Quote from: mgio on May 29, 2013, 04:23:52 AM

Look what happened to Liberty Dollars. They weren't even really breaking any laws but the founder was made out to be a domestic terrorist.

There are already laws on the books that prohibit creating a currency that competes with the dollar. The gov just has to decide that those laws apply to bitcoin.

I think there was a case about a pizza place near the Mexican border that decided to accept pesos instead of dollar and they quickly put a stop to that.

My big fear with bitcoin is that it is pretty much impossible for it to actually be used legally. When you buy that gyft card with bitcoins, do you declare the appreciation of the coins relative to when you bought them to the IRS? I'm willing to bet most people don't, but you are supposed to. And there is no way to enforce because bitcoins are anonymous. The govt is going to become more upset that they aren't getting their cut as bitcoin grows and will start to cause more and more problems for us. I don't see any easy way around it.

You are correct that the Liberty Dollar was not illegal, and yet has caused much trouble for those that were involved. I believe the Liberty Dollar case will prevail in the end (remember that BVNH has yet to be sentenced after more than two years). Nevertheless, it remains a cautionary tale. That case is fundamental to how and why I have to operate in the way that I do with offering the NEW LIBERTY DOLLAR. It took a very deep study of that case, reading all the testimony and evidence, and LOTs of lawyer time.
The laws on the books prevent STATES from issuing competing currencies. They do not prevent barter, or the Article 1 right to contract.
Bitcoin is really very easy to use legally. All the accounting is kept for you in perpetuity in the block chain and this provides legitimate business with the best backup of irrefutable accounting records yet devised.
So yes, you can declare the income from appreciation when sold, just like you might do for a stock sale.
There can be some very easy ways around the problems. I predict that as it grows it will become much easier to comply with the basic laws, addons to accounting software to automatically pull your records from the block chain and do your taxes more easily than ever before. I am almost surprised that it hasn't already been done. It would be a quick programming job and would benefit the community tremendously, and the programming team tremendously x2.