Quote from: jgarzik on August 22, 2010, 08:13:24 PM

Quote from: trebronics on August 22, 2010, 08:04:35 PM

Quote from: jgarzik on August 22, 2010, 07:50:24 PM

How, exactly, do you ensure compliance with tax laws when people are spending US paper dollars (cash)?

(rhetorical question...)

Call it rhetorical if you like, but that does not make your point. The IRS has the ability to audit your bank accounts. That makes it really hard to cheat on your taxes in any significant way. Your bitcoin wallet is easily hidden, however.

And no, the IRS is not ok with Linden dollars and the rest. Congress is already nervous about transactions that use anything other than the US fiat currency.

http://themonetaryfuture.blogspot.com/2010/01/irs-may-push-for-tax-compliance-in.html

Your link does not substantiate your argument that "IRS is not ok with Linden dollars and the rest".

It should surprise no one that the IRS wants to tax income generated by US citizens.
It should surprise no one that it is likely illegal to not report bitcoin income to the IRS.

And none of this changes bitcoin's viability in any way. The IRS just wants you to report income, regardless of currency, or even if there is no currency involved at all.

[edited to add barter link]

Quote from: trebronics on August 22, 2010, 08:04:35 PM

You guys are fooling yourselves if you think bitcoin can be successful as a currency instead of a commodity. If you treat it as a commodity I think it'll survive. If you try and talk retailers into accepting bitcoins then you are just digging your own grave.

Have you forgotten the raid on the Ron Paul silver dollars? Their mistake wasn't the silver dollars. It was the move of retailers in the north-east to accept them instead of the US fiat currency.

http://www.thestreet.com/story/10390631/raid-on-ron-paul-dollar-maker.html

Again, your link does not substantiate your arguments. That guy was a nutter trying to sue the US mint.

OpenCoin has a nice legal report on the currency that's worth reading.

Between 1933 and 1971 it was illegal to own gold bullion in this country. And merchants weren't even accepting gold as a currency. It is important that you understand why the US, for decades, required that you turn over your gold bullion to the US government.

http://en.wikipedia.org/wiki/Executive_Order_6102

In Australia it is currently a crime to trade gold bullion without reporting all transactions to the Australian government.

You are living in blissful ignorance if you think the US government is going to allow widespread use of bitcoins as a currency. However, it is perfectly legal to create something that people will buy. Your odds are much better if you treat bitcoins as a commodity.

Then again, maybe the whole point in the bitcoin project is to ultimately be shutdown by government. It would bring a lot of attention to government's control of our personal wealth. If that is the case, then use bitcoins as a currency instead of something you hold for price appreciation.