for a way to escape taxes does not grant legitimacy to bitcoins.


7 posted on 03/09/2014 8:27:03 AM PDT by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: Kaslin

All of the people saying that Bitcoin (the concept more than the brand) isn’t money are probably right. The question is how it is really any different from fiat money created by a government.


8 posted on 03/09/2014 8:33:31 AM PDT by cdcdawg (Be seeing you...)
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To: RIghtwardHo
A currancy with no government backing is no currency at all.

You mean like those worthless Federal Reserve Notes backed in full faith & credit by Uncle Sam?

9 posted on 03/09/2014 8:34:52 AM PDT by Extremely Extreme Extremist (15 years of FReeping! Congratulations EEE!!)
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To: RIghtwardHo
It’s idiotic. It is no more than cyber-space barter which is not sustainable in the long run and not at all among large groups of people.

All trade in money is actually trade in a commodity which has been elevated to the role of money.

The best way to think of money is an a unit of measure. Bitcoin offers a pool of money that is fixed in supply, thus not given to inflation like a government or fractional reserve issued currency.

There is nothing in the protocol that prohibits large groups of people from utilizing it.

Therefore, it will primarily be used to launder money and purchase in the black market.

Most cash is tainted with drug residue, but this doesn't make that the primary use of cash.

A currancy with no government backing is no currency at all.

Governments took control of currencies so they could profit from the debasement thereof (taxation without the hassle of collections).

Currency with no government backing is the only form of currency that can function as a store of value over time.

10 posted on 03/09/2014 8:56:17 AM PDT by Gunslingr3
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To: Kaslin
A Voluntary currency. Take it or leave it.
It works until it doesn't. No guarantees.

11 posted on 03/09/2014 9:04:17 AM PDT by BitWielder1 (Corporate Profits are better than Government Waste)
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To: I want the USA back
Bitcoin is nothing.

No, bitcoin is a protocol for facilitating peer to peer transactions with verification managed by a decentralized network of computers maintaining the ledger of accounts.

Running a sophisticated program does not create money.

You're right that there is more to it than that.

It is impossible to mine electrons.

If you think bitcoin requires one to 'mine electrons' you've been grossly misinformed.

It is not money. It is not currency.

It is money, and it is a currency.

The fact that you spent some real money to pretend-acquire some bitcoins does not make them real money.

When you do work or sell good and receive bitcoins, and then trade those bitcoins for goods or work from others, that makes them real money.

An entry in an electronic ledger does not necessarily reflect reality.

This would be news to your bank with regard to your account denominated in USD.

Wishing for an alternative to the dollar does not make one magically appear.

Agreed. But creating a program to maintain a decentralized ledger and verification payment system that allows peer to peer transactions without the need for permission from the government or the existing financial institutions that currently generate over 100 billion dollars annually in fees does make an alternative to the perpetually debased U.S. dollar appear.

Wishing for a way to escape taxes does not grant legitimacy to bitcoins.

Bitcoin doesn't ask for a way to escape taxes. Bitcoin begins with the premise that you and I don't need someone else's permission to trade with one another.

Bitcoin will only be elevated to the role of money in a society if it can perform the functions of money superior to the existing alternatives. How broad the niche for bitcoin is depends on both its utility, and how heavy handed government regulation is of the existing banks that interact with exchanges. It works great for internet exchanges, where waiting 10 minutes or more for solid verification isn't an issue for a good that is being shipped 3-5 days, or even overnight. Transferring money to a relative, or even just accessing your money to pay for a hotel when overseas, are the kind of thing that bitcoin facilitates.

Think of the utility something like bitcoin has if you're in Argentina and the government is trying to enact foreign exchange currency controls so they can inflate the local currency and pay the government's cronies and supporters. Easier to have a bitcoin wallet accessible from anywhere in the world than try to cross a border with a suitcase of dollars or gold.

Hyperinflation doesn't have to hit American shores for an American to benefit from the profligacy of even less soundly run fiat money countries.

12 posted on 03/09/2014 9:19:03 AM PDT by Gunslingr3
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To: Gunslingr3

Backed by nothing the bitcoin is a US dollar by another name. LOL


13 posted on 03/09/2014 9:30:08 AM PDT by stocksthatgoup (Take out the trash)
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To: I want the USA back

An entry in an electronic ledger does not necessarily reflect reality.”””

I think this also applies to Ally Bank.

Only an online entity. No persons to talk to that you can see. No buildings that you can walk into.

A bank created by Obama when he stole the GMAC financing arm of General Motors when he hammered them with an illegal bankruptcy.


14 posted on 03/09/2014 9:30:18 AM PDT by ridesthemiles
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To: RIghtwardHo
"A currancy [sic] with no government backing is no currency at all."

I most respectfully reply, "It ain't necessarily so."

Any object valued by another human being becomes a potential currency for trade: cigarettes, food, candy, sex, booze; Name your desire, and put up an object equally valued by your opposite, then voila! You have just made an exchange of currency. And people have exchanged forms of currency long before governments appeared to steal their slices of the pie.

Whatever fuels desire is "golder" than gold, baby. And no government on earth can completely control that flow.

The notion that said objects of currency exchange must have the backing of a government is simply not true. It intimates that it is government, not man, who determines value. And that, my friend, is simply statist bullshit.

have a nice day.

15 posted on 03/09/2014 9:32:50 AM PDT by 60Gunner (Fight with your head high, or grovel with your head low.)
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To: Gunslingr3

“Currency with no government backing is the only form of currency that can function as a store of value over time.”

Sorry, but that is completely incorrect. Currency has always existed in almost any society that trades goods, even in the absence of government. There are many examples of such currencies, but wampum is the one people commonly know about.

In general, currency is any money that is freely circulated in daily commerce, and in general, useful money must be:

1. durable,

2. divisible,

3. convenient (or portable),

4. stable in value,

5. limited in quantity,

6. universally accepted, and

7. possesses a recognized unit of value.

Nowhere in those criteria is a “central bank” or “government backing” required.


16 posted on 03/09/2014 10:38:16 AM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: catnipman; Gunslingr3

Currency of Yap

17 posted on 03/09/2014 10:50:09 AM PDT by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: stocksthatgoup
Backed by nothing the bitcoin is a US dollar by another name. LOL

Bitcoin is 'backed' by the distributed, decentralized verification network it runs on.

The pool of bitcoins is ultimately fixed by the protocol, unlike the USD which can be printed, in the words of Ben Bernanke, 'willy-nilly'.

18 posted on 03/09/2014 10:58:24 AM PDT by Gunslingr3
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To: catnipman
“Currency with no government backing is the only form of currency that can function as a store of value over time.”

Sorry, but that is completely incorrect. Currency has always existed in almost any society that trades goods, even in the absence of government.

We agree, I believe you misread what I wrote.

19 posted on 03/09/2014 10:59:40 AM PDT by Gunslingr3
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To: bert
Currency of Yap

I can definitely see how, with choices, that currency would quickly fall out of favor. Portability and making change are important factors for money in a society with a high division of labor. Being able to send a million, or one millionth, of a bitcoin around the world in minutes is definitely an advantage of the protocol.

20 posted on 03/09/2014 11:02:29 AM PDT by Gunslingr3
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To: FAA

no one and nothing....

and with a $100 to $200 million dollars data security breach (i.e. theft) people will be less likely to ‘trust’ that Bitcoin will be there for any exchange of value. Someone gets your money and you get NADA


21 posted on 03/09/2014 11:05:30 AM PDT by Nifster
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To: UnbelievingScumOnTheOtherSide

You mean like the Mafia and Vegas??

a ‘few”???? No wonder people don’t blink at TRILLIONS in budgetary nonsense from DC when hundreds of millions of dollars of bacons are lost


22 posted on 03/09/2014 11:07:06 AM PDT by Nifster
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To: Errant

Ping


23 posted on 03/09/2014 11:10:46 AM PDT by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: catnipman

Salt was a form of currency at one time. That is where the term “worth his salt” came from.


24 posted on 03/09/2014 11:13:48 AM PDT by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Nifster

Bacon’s are lost....noooooooooo...not the bacon. :-)


25 posted on 03/09/2014 11:20:40 AM PDT by Conservative4Ever (waiting for my Magic 8 ball to give me an answer)
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To: Kaslin

It’s legal, right now it’s kind of riding the line between private currency and a commodity.


26 posted on 03/09/2014 11:25:15 AM PDT by discostu (I don't meme well.)
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To: Conservative4Ever

drat..... I have got to turn off that auto correct feature. It sneaks back in on me when I am not paying attention (or bitcoins)


27 posted on 03/09/2014 11:28:50 AM PDT by Nifster
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To: Lurkina.n.Learnin; nascarnation; TsonicTsunami08; SgtHooper; Ghost of SVR4; Lee N. Field; DTA; ...

Click to be Added / Removed.
28 posted on 03/09/2014 1:41:25 PM PDT by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: Gunslingr3
Gunslingr3,
I appreciate your lucid and temperate remarks.
They spread more light than heat.
With something new, comparisons with something old are common.
I understand the use of ‘wooden nickle’.
We all can make wooden nickles in unlimited quantities.
Making(mining) a bitcoin, which is unique, verifiable, identifiable, transferable, takes a lot of time and money to do.
Whatever bitcoin is, and the concept and practice change form daily, it is not a federal reserve note or a wooden nickle. When there was a glitch in the old bank system, most of the time, Jesse James or Dillinger had stuck up the place. Now, what crooks do is much different, and does not involve horses, guns, whiskey or neat old cars.
When I first read that ‘bacon’ was being treated as currency, I thought,’OMG, people, this is a disaster. I would eat my savings literally.’
TWB
29 posted on 03/09/2014 2:16:41 PM PDT by TWhiteBear (Sarah Palin, the Flame of the North)
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To: Lurkina.n.Learnin

“Salt was a form of currency at one time. That is where the term “worth his salt” came from.”

It’s also where the word “salary” comes from!


30 posted on 03/09/2014 4:16:26 PM PDT by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: RIghtwardHo
A currancy with no government backing is no currency at all.

Oh, what nonsense.

Bitcoin may or may not be the answer, but ordinary people are quite capable of finding something to serve as currency without the government's blessing. After all, we manage to buy and sell tomatoes on our own -- tell me how you think money is any different.

31 posted on 03/09/2014 5:42:25 PM PDT by BfloGuy ( Even the opponents of Socialism are dominated by socialist ideas.)
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To: FAA
Bitcoin is a really great idea. It's the money of the future. If you'll send me all your money I'll buy some bitcoins for you and send them right back ... honest. ;~}
32 posted on 03/09/2014 10:19:35 PM PDT by Baynative (Got bulbs? Check my profile page.)
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To: Kaslin

For those who understand that all fiat currencies’ (such as all currencies currently in circulation)value eventually approach the value of the paper it’s printed on, have your $ in things that appreciate value over time instead of depreciate. As such, gold currently provides with a good value as it is barely above the cost of production. Gold miners are even better as they got absolutely wacked the last couple of years and have a long way to recover.

This tapering by the Fed will be short-lived. It will cause interest rates to rise, and when they do, our oversized debt will cause the interest payments on the debt to eat a huge chunk of the budget, and make up an even bigger portion of the deficit. Borrowing $ to pay interest on the debt is not sustainable, and the Fed will be forced to start the printing presses again. This will devalue the Dollar further, especially as compared to gold.


33 posted on 03/10/2014 4:20:34 AM PDT by winner3000
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To: UnbelievingScumOnTheOtherSide

...willing sellers and willing buyers.

Ponzi: take yer profit before the suckers catch on...

34 posted on 03/10/2014 4:52:43 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: stocksthatgoup
Backed by nothing the bitcoin is a US dollar by another name. LOL

They should have called them CREDITS.

ALL the future space stories used them!

35 posted on 03/10/2014 4:56:16 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: catnipman
will WORK for FOOD
equals no 'money' needed.


Add a middleman into this equation and THAT is where things get sticky...

36 posted on 03/10/2014 5:01:45 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Kaslin

It’s a fool’s gambit.


37 posted on 03/10/2014 2:53:54 PM PDT by DannyTN
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To: Kaslin

It’s a fool’s gambit.


38 posted on 03/10/2014 2:53:54 PM PDT by DannyTN
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To: Kaslin
How is "bitcoin" any different from the online currencies in online fantasy games that are used to by fantasy stuff in fantasy worlds?

-PJ

39 posted on 03/10/2014 3:03:32 PM PDT by Political Junkie Too (If you are the Posterity of We the People, then you are a Natural Born Citizen.)
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To: Kaslin

This is why the right loses election after election after election. The inability to adjust a rigid mindset, cavemen.

The Bitcoin protocol is the greatest breakthrough in the history of computer science, this can not be overstated. It is changing our existence as I type. All you have to do is go on Twitter and see hourly reports of more people and places of business accepting it as payment. The growth is exponential and nothing has a greater network effect than money.

Bitcoins adoption is out pacing every technology that has come before it and when it hits critical mass its rise will be more rapid than Google and Facebook combined.
For the sake of your families and their future try to look at this with open eye’s. Look at early adopters, they are some of the most brilliant minds of our time. There is a massive influx of venture capital building infrastructure that will dominate the future.

Am I to understand that the majority FReepers stand with the Nobel Laureate Paul Krugman? A man who couldn’t grab his ass with his own two hands? Naysayers in the media, tulip bulbs, monopoly money, wooden nickels? rank stupidity.

The person or persons who merged technologies into the Bitcoin Protocol are of the intelligence level of Einstein, you really need to understand this. The absolute nonsense spewed on this forum has really opened my eyes to the problems underlying the failure of the rightwing in this country, it is pitiful.


40 posted on 03/10/2014 4:09:25 PM PDT by TsonicTsunami08
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To: TsonicTsunami08

So now I will talk to myself. Following my own advice I went on Twitter this morning to see how many more people and business would adopt Bitcoin today. I found this wonderful video by Ryan X. Charles that confirms everything stated in the above post with regard to Bitcoin. Mr. Charles walked away from a PhD in physics to pursue opportunities in Bitcoin. This is a person with superior cerebral horsepower, one of many who are working in the Bitcoin space.

Please listen to this sober, intelligent analysis of not what is going to happen, but what is happening right now at this moment in Bitcoin.

http://www.youtube.com/watch?v=6F57HIxQuMo


41 posted on 03/11/2014 11:51:45 AM PDT by TsonicTsunami08
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