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.htmlYour 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]
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.htmlAgain, 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.