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> A currency requires backing by a central authority. Not so. The proof is that Bitcoin is functioning as a currency, and the Fed chair has recently said that

• dragonwriter 13y ago
  > Bitcoin is functioning as a currency, and the Fed chair has recently said that the government has no right to regulate it No, the Fed Chair (the chair of the Federal Reserve) said that the Fed (the Federal Reserve) had no power assigned by Congress to regulate it. She didn't say the government had no right (or more accurately, power) to regulate it. The Fed is not the same thing as the government.
  • lutusp 13y ago
    > The Fed is not the same thing as the government. And the Army isn't either, strictly speaking. But it's clear that the U.S. government has no right to control something like Bitcoin, and perhaps more interesting, it's not clear whether the government could control such things if it had statutory authority. Given the Bitcoin is international in scope, and given that Bitcoin isn't solely a U.S. medium of exchange, the U.S. government has no right to control it, only to forbid its use in certain U.S. transactions if it chose to do so (as the Chinese have done).
    • dragonwriter 13y ago
      > And the Army isn't either, strictly speaking. Right, and if someone had taken a statement that, say, the Army has no power to regulate securities markets to mean that the government had no power to do so -- the equivalent of the error made in characterizing the Fed Chair's statement as being about the government authority with regard to bitcoin when it was about the Fed's authority -- that would be relevant. > But it's clear that the U.S. government has no right to control something like Bitcoin Its rather clear that the Congress has enumerated Constitutional power to regulate the value of any money that it doesn't issue in Article I, Sec. 8. Its also rather clear that the US government has a wide variety of powers to regulate commerce of an international or interstate character, regardless of whether it is conducted in bitcoins or bananas. The only sense in which "it's clear that the U.S. government has no right to control something like Bitcoin" is in the sense in which the U.S. government doesn't have rights at all, it has powers. The US government certainly has a variety of explicitly granted powers that could be applied to regulate bitcoin -- and, in fact, some of them have been applied in a way which governs parts of the bitcoin ecosystem (as shown in, e.g., the FinCEN guidance on applicability of money service business rules to entities dealing in virtual currencies.)
      • lutusp 13y ago
        >> But it's clear that the U.S. government has no right to control something like Bitcoin > Its rather clear that the Congress has enumerated Constitutional power ... I think yo may have replied to my sentence without reading it fully. Because BitCoin is an internaitonal entity, the U.S. government has no authority/right/power to regulate Bitcoin (note the upper case), only some U.S. transactions that involve bitcoins (not the lower case), using laws unrelated to virtual-currency issues. > The US government certainly has a variety of explicitly granted powers that could be applied to regulate bitcoin ... Do try to avoid confusion in your posts. "Bitcoin" with an uppercase first character refers to the Bitcoin system, but "bitcoin" refers to the elements of exchange. Your sentence is open to misinterpretation -- do you mean the virtual currency system Bitcoin, or do you mean transactions involving bitcoins? > ... and, in fact, some of them have been applied in a way which governs parts of the bitcoin ecosystem False (unless the same meaning ambiguity is present). Legal actions have been based, not on Bitcoin or virtual currencies, but on the specific uses for bitcoins, such as money laundering, drug trafficking and so forth. In other words, to date legal actions have addresses alleged crimes having nothing specifically to do with virtual currencies.