It is fascinating to watch institutions try to deal with Bitcoin, an innovation which is designed to ignore current institutions. This piece in the USA Today makes a good effort toward shoving cryptocurrency into a box, where it can be mastered and controlled and ignored in favor of bigger authorities.
The major news is that the IRS will now call Bitcoins an asset if not a currency, one where you’ll pay capital gains if not sales tax.
I loved this chart:
The graphic says, “Unlike the Euro or the dollar, [Bitcoin] is backed by nothing more than its own ability to hold value.
Then, in the orangey bit, it says “Bitcoin…is not backed by gold, silver or any other commodity,” as if this differentiates it from fiat currencies. Then in the green bit they let you off the hook that, well, the USD is just a big packet of fairy dust, too.
Money is always social agreement. With Bitcoin with at least realize that we have no protection in the rule of law. In fiat currencies, we have a threadbare illusion that we have protection in the rule of law.
Which do you prefer?