KOL085 | The History, Meaning, and Future of Legal Tender (Crypto-Currency Conference, Atlanta, 2013)

Kinsella on Liberty Podcast, Episode 085 Relevant links at KOL274 | Nobody Owns Bitcoin (PFS 2019). See also: Bitcoin Confiscation vs. Gold Confiscation This is the audio (from my iPhone) of my talk “The History, Meaning, and Future of Legal Tender,” from the Crypto-Currency Conference: Bitcoin and the Future of Money (Atlanta, Oct. 5, 2013). Slides below. Video/professional audio to be released later. Pix here and here. https://youtu.be/myTq7ydbYO8 Update: Video is available here (BAD LINK)   Transcript below. Update: See also Bitcoin Magazine's: OCTOBER 2013 CRYPTO-CURRENCY CONFERENCE PREVIEW: On October 4 through 5, Atlanta, Georgia will host the 2013 Crypto-currency Conference: Bitcoin and the Future of Money. Bitcoin Magazine is proud to serve as a sponsor alongside of Let’s Talk Bitcoin, The Bitcoin Foundation, Students for Liberty, FEE, and Atlanta Bitcoin of this conference spearheaded by Jeffrey Tucker, Executive Editor of Laissez Faire Club and Laissez Faire Books, Distinguished Fellow for the Foundation for Economic Education, and Research Fellow of the Action Institute. The purpose of the conference will be to connect monetary economists, legal theorists, banking pundits, code-slinging visionaries, miners, and payment-systems analysts to shed light on the rise of Bitcoin. As Bitcoin is not just a currency but a movement towards greater economic freedom the 2013 Crypto-Conference will address the following questions: What does the success of Bitcoin imply for the theory, practice, and future of money and payment systems? How can we account for the sheer implausibility of Bitcoin’s rise? What does its emergence imply for the prospects of nationalized systems of money and the future of human liberty and commerce? Will Bitcoin go the way of most innovations and fall prey to government’s dead hand of regulation and strangulation? The Conference team hopes to shed light on how Bitcoin, in contrast to most currencies, has in fact increased in value over time. Over the past 100 years, the value of money has fallen to carry only about 5 of its purchasing power. As a decentralized, digital currency, Bitcoin is not beholden to a central bank and has emerged as a solution to bypass fiat money. The speed and ease of transaction makes the crypto-standard stronger than the gold standards. The Conference will open with a Friday night reception at the office of BitPay, Inc., one of the lead Bitcoin payment processing companies, where guests will hear from musician Tatiana Moroz who as a guitarist and songwriter sings about human liberty. On Saturday morning, Jeffrey Tucker will provide the keynote address, “A New Currency for the Digital Age,” at the The Twelve Hotel in Atlantic Station, a post-industrial hub of Atlanta. Panels will include discussions of Money and Freedom, Cryptography and Contracts, Merchantcraft, and Future Development. Speakers include Tony Gallippi (CEO, BitPay) and Stephen Pair (CTO, BitPay), Stephen Kinsella (Executive Editor, Libertarian Papers), Doug French (Senior Editor, Laissez Faire Club), Michael Goldstein (Co-Founder, The Mises Circle), Peter Surda (Author, Economics of Bitcoin), Charlie Schrem (CEO, BitInstant), Charles Hoskinson (CEO, Invictus Innovations Incorporated), Daniel Larimer (CTO, Invictus Innovations Incorporated), Cathy Reisenwitz (Writer and Political Commentator, Reason Magazine), Adam B. Levine (Editor in Chief, Let’s Talk Bitcoin), Tuur Demeester (Author, MacroTrends), Daniel Krawisz (Libertarian Activist). The evening will conclude with a cocktail reception featuring Austin Craig and Beccy Bingham’s story, “Life on Bitcoin.” Austin and Becky as newlyweds took the challenges of living for 90 days on Bitcoin alone and will share of their journey which is shortly coming to a close. THE REST OF THE YEAR: BITCOIN CONVENTION ROUNDUP: Crypto-Currency Conference – this conference will be more focused on philosophical issues than the others, with speakers like Laissez Faire Books’ Jeffrey Tucker, libertarian legal theorist Stephan Kinsella and the Mises Institute’s Doug French, as well as the Bitcoin economist Peter Surda, Adam Levine and BitPay’s Tony Gallippi. The conference will take place on October 5 in Atlanta. *** Also: in the WSJ article Tax Plan May Hurt Bitcoin, the article notes that legal tender laws are, in fact, jeopardizing BTC. Bitcoins are now classified by the IRS as "property" "instead of" as legal tender money, meaning capital gains taxes are owed on transactions. I mentioned this danger in my talk; a similar problem afflicts the re-adoption of gold or silver as money.  But as I noted in the Q&A to my talk, I am not persuaded that bitcoins are ownable resources—things subject to property rights. The IRS here assumes that something is either money or property. This is one danger of BTC advocates using the language of property rights to describe bitcoins. I would argue that bitcoins are not legally owned and thus capital gains taxes are not applicable—or at least, this is one argument the target of a government tax evasion suit might want to use. Update: Swiss Tax Authorities Confirm that Bitcoin is VAT-free in Switzerland: Bitcoin Association Switzerland reports that, according to the Swiss Federal Tax Administration, no VAT applies to bitcoin in Switzerland. The transfer of bitcoin doesn’t constitute delivery of goods or services, and therefore it’s not subject to VAT. Update:  for more on whether bitcoin is ownable property, see this Facebook thread. And see: Tokyo court says bitcoins are not ownable. See also: FinCEN Rules Commodity-Backed Token Services are Money Transmitters Also: "in the WSJ article Tax Plan May Hurt Bitcoin, the article notes that legal tender laws are, in fact, jeopardizing BTC. Bitcoins are now classified by the IRS as “property” “instead of” as legal tender money, meaning capital gains taxes are owed on transactions. I mentioned this danger in my talk; a similar problem afflicts the re-adoption of gold or silver as money.  But as I noted in the Q&A to my talk, I am not persuaded that bitcoins are ownable resources—things subject to property rights. The IRS here assumes that something is either money or property. This is one danger of BTC advocates using the language of property rights to describe bitcoins. I would argue that bitcoins are not legally owned and thus capital gains taxes are not applicable—or at least, this is one argument the target of a government tax evasion suit might want to use." KOL085 | The History, Meaning, and Future of Legal Tender ] See also: Bitcoin Is Officially a Commodity, According to U.S. Regulator; KOL191 | The Economy with Albert Lu: Can You Own Bitcoin? (1/3) Also: SEC: US Securities Laws 'May Apply' to Token Sales   TRANSCRIPT 00:00:10 DOUG FRENCH: Our next speaker has done nothing less than pathbreaking work in the area of intellectual property.  He probably could be considered the “Satoshi of IT” if you will.  He’s an American intellectual property lawyer, a libertarian legal theorist.  He’s created the website The Libertarian Standard.  He’s created the academic journal, the Libertarian Papers.  He’s written a number of books, including my favorite, Louisiana Civil Law Dictionary.  But probably he is best known for a book called – that really turned the libertarian world on its ear.  This argument continues on.  It rages on.  He continues to debate any and all comers online.  But he is – well, this is the perfect time in the cyber world to have a lawyer in the house.  And he is our lawyer in the house.  Please help me welcome Stephan Kinsella. 00:01:17 [clapping] 00:01:23 STEPHAN KINSELLA: Thanks very much Doug, and I’m really glad to be here.  I just flew in from Houston.  I would really like to thank Jeff for giving me the chance to speak on a non-IP topic, which I do enjoy.  So my topic today is on legal tender.  I’m going to explain briefly how I recently got interested in this topic and then go into some background.  When I was in law school, in 1989 or so, I was clerking at a firm in Baton Rouge.  I was asked by the partner to research the question of whether it was legal or illegal to refuse to take a payment of cash under legal tender law. 00:02:01 So if you owe someone a million dollars and you bring them a briefcase full of cash, can they say, “I refuse to accept that offer.  I want you to write me a check instead.  So I started researching what is legal tender.  If you look at your dollar bills, it will say this note is legal tender for all debts public and private.  It’s sort of a mysterious meaning.  What exactly does that mean?  How much money do you have to pay to satisfy a debt? 00:02:25 So I started getting interested in it.  A couple of years later, I was in graduate school in law in London, and I looked at the British pound notes and they have other language which says, Bank of England.  I promise to pay the bearer on demand the sum of 5 pounds or 10 pounds or whatever the note is.  So, like a smartass, I walk down to the Bank of England one day, in the middle of the financial district, with a backpack.  I was dressed like a student, and I walked in the front door and I asked.  I said, “Can I redeem this for five pounds of whatever it is it’s five pounds of?”  And they said, “Do you have an appointment?”  I said, “No”.  So they sent me out, and they said you have to have an appointment to come into the Bank of England. 00:03:06 So they said you might want to visit the Bank of England Museum around the corner.   So I walked around the corner.  I went to the Bank of England Museum.  I was the only guy there, and I started asking the curator these questions.  And he went to the back,