Topic: Is Bitcoin legally a Currency? (Read 4031 times)

While bitcoins may or may not be considered a currency, Bitcoin[//b] certainly is not a currency, or not only a currency: it is a computer program, an accounting system, p2p network, a protocol, a public ledger of digitally signed transactions, decentralized time-stamping service, etc.

Keeping this in mind will  help you think and argue more clearly.

I read the Bitcoin Foundation's arguments against the California Regulators and that's not the argument they used.  The CA regulators were arguing that the Bitcoin Foundation was engaging as a money transmitter and the Bitcoin Foundation replied that they are not.  Their argument is that they aren't doing any money transmitting, and that even if they were, they aren't doing business in California so that the California Regulators have no grounds to regulate them.  See their letter for the full details of their response.

Well it's not so much about planing taxes over here. Bitcoins can be considered a kind of income, thus there is a kind of income tax to be paid. Plus if you owe money to the state but your bank account is void, they'll happily take your bits.

And German Kapital Gains..
http://www.telegraph.co.uk/finance/globalbusiness/10252383/Germany-plans-tax-on-bitcoin-after-virtual-currency-recognised-as-private-money.html

It's in the news: The german Ministry of Finance accepts Bitcoin as a currency.

http://www.tagesschau.de/wirtschaft/bitcoin100.html
http://www.heise.de/newsticker/meldung/Berichte-Finanzministerium-erkennt-Bitcoins-an-1937531.html

Right... trying to deal in Bitcoin in the USA is slightly better than Zimbabwe Dollars at the moment.

Well definitions are only useful when agreed upon by the masses.  I can start calling day the period of time when the moon provides enough illumination to read a street sign from 10 ft away but it doesn't really do any good.  In fact all it does it create a huge amount of confusion (two different groups calling the same thing different names). 

For example the euro is most currency a currency but if you have Euro's in the US you have absolutely no choice but to convert some of them to dollars to pay your taxes.  That doesn't magically make the Euro "not a currency".  The fact that someone, somewhere can pay their taxes in Euros doesn't really help you or meet your somewhat nonsensical definition.

The Euro is a currency.  The Bitcoin is a currency.  The dollar is a currency.
The dollar is not legal tender in the EU.
The Euro is not legal tender in the US.
The Bitcoin is not legal tender anywhere (yet).

Not in history prior to recent legal tender laws. If you could pay your taxes, the currency was acceptable anywhere and by everyone in the land. That is true today as well. I was not arguing that there were not other forms of currency, but valid to me means I can live on it. You cant live lawfully and without charity on a currency that is not accepted for everything, everywhere by everyone, especially taxes. It requires conversion. In that context, Bitcoin is indeed illegitimate/invalid, Yes, I know I can jump through all sorts of fancy hoops to convert it. That isnt the point.

I don't know that anyone would argue that BTC is authorized or adopted by the United States.

You maintain the confusion between terms.  Your description is of legal tender, and nothing really to do with currencies, legitimate, defacto or otherwise.
That a particular currency is legal tender within a geographic region does nothing to invalidate all other currencies that may be bartered about.  Legal tender just means that it can settle a debt under the law, such as a tax debt, which you can get by hanging out in an area with a government that taxes people.  Legal tender also means that you are obliged to accept it to settle any other debt.  It does not require you to transact using it, only to not refuse it if used to pay a debt (you can't require BTCBTC instead if $$ are offered) unless these are specific terms in a contract, and if that contract gets litigated, it will likely end up being $$ anyway as "specific performance" (another legal term that can require a different payment) is much more difficult to get from a judge.

Look at other debts such as a restaurant bill.  The restaurant is required to accept legal tender if paid, but is free to accept dishwashing, a good review in a magazine, hugs or anything else they might choose.  So dishwashing can be a currency.  What makes a currency is the fluidity by which transactions can occur with it.  Like the current in a river, the more money flow, the more defacto it is a currency.  

So bitcoin is a "currency" but there is nothing either illegitimate or legitimate about that term.  50K transactions a day make it a pretty good one (though maybe not as good as hugs).  Currency is not a legal term of art in the way that "legal tender" or "current money" are.

Then I guess the hinge-pin is my use of the word 'legitimate'. Allow me to replace that with 'defacto'.

Bottom line at the end of the day is mean men with guns will kill me if I dont pay them with it and resist their attempts to imprison me for my inaction, which realistically requires me to earn it and use it, or I could go to prison or die, because they never deescalate or back off until equal-to-greater force is applied. They will keep sending more and more men until I pay, am in prison or dead. Then they take my property away from my heirs, sell it and recoup my refusal to obey.

So, for my purposes, I meant a currency you can pay Caesar what is Caesar's with.

Some might confuse "currency" with "legal tender".  The meaning is as distinct as the spelling.
The first has a practical definition, the second a legal one.
There are private currencies.
http://en.wikipedia.org/wiki/Private_currency
(Hey look, Liberty Dollar made the list and not yet Bitcoin?  Someone should update it.)

What has historically made a currency legitimate is the ability to pay perceived tax obligations, so no, Bitcoin is not a currency, because currently no taxing authority will accept it..

In the USA the US Dollar must be accepted for existing debt, under law and criminal penalties if not, so it appears the modern definition, at least in the USA, is to pay existing debt byway of coercive threat of force/death.

But miners aren't creating bitcoins; Satoshi was the only person ever creating bitcoins, when he started the blockchain; miners are simply finding the bitcoins that have always existed in the protocol...

Since California relies on the US Federal for this, for that geography, there is a strong argument to be made that anything that requires authorization by the US Federal FinCEN as a MSB is an example of "authorized by the United States".   This is far from a decided issue, as the FinCEN guidance is yet to be formalized by either the legislative branch or judicial. 

So next you need to look at the definition of "authorized or adopted by the United States".

I've read various portions of California law and they are very explicit. They uniformly define "money" as something authorized by the U.S. or foreign governments. The laws distinguish between "money" and "monetary value", and in many cases the two are treated differently. Granted, these definitions apply only to the specific context (in this case, California financial regulations).

From the California Financial Code

Yes, that is not a decided case,  nor appellate reviewed (which is something you really want if you are looking for a strong precedent).

The question of "legally a currency" is a strange one to raise.  Law is defined by geography so depending on where your feet are at the moment, the answer can change.  Whether it is a "currency" or not isn't even much of a matter of law as there is very little law on currency.  There is law on "current money" which is a very different thing.  
A better question would be whether Bitcoin has "value" under the law, and that is clearly a yes is most jurisdictions that will matter.  Value can give you standing before the law, as losses, damages, and enforcement will all hinge on this.  Chickens can be a currency, hugs can be a currency, whether or not Bitcoin is a currency is not so important to the law. What matters more is value.

What irked me a bit was the weird logic used by the defendant using outdated literature that said that Bitcoin had no specie, and that this would count against it as to whether it was money.
It now does have specie.
https://bitcointalksearch.org/topic/m.2883593

And, for what it is worth.  The USA Federal Reserve Notes don't have any specie either.

Eh... I'd barely call what was done in Texas "case law". It was an opinion by a magistrate judge in one federal judicial district. Magistrate judges -- while technically possessing all the adjudicative powers of district judges over cases they're assigned to -- aren't confirmed by the Senate and their opinions are rarely cited as "case law", merely "persuasive authority", even in the districts they are in. I am not going to research specifically whether magistrate opinions are even publishable (other than on the case docket), further restricting their precedential value; it won't surprise me either way.

Regardless, this judge barely analyzed whether bitcoin is money, because it pretty obviously is. Any other judge that's faced with the question will likely rule the exact same way.

That's irrelevant as it never went to court therefore it's not case law like the Texas ruling is.