-
As I continue to explore
-BitCoin, I've starting to wonder
-what properties the system have, and how it will be affected by laws
-and regulations here in Norway. Here are some random notes.
-
-
One interesting thing to note is that since the transactions are
-verified using a peer to peer network, all details about a transaction
-is known to everyone. This means that if a BitCoin address has been
-published like I did with mine in my initial post about BitCoin, it is
-possible for everyone to see how many BitCoins have been transfered to
-that address. There is even a web service to look at the details for
-all transactions. There I can see that my address
-15oWEoG9dUPovwmUL9KWAnYRtNJEkP1u1b
-have received 16.06 Bitcoin, the
-1LfdGnGuWkpSJgbQySxxCWhv8MHqvwst3
-address of Simon Phipps have received 181.97 BitCoin and the address
-1MCwBbhNGp5hRm5rC1Aims2YFRe2SXPYKt
-of EFF have received 2447.38 BitCoins so far. Thank you to each and
-every one of you that donated bitcoins to support my activity. The
-fact that anyone can see how much money was transfered to a given
-address make it more obvious why the BitCoin community recommend to
-generate and hand out a new address for each transaction. I'm told
-there is no way to track which addresses belong to a given person or
-organisation without the person or organisation revealing it
-themselves, as Simon, EFF and I have done.
-
-
In Norway, and in most other countries, there are laws and
-regulations limiting how much money one can transfer across the border
-without declaring it. There are money laundering, tax and accounting
-laws and regulations I would expect to apply to the use of BitCoin.
-If the Skolelinux foundation
-(SLX
-Debian Labs) were to accept donations in BitCoin in addition to
-normal bank transfers like EFF is doing, how should this be accounted?
-Given that it is impossible to know if money can across the border or
-not, should everything or nothing be declared? What exchange rate
-should be used when calculating taxes? Would receivers have to pay
-income tax if the foundation were to pay Skolelinux contributors in
-BitCoin? I have no idea, but it would be interesting to know.
-
-
For a currency to be useful and successful, it must be trusted and
-accepted by a lot of users. It must be possible to get easy access to
-the currency (as a wage or using currency exchanges), and it must be
-easy to spend it. At the moment BitCoin seem fairly easy to get
-access to, but there are very few places to spend it. I am not really
-a regular user of any of the vendor types currently accepting BitCoin,
-so I wonder when my kind of shop would start accepting BitCoins. I
-would like to buy electronics, travels and subway tickets, not herbs
-and books. :) The currency is young, and this will improve over time
-if it become popular, but I suspect regular banks will start to lobby
-to get BitCoin declared illegal if it become popular. I'm sure they
-will claim it is helping fund terrorism and money laundering (which
-probably would be true, as is any currency in existence), but I
-believe the problems should be solved elsewhere and not by blaming
-currencies.
-
-
The process of creating new BitCoins is called mining, and it is
-CPU intensive process that depend on a bit of luck as well (as one is
-competing against all the other miners currently spending CPU cycles
-to see which one get the next lump of cash). The "winner" get 50
-BitCoin when this happen. Yesterday I came across the obvious way to
-join forces to increase ones changes of getting at least some coins,
-by coordinating the work on mining BitCoins across several machines
-and people, and sharing the result if one is lucky and get the 50
-BitCoins. Check out
-BitCoin Pool
-if this sounds interesting. I have not had time to try to set up a
-machine to participate there yet, but have seen that running on ones
-own for a few days have not yield any BitCoins througth mining
-yet.
-
-
Update 2010-12-15: Found an interesting
-criticism of bitcoin. Not quite sure how valid it is, but thought
-it was interesting to read. The arguments presented seem to be
-equally valid for gold, which was used as a currency for many years.
-
