Bitcoin, Is It Money or Not Money?

Business / Tech
Hong Kong

There are many places where Bitcoin is accepted as currency. But does that make it money? A Florida criminal case may be the path to deciding that. In 2014, a Florida programmer was arrested for money laundering. An FBI sting operation had several agents come to him to convert money to $1500 in Bitcoin, which they told him would be used to buy stolen credit cards. The man’s lawyers are trying to get the case dismissed on the basis that, under Florida law, Bitcoin ought not to be considered real money.

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.

In his testimony for the defense, economics professor Charles Evans put forth an interesting theory.

“Basically, it’s poker chips that people are willing to buy from you,” Evans said, according to a report by the Miami Herald, comparing it to the value collectors assign to comic books or baseball cards.

His testimony included this idea:

Evans, who says he is the first expert witness in a U.S. court case to have his fee paid in Bitcoin, told the court that because no central bank or government backs Bitcoin, regulation around the cryptocurrency remains messy; and the IRS believes Bitcoin transactions are akin to barter.

In contrast, the prosecutor holds a different view.

Prosecutor Tom Haggerty argued that because there are numerous places where people can now use bitcoins to pay for products or services — such as shops, restaurants and even cosmetic surgery clinics — it should be considered the same as cash. “You don’t purchase a hamburger with a comic book,” Haggerty said. “You usually purchase it with cash, or in this case, a bitcoin.”

Bitcoin is only one cryptocurrency — digital funding using encryption to create the units and verify transfer, without the need for a middle man such as a central bank.  Being anonymous and decentralized makes it attractive for transactions, but that’s also what has attracted criminal elements to it.  The results of this case could have far reaching implications for Bitcoin, and for other forms of cryptocurrency, as well.

What are your thoughts? Let us know in the comments below, or on Google+, Twitter, or Facebook.

  Source: International Business Times
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