In bid for credibility, largest Bitcoin exchange moves to Silicon Valley
arstechnica.com
arstechnica.com
Maybe its just my New England sensibilities (read: frugality) talking, but I sometimes refer to Silicon Valley as "the land where money is make-believe". I'm referring to the (perceived) bubble of course, but also my (perceived) view of the conspicuous consumption that seems much more pronounced over there than around here, perhaps as a result of VC money.
I swear walking around some places I didn't see a car that was made between the years 1960 to 2005. They all looked either vintage or brand new.
Not that it's a bad thing, I'm sure people have a great time and get things done, etc, but my mind translates the title as "In a bid for credibility, largest make-believe currency exchange moves to the land where money is make-believe".
I mean is there a place in the U.S. where the cultural perception is that people take large sums of money less seriously?
(Maybe D.C.)
end of story, right?
Why does the currency any given person pays their taxes in matter?
Sure, you can exchange USD, CND and BTC as much as you wish, but the point is that, within Canada, you can be certain that you can always pay and be paid in CND -- which can't be said for any other currency.
What gives the USD value is that the law of the land mandates that it is "legal tender for all debts public and private", meaning that all governments and businesses (and individuals, when it comes to receiving salaries, see 29 CFR 531.34) can not refuse to be paid in dollars. [NOTE: This means dollars, not dollar bills -- you can refuse to accept cash money]. Thus, if you try to pay me in Bitcoins in return for mowing your lawn, I can laugh in your face, but I can't refuse your dollars and demand that you pay me in Bitcoin.
Therein lies the value of the dollar, or of any national currency -- I can always ensure that I can operate within my local economy without incurring exchange rate risk or exchange arbitrage, because I can be 100% certain that I can buy the things that I want in dollars, and receive payment for my work in dollars as well.
As long as it remains illegal to pay salaries in Bitcoin, most consumer transactions will involve an exchange, which will add overhead.
FYI: "Legal tender is currency that cannot legally be refused in payment of debt. Private businesses may adopt their own policies on whether or not to accept cash as long it doesn't violate state law."
So when you say this: "all governments and businesses can not refuse to be paid in dollars"
You've misinterpretted the law.
And when you say this: "Thus, if you try to pay me in Bitcoins in return for mowing your lawn, I can laugh in your face, but I can't refuse your dollars and demand that you pay me in Bitcoin."
head asplode!
This is just utterly mind boggling. In what world does a service provider HAVE to accept whatever payment terms the customer demands of him, even if the customer demands something the service provider never agreed to in the first place? If I'm a business, and I tell you I'll provide X service for you, but only if you agree to pay me in BTC, and then you turn around after I'm done and say "HAHA J/K LOL here's some USD", I have every right to tell YOU to fuck right off.
"as long as it remains illegal to pay salaries in Bitcoin"
Talk about painful levels of ignorance. I would love to see you try to substantiate this utter falsehood.
"because I can be 100% certain that I can buy the things that I want in dollars"
Let's revisit this sentiment in 25 years.
Talk about painful levels of ignorance. I would love to see you try to substantiate this utter falsehood.
Sure, glad to elaborate.
US Code 29 CFR 531.34 lays out the requirement for minimum wage, and spefically calls out that minimum wage must be "payable in cash or negotiable instrument payable at par". Cash is pretty clear -- it means dollar notes and coins. The definition of a negotiable instrument is that it must be exchangeable for a fixed amount of money, specifically money that is the fiat currency. (http://business.olivet.edu/classes/bsns3511f/pdf/bltch19.pdf)
In administrative rulings, the US DOL has generally held that employers must offer the option to pay an employee in either cash or check. (http://www.wagehourinsights.com/wage-and-hour-faqs/)
I think my "utter falsehood" is relatively well-supported by the law and administrative precedent of the US government, at least as it pertains to payment of the minimum wage.
Taking your first point second:
Firstly, USD, being the world reserve currency, has value because of its current ubiquity in international trade, NOT because of its legal tender status in America.
FYI: "Legal tender is currency that cannot legally be refused in payment of debt. Private businesses may adopt their own policies on whether or not to accept cash as long it doesn't violate state law."
So when you say this: "all governments and businesses can not refuse to be paid in dollars"
You've misinterpretted the law.
And when you say this: "Thus, if you try to pay me in Bitcoins in return for mowing your lawn, I can laugh in your face, but I can't refuse your dollars and demand that you pay me in Bitcoin."
head asplode!
I apologize, I overreached.
You are completely right, two entities can pre-negotiate a contract for any kind of exchange of payment and good/services in advance.
However, barring any such advance negotiations, you can't refuse my payment in dollars for a debt incurred by delivery of a good or service, and I can't force you to take any other form of payment.
This doesn't pertain to a retail purchase, since there is no debt until the item is delivered -- if you want me to pay you in BTC, or jellybeans, or rubles for that candy bar, that's fine.
But, if you mow my lawn for $25 and I don't specify how I'm going to pay you, then you are within your rights to demand that I pay you in dollars, and not $25 worth of BTC.
(Knowing nothing about cars, I don't know how big a factor that would be.)
Kim dotcom's case shows the US willing to even break it's own laws to stop things it doesn't like. I suspect Bitcoin isn't a target currently but why bet that the situation won't change. The US arguably will a significant incentive do things to protect its currency if Bitcoin truly becomes an alternative currency.