This is an excerpt from John Pitts’ latest blog post, Commodity barter is legal—so is BitCoin. Read the full piece on Medium.
BitCoin was legal at creation; commoditizing data with protocol rules violates no laws—anymore than inventing the shipping container, which automated much of what stevedores did, was.
The fact that BitCoin makes for a commodity which HAPPENS to function extremely well as money, doesn’t make it illegal. Perhaps the better way to say it, is BitCoin is misunderstood due to its youth. If recorded history were better (see Tominaga Nakamoto), we’d probably find fine historical precedent in ancient Lydia at the time of the first electrum coins.
Gold and silver already existed WELL before coins were created to commoditize and verify metallic properties of the commodities involved—gold and silver. In fact, commoditizing the shiny metals WAS the business of goldsmiths and silversmiths before this service was shepherded into private and then public mints. What a Lydian businessman likely started—the Roman, Spanish, and U.S. mints finished. But imagine being able to walk around Lydia in year TWO of electrum coins—there’s probably some eerie similarities to today’s BitCoin.
If people today started bartering with barrels of crude oil or stamped copper coins (which could be construed as making a money) coins from a single trusted issuer then this is no different than trading in Folgers coffee tins—which is not illegal.
Satoshis aren’t exchanged for cents based on issuer’s promise. Is it not true Liberty Reserve set the PRICE of their token? This is illegal—what Gilder asked for is illegal. You cannot pin the value of BitCoin because it would make it illegal. BitCoin started off having no value, therefore it was created as a commodity not a currency. Notice Von NotHaus talking about his “base” going up from $10 to $20 and higher. There is no “base” set in BitCoin, it can theoretically trade to a price of zero if people don’t value it as a commodity, or it can trade to a market-accepted value as if it’s a coffee tin chock full o’ data.
BitCoin also does much for good, unlike plutonium or uranium, and thus does not need to be controlled as a dangerous commodity. Whereas these cryptocurrencies which have been created for anonymity are more like plutonium and require societal controls or else many innocents can be harmed quickly. BitCoin is not like this at all, because its creator was careful to include privacy not anonymity.
To read the rest of John Pitts’ piece, head over to Medium.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.