Is Bitcoin really Money? We're about to find out...(well, it could take 7 weeks)

_Tombstone_

A Computer Programmer in the US sold $1500 worth of Bitcoin to a couple of FBI guys who had told him they were gonna use it to buy stolen credit cards. He's arrested for Money Laundering.

Now he's up in court but he wants all charges dismissed on the grounds that bitcoin, under Florida law, should not be defined as actual money.

Should bitcoin be considered money? It is a question which banks, government, regulators and financial institutions around the world have been grappling with for years, but now the question could finally be answered in a ground-breaking court case, the result of which could have significant impact on the cryptocurrency market all over the world.

This is thought to be the first case of its kind and the ruling by Miami-Dade Circuit Judge Teresa Mary Pooler will be watched with great interest not only in the U.S., but around the world. “This is the most fascinating thing I’ve heard in this courtroom in a long time,” Pooler said on Friday. A ruling is not expected for several weeks yet.

http://www.ibtimes.com/bitcoin-really-money-economics-professor-says-no-landmark-criminal-case-2375801

Which way will she be told to rule??


In other news, Bitcoin is on a streak at the minute having jumped 21% in 4 days

Increasingly, bitcoin’s price variations are correlated with macroeconomic trends in China. These trends tell us that China still fears a deflation.

And bitcoin is perceived as an alternative asset class for many people in China. Similarly, the Chinese government cloud cracked down on peer-to-peer lending, forcing lenders to invest in bitcoins.

Other than China, there are reasons to be optimistic about bitcoin right now. In late 2015, many bitcoin companies started arguing in favor of a bitcoin fork to increase the transaction processing capacity. It led to a very ambitious roadmap for the original Bitcoin Core project.

In the coming months, many Bitcoin Core updates are going to make bitcoin and the bitcoin blockchain more robust and more future proof. I’m particularly excited about lightning networks — these networks would make it possible to send bitcoins in seconds. It would turn bitcoin into a viable alternative to existing payment networks.

http://techcrunch.com/2016/05/30/bitcoin-price-jumps-21-percent-over-4-days-reaching-a-21-month-high/

Wheety

Hang on, all he really did was sell Bit coins. It's none of his business what the buyer was going to do with it, even if they told him.

Francie Barrett

All Bitcoin discussion should really go into the gambling forum. It has nothing to do with investing.

EagererBeaver

Wheety wrote: »

Hang on, all he really did was sell Bit coins. It's none of his business what the buyer was going to do with it, even if they told him.

That's not really how it works.

Austria!

Francie Barrett wrote: »

All Bitcoin discussion should really go into the gambling forum. It has nothing to do with investing.

Investing is gambling.

Roonbox

Francie Barrett wrote: »

All Bitcoin discussion should really go into the gambling forum. It has nothing to do with investing.

Disagree.
It is extremely volatile but is in slowly legitimizing itself in finance.

imitation

I looked for a few more articles, because the linked one is a bit light on the details. It does seem the FBI are prosecuting them for money laundering, but fundamentally what they did was ask a some guys for bitcoins and say they were going to do some illegal things. To me that in itself seems really flimsy.

Seems bizarre that the counter case is that bitcoin is not money, rather than knowing what the money is used for, but I guess it passes for law. I know things like rico are practically at the polices whim in the US too so I guess its not too shocking.

Moral of the story is, if your selling bitcoin and a buyer who just won't shut up about his nefarious plan your bitcoin comes comes along, pass ! Especially if his hat is making strange whirring noises and he offers a good rate.

J Mysterio

Is it not entrapment anyway?

Francie Barrett

Austria! wrote: »

Investing is gambling.

No it's not.

Warren Buffett gave testimony in front of the FCIC a few years back. He was specifically asked about the difference in speculation, gambling, and investing. He clearly draws a distinction.

http://dericbownds.net/uploaded_images/Buffett_FCIC_transcript.pdf

Interviewer:
I’d be interested in, you know, what you think speculation is as opposed to investing which you’ve written about and also what you think excess speculation or excess risk is in that context.

Warren Buffett:
It’s a tricky definition, you know, it’s like pornography (laughs) the famous quote and all that, but I look at it in terms of the intent of the person engaging in the transaction. And an investment operation, and that’s not the way Graham defines it in his book, but an investment operation in my view is one where you look to the asset itself to determine your decision to lay out some money now to get some more money back later on. So you look to the apartment house, you look to the stock, you look to the farm in terms of what that will produce. And you don’t really care whether there’s a quote under it all. You are basically committing some funds now to get more funds later on through the operation of the asset.

Speculation, I would define, as much more focused on the price action of the stock, particularly that you buy or the indexed future or something of the sort. Because you are not really, you are counting on, for whatever factors, could be quarterly earnings, could be up or it’s going to split or whatever it may be or increase the dividend, but you are not looking to the asset itself. And I say the real test of how you, what you’re doing is whether you care whether the markets are open. When I buy a stock, I don’t care whether they close the stock market tomorrow for a couple of years because I’m looking to the business, Coca-Cola or whatever it may be to produce returns for me in the future from the business. Now if I care whether the stock market is open tomorrow then I say to some extent I’m speculating because I’m thinking about whether the price is going to up tomorrow or not. I don’t know where the price is going to go.

And then gambling I would define as engaging in a transaction which doesn’t need to be part of the system. I mean, if I want to bet on a football game, you know, the football game’s operation is not dependent on whether I bet or not. Now, if I want to bet on October wheat or something of the sort people have to raise wheat and when they plant it they don’t know what the price is going be later on. So you need activity on the other side of that and who may be speculating on it but it is not an artificial transaction that has no necessity for existing in an economic framework. And the gambling propensity with people is huge. I mean, you took a, you know, some terrible sand out in the west about 100 years ago and you created, you know, huge industry with people flying thousands of miles to do things which are mathematically unintelligent, you know. Now that is, shows something in mankind that has a strong, strong behavioral, has a strong behavioral aspect to it and think how much easier it is, you know, to sit there in front of a computer and have the same amount of fun without, you know, getting on a plane and going a 1,000 miles and having to make reservations and do all that sort of thing. So with this propensity to gamble encouraged incidentally by the state with lotteries, you know, with terrible odds attached to them, people don’t have to be trained to want to gamble in this country but they, they have this instinct, a great many people. They’re encouraged when they see some successes around, that’s why the bells and whistles go off in the casino when somebody hits a jackpot, you know. So, you know, you have all these things pushing to that including governmental urging to buy lottery tickets and all that sort of thing. And now you’ve got a vehicle like, you know, S&P futures or something where you can go in and out and where Congress has granted particularly favorable tax treatment to you if you win. I mean, you can be in for ten seconds and have 60% long term gain which I regard as, you know, extraordinary. But it exists.

That’s all I know about gambling, actually speculation (laughs) but I do know it when I see it.

Bitcoin is about the worst thing anyone could speculate in. Unlike a physical commodity like pork bellies or gold (which do have intrinsic value, even if it's hard to establish) - Bitcoin has no intrinsic value whatsoever. It's actually beyond belief that anyone is willing to hand over money or real assets for nothing.

When the dust settles on Bitcoin in 10 years time, I am certain it will become a case study for mania's in markets and ponzi schemes.

Roonbox

Bitcoin is about the worst thing anyone could speculate in. Unlike a physical commodity like pork bellies or gold (which do have intrinsic value, even if it's hard to establish) - Bitcoin has no intrinsic value whatsoever. It's actually beyond belief that anyone is willing to hand over money or real assets for nothing.

When the dust settles on Bitcoin in 10 years time, I am certain it will become a case study for mania's in markets and ponzi schemes.

You may be right, but I think it has the potential to turn into a HUGH bubble first.

Francie Barrett

I am not saying speculation is bad, you should just realise the difference. For example, I own shares in one of the world's largest timber/paper companies. The reason I bought it was because the prices for timber/paper is at a generational low. Even if the company is making buttons today, if prices were ever to recover moderately, the stock will go through the roof.

Even if the reasoning is sound, quite clearly, I am speculating here. I have no idea what the price of timber/paper will be in a year or two from now, I am just making an educated guess that it will go up.

Roonbox

Francie Barrett wrote: »

I am not saying speculation is bad, you should just realise the difference. For example, I own shares in one of the world's largest timber/paper companies. The reason I bought it was because the prices for timber/paper is at a generational low. Even if the company is making buttons today, if prices were ever to recover moderately, the stock will go through the roof.

Even if the reasoning is sound, quite clearly, I am speculating here. I have no idea what the price of timber/paper will be in a year or two from now, I am just making an educated guess that it will go up.

I think the speculation with Bitcoin lies in the belief that fiat currencies are doomed and that Bitcoin will be the Modern day Gold.

newacc2015

Wheety wrote: »

Hang on, all he really did was sell Bit coins. It's none of his business what the buyer was going to do with it, even if they told him.

He was selling them to facilitate a criminal activity. Which is a crime. Would you have no issue with an Irish bank facilitating money laundering of a criminal or terrorist organisation?

Second Toughest in_the Freshers

J Mysterio wrote: »

Is it not entrapment anyway?

http://m.imdb.com/title/tt0137494/quotes?qt=qt0319602

Mint Aero

Been investing heavily in alt coins such as dbic and making a mint at it.

Esel

Mint Aero wrote: »

Been investing heavily in alt coins such as dbic and making a mint at it.

Have you cashed out yet? If not, you haven't made anything.

Mint Aero

Esel wrote: »

Have you cashed out yet? If not, you haven't made anything.

Made a mint babe made a mint. You jel?

26000 Elephants

Mint Aero wrote: »

Made a mint babe made a mint. You jel?

You are the quintessential alt-coin guy. Bravo!! :rolleyes::rolleyes::rolleyes::rolleyes:

BrokenArrows

Money Laundering Defintion - the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

All he currently did was sell a product to someone who claimed they would exchange that product for another illegal product. I dont consider that money laundering.

It might be money laundering if they told him that they were buying his bitcoins with money they gained from selling stolen credit cards.

In fact what he did was the exact opposite of money laundering. He convered legal money into illegal money.

Roonbox

Bitcoin on an absolute rip over the past week. Back at levels not seen since 2014

26000 Elephants

Roonbox wrote: »

Bitcoin on an absolute rip over the past week. Back at levels not seen since 2014

God knows why. the creeps running it are too interested in fighting each other than making it a realistic form of digital cash.

Lets see how DAO shakes out.

alb

26000 Elephants wrote: »

God knows why.

Yuan is devaluing. Bitcoin is back in a bull market this year. The reward halving is 5 weeks away, this was always likely to be an event used by whales for pump if nothing else. New media hype cycle of "bitcoin is back" is starting now so who knows how long it will run up for.

26000 Elephants wrote: »

the creeps running it are too interested in fighting each other than making it a realistic form of digital cash.

Bitcoin will continue to be what the economic majority want it to be.

26000 Elephants wrote: »

Lets see how DAO shakes out.

I'm short ETH, that hype cycle is coming to an end.