IRS Says Bitcoin is Property, Not Currency
In a notice, the IRS said that it generally would treat Bitcoin held by investors much like stock or other intangible property. If the virtual currency is held for investment, any gains would be treated as capital gains, meaning they could be subject to lower tax rates.
http://stream.wsj.com/story/markets/SS-2-5/SS-2-490994/Probably willful confusion on the govenment side, just like the central bank reports.
It is not a currency, because it is not a generally used medium of exchange, ok, but it is
money.
It is not virtual, it is complete, full, real, tangible money.
The expression "virtual currency" should really not be used for bitcoin, cryptocurrency is better, but the best name is
cryptomoney.
Seems better for Bitcoin, at least at the moment, to be defined as an asset rather than as a currency b/c otherwise, it seems that government officials could want to squelch it, if it were defined as a currency.
Also, defining bitcoin as an asset does NOT seem to stop people from trading or otherwise using bitcoin as a payment system. Doesn't seem like a problem... and there is some benefit that comes with a definition, even though the definition may NOT be the end of the story..
Really, what is money, is what traders say is money. So a trade consist of selling some good for money, which is the same as buying money and paying with that good. Sales tax is bad, but tax on buying or selling money is just absurd. Still, some governments tax buying gold, as if gold is not money. If gold is money, taxing the trading of it is also absurd.
Therefore, governments will not define bitcoin as money, at least they will defer it till it is obvious to everybody that it is money.
I wonder if the proposition that bitcoin is money, could be confirmed in some international court for human rights, probably not.