Bitcoin is now a declared currency in Texas.

http://techcrunch.com/2013/08/07/bitcoin-clampdown-continues-as-federal-judge-says-its-a-currency/

by nRike • 13 years ago

26 23 13 years ago

techcrunch.com

joelg236• 13 years ago

What does this mean in practicality?

spc476• 13 years ago

That you have to declare bitcoins received as income to the IRS?

msgilligan• 13 years ago

That was true long before this ruling.

rayiner2• 13 years ago

You have to declare anything of value received as income. E.g. if you get paid in shoes, it's still income.

hahame2• 13 years ago

this would be a crushing blow for anyone just playing around with btc. innovation and creativity halted

dragonwriter2• 13 years ago

It means that the particular defendant in this particular case can't get out of a securities fraud case because the investment contracts were sold for (and the interest offered in) bitcoins. (As a trial court decision, it has no binding in effect on any other case, and, in any case, the ruling is narrowly written to be specific to the context of the specific law at issue, not the definition of "money" more generally.)

natrius• 13 years ago

"Bitcoin creator Satoshi Nakamoto probably didn’t think that even the U.S. government would treat it as a currency and try to regulate it."

Citation needed.

From the opinion: "The question currently before the Court is whether the BTCST investments in this case are securities as defined by Federal Securities Laws."

This case was about whether a dude who was accepting deposits of Bitcoins and paying interest on them was in the securities business. Of course he was.

hahame2• 13 years ago

declaring Bitcoin as currency is too narrow. FYI there's dozens of other digital currencies, collectively termed altcoins, such as litecoin and ripplecoin. See http://www.cryptocoincharts.info. Anyone is also able to create their own blockchain.

dragonwriter2• 13 years ago

declaring Bitcoin as currency is too narrow.

Courts deal with the issues in the cases before them. The relevant issue in this case was whether an investment sold for bitcoin involved a transaction of "money" for purposes of the Exchange Act of 1934, making it subject to various securities-related rules.

The status of other altcoins (or even bitcoin's status as "currency" in any sense other than the specific context of the Exchange Act) was not an issue before the court.

M4v3R• 13 years ago

Declaring Bitcoins as currency is one thing. The other thing is how do people prove to the court that they don't own Bitcoins anymore because they've sent them to BTCST (the famous pirateat40 hedge fund), and even if judge accepts a blockchain transaction as actual evidence - that the receiving address actually belonged to BTCST. That will be fun to watch.

GuiA• 13 years ago

Does that mean that playing Satoshi dice if you're a US citizen under 21 is illegal?

peteretep• 13 years ago

This article is so confused, I don't even...

The ruling represents yet another attempt to regulate Bitcoin transactions

Frickin' awesome. Finally they're going to get acceptance from the mainstream, and my investments will be worth something...

Bitcoin was born on the idea that nobody could regulate it.

Really? I always thought it was born on the idea of making its creator rich. Either way, its value comes from the inability for players to unilaterally (and meaningfully) increase the money supply.

The only real value of a Bitcoin comes from its users

Kinda like every other currency, then?

thinkloop2• 13 years ago

The security of currencies come from their underlying demand. Gold is used as a currency, first and foremost, because it has strong intrinsic value, and second because it has physical properties that make it convenient to divide and store. If gold had no independent demand it wouldn't be considered for a currency.

The US dollar has even more demand. All Americans are required by law to purchase it and own it for the purpose of paying their taxes. If they do not, the most powerful police and military will lock them in prison. This is the base upon which the rest of the system is built.

Bitcoin, to its good fortune, is also backed by independent demand: crime. Because of crime, and its adeptness at enforcing agreements, BitCoin has a strong tangible base upon which it can grow its ecosystem. The biggest threat to BitCoin is not a sudden loss of interest by the masses, but a competing currency that better serves crime and takes BitCoin's market share.

Gormo• 13 years ago

Government-issed currencies offer far, far more utility for criminals than Bitcoin does.

Every Bitcoin transaction is a matter of public record. There's no anonymity - everything you do with Bitcoin leaves a paper trail. Criminals using Bitcoin expose themselves to a much greater risk of detection than they'd face by using a briefcase full of dollars. There are ways to mitigate the traceability of Bitcoin transactions, but these typically involve trusting middlemen, and so come with their own set of risks.

The value of Bitcoin originates in the inability of the government to manipulate the money supply, but I suspect that criminals are probably less impacted by inflation than the typical non-criminal is.

It's honest businesspeople and not criminals who stand to benefit from Bitcoin.

thinkloop2• 13 years ago

BitCoin signatures are traceable, but the link between signatures and human beings is only traceable from outside the BitCoin system. If you are already dealing with briefcases of cash, it is a simple matter to buy BitCoin using one of those briefcases anonymously. Throw Tor in the mix, and you'd have to be the next Bin Laden for the world to dedicate the resources necessary to uncover your dealings. These are people who built 200meter+ tunnels underground to transport drugs between the US and Mexico: http://www.huffingtonpost.com/2012/07/14/drug-tunnels_n_1673...

Cash is a terrible currency for big time crime. It is very difficult to store, being susceptible to mites and fungus. It is very difficult to exchange large quantities, think pallets instead of briefcases for millions/billions of dollars (which is the primary reason they don't make a $1000 bill). It is nearly impossible to exchange any meaningful amount cross-border. It is difficult to count and keep track of. It is easier to counterfeit and get bad cash. Cash has serial numbers, fingerprints, and DNA all over them (I'm surprised we don't hear more about cash forensics, or bugged cash with tracking chips in them).

Cash will still be used for the last mile, for the street-level "retail" transactions. But when those get gathered up and need to be sent back to headquarters, or between organizations, or to other nations, the backhaul, by necessity, needs to run on something more sophisticated. Today, that seems to be Bitcoin, even though I agree with you that it is far from perfect. Its first-mover advantage is allowing it to build a robust ecosystem of services that is making it that much harder for an incumbent to take its place. But when that super currency does come, and crime shifts to using it, I predict a relatively straight decline in BitCoin value.

Sealy• 13 years ago

I wouldn't really call it a 'clampdown' as the word has negative implication. I would call it a 'legitimization'.

Federal judges have acknowledged that Bitcoin has the underpinnings that constitutes it as a currency. This is HUGELY exciting.

Disclosure: I work in financial regulatory reporting and am bullish on bitcoin.

Bitcoin is now a declared currency in Texas.

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