Why China Wants to Kill Off Bitcoin Motley Fool Last month, the Bank of China warned that the virtual currency was “not a currency in the real meaning of the word,” barring banks from issuing accounts denominated in Bitcoin. Chinese regulators urged businesses to stop working with Bitcoin exchanges …
Why China Wants to Kill Off Bitcoin Motley Fool Last month, the Bank of China warned that the virtual currency was "not a currency in the real meaning of the word," barring banks from issuing accounts denominated in Bitcoin. Chinese regulators urged businesses to stop working with Bitcoin exchanges ...
OVERSTOCK CEO: Amazon Will Be Forced To Start Accepting Bitcoin Business Insider One is that the company immediately swaps out its Bitcoins back to US Dollars once the transaction is complete. Byrne says he’s a Bitcoin believer, but until he has suppliers that accept Bitcoin, there’s no reason to hold onto them. He’d also be …
OVERSTOCK CEO: Amazon Will Be Forced To Start Accepting Bitcoin Business Insider One is that the company immediately swaps out its Bitcoins back to US Dollars once the transaction is complete. Byrne says he's a Bitcoin believer, but until he has suppliers that accept Bitcoin, there's no reason to hold onto them. He'd also be ...
Business InsiderHow Bitcoin Is Like North KoreaBusiness InsiderBest estimates are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another mi…
How Bitcoin Is Like North Korea Business Insider Best estimates are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent ... Bitcoin/USD: Citibank: Rank inequality in bitcoin holdingsiNVEZZ
John Campbell of the Bank, cashier of the Royal Bank of Scotland, c. 1749. A banknote can be seen on the table.
Although the case in question (Crawfurd v. The Royal Bank) happened in the mid-1700s, I think it is highly relevant and bears nicely on the recent controversy surrounding CoinValidation. This post will also be of interest to anyone fascinated by the history and/or theory of money.
While this particular case involved paper banknotes (which arguably are irredeemably flawed) rather than a ‘hard currency’, it still illustrates nicely the rationale behind a decision which impacted a widely used currency at the time. Of primary consideration in this case was how its resolution would affect the usability of the currency (i.e. a facet from which currency largely derives its value).
As we’re probably all aware of by now, CoinValidation’s plan, if successfully implemented, would presumably lead to the blacklisting of some coins based on their past transfer history (e.g. having at some point been sent to/from deep web contraband marketplaces, having been paid as ransom to malware operators like those of CryptoLocker, having been stolen, having been allegedly ‘laundered’, having been associated with scams/ponzis, &c). In effect, this would destroy the fungibility of bitcoins. Some ‘clean’ coins would be easier to spend and transact with, while other ‘less clean’ or downright ‘tainted’ coins would be more difficult to use. Thus we would be left with a difficult-to-navigate and frustrating-to-use system whereby some coins are worth more than others (due to their varying spendability). And this largely defeats the purpose of a currency as a facile medium of exchange in the first place.
The case Hew Crawfurd brought against the Royal Bank of Scotland in 1749 had the potential for similar ramifications.
In 1748, Crawfurd sent two large-denomination banknotes, which he had made marks upon and recorded the serial numbers of, through the mail to an associate. Unfortunately the banknotes were not delivered. After enquiring as to their possible whereabouts with the banks, as well as posting newspaper advertisements, one of the notes eventually turned up rather mysteriously at the Royal Bank, although it wasn’t clear whose hands it had passed through to get there. Based on Crawfurd’s diligent recording and marking of the bills in question, however, there was no question that it was one of the two that were sent. Crawfurd was duly notified of the note’s reappearance.
While Crawfurd was eager to be reimbursed for his loss, his claim put the banks in an unenviable position. After all, they presumably had no knowledge that the banknote now in their possession was ill-begotten. Would it be fair to them to eat the loss? And more importantly, what sort of precedent might this set? Kenneth Reid writes:
“The Banks’ concern is easily understood. If holders of banknotes were vulnerable to infirmities of title of which they knew nothing, then this would indeed be ‘a barr to the circulation’ of notes and hence a threat to the whole idea of paper money. And even if that position could be resisted—even if bona fide holders took an unblemished title—there was the further difficulty of assessing the holder’s state of knowledge. Crawfurd had marked the banknotes and advertised his loss. Must a holder be taken to know this and to realize its significance? ‘If’, the Banks reasoned, ‘the writing upon notes and advertising the numbers in the Publick Prints should be found sufficient to interpel people from receiving such notes in payment it would be a mean of putting an intire stop to the circulation of notes and of opening a door for frauds by malicious and designing persons’” (emphasis mine)
After hearing arguments from both sides of the dispute, judges ultimately decided in favor of the bank. The stated rationale for their decision largely rested on a distinction they made between money and real property, and how the terms of ownership should be established:
“The Judges, he wrote, were unanimous ‘that money is not subject to any vitium reale1; and that it cannot be vindicated from the bona fide possessor, however clear the proof [of] the theft may be’. Accordingly, ‘Mr Crawfurd had no claim to the note in question’. Thus was established the rule of bona fide acquisition of money in Scotland. The decision also relieved the Banks of the concern, raised once more during the litigation, that newspaper advertisement might ‘amount to a sufficient Interpellation to all the World’ as to deprive the recipient of good faith.”
1 ‘an inherent taint or defect in a title to property’
While the decision they penned rested on carefully crafted legalese, it is nonetheless accepted that other, more pragmatic, considerations undoubtedly influenced the judges’ decision. Reid writes:
“Policy issues, as might be expected, were highly prominent in Lord Strichen’s Report. Trade, it was argued for the Banks, rested on the free circulation of money, and free circulation rested in turn on the reliability of notes and coins. If Crawfurd was able to vindicate the banknote, no merchant could risk taking money in payment ‘without being informed of the whole History of it from the Time that it first issued out of the Bank or the Mint till it came to his Hand, which is so apparently absurd, that it seems hardly to merit a Consideration’. And as banknotes would thus be rendered ‘absolutely useless’, this would ‘in a great Measure deprive the Nation of the Benefit of the Banks, which could hardly subsist without the Circulation of their Notes’. It was in vain for Home to object that, just as people continue to buy goods despite the (slight) risk that they might be stolen and subject to vindication, so they would continue to accept money if the risks were the same. If money could be vindicated, counsel for the Bank of Scotland concluded, ‘no Man could be sure, that one Shilling in his pocket was his own, and both Banks might shut their doors’.”
(emphasis mine)
Of course there were probably many other factors at play here. Although Crawfurd was of some means, it’s likely that the bank was able to afford the very best representation in this case. Moreover, in Reid’s research paper (linked below) he even points out that there was a fairly overt conflict of interest between the banks (the issuers of notes) and the judicial system at that time in Scotland. Reid also points out that there was some Roman jurisprudence (a source for many legal arguments in the case) that would seem to have roundly supported Crawfurd’s case rather than that of the bank.
Regardless of whether one ascribes impartiality to the judges in this case, or even whether or not one thinks the case was correctly decided based on previous jurisprudence, there’s little question that the emerging paper currency system would have been greatly imperiled had the case been decided in favor of Crawfurd.
Putting aside the obvious flaws inherent in paper banknotes, which were widely adopted in Scotland after their issuance first began in 1695, they did enable trade and commerce to occur on a previously unprecedented scale, and with less friction than seen with previous monetary systems (i.e. precious metals). In a society without telecommunications, Internet, and cryptocurrencies, the paper banknotes (although low-tech by modern standards) were nonetheless an innovation in the transfer of value within the country.
We’ll never know exactly what would have happened if the judges, by their decision, had abbreviated the fungibility of banknotes, or ‘the absolute currency of money’ as one Scottish legal scholar put it. But it seems likely that they would have thrown the monetary system into disarray, and interrupted a medium for commerce that many had come to rely upon for their wealth and prosperity. Perhaps this would even have been a major setback to the economic development of the country. Certainly this was one major concern that the judges had to take into consideration.
At the time of the decision, some arguments in favor of the bank notably argued that tracking ‘the whole History’ of a given banknote would be so cumbersome to those transacting as to render the whole currency system useless. Ironically, the electronic and highly traceable nature of bitcoin does somewhat (though nowhere near entirely) mitigate this argument. But perhaps the more relevant question for today’s world is whether it is wise to entrust the adjudication of a given monetary unit’s history to some arbitrary entity. The deciders of whether or not a given unit has a ‘clean’ or ‘tainted’ history are given enormous power. Even the Scots arguing this case back in the 1700s recognized the danger this presented, in that it could lead to “opening a door for frauds by malicious and designing persons”.
Now we find ourselves at a similar crossroads as the Scots did… but instead of an intranational paper currency, there is potentially a decentralized, global value transfer protocol at stake. We must ask ourselves whether altering the monetary framework in order to punish lawbreakers and wrongdoers is something worth jeopardizing the very ‘currency of money’ for.
Luckily, in making this choice, we are not wholly subjected to the caprices of some empaneled judges. Ultimately bitcoin is controlled by the people. Ultimately we can vote with our money, in line with our values.
And while actively determining and participating in what may well be the future of money, I sincerely hope we all look to the lessons of the past for guidance.
John Campbell of the Bank, cashier of the Royal Bank of Scotland, c. 1749. A banknote can be seen on the table.
Although the case in question (Crawfurd v. The Royal Bank) happened in the mid-1700s, I think it is highly relevant and bears nicely on the recent controversy surrounding CoinValidation. This post will also be of interest to anyone fascinated by the history and/or theory of money.
While this particular case involved paper banknotes (which arguably are irredeemably flawed) rather than a ‘hard currency’, it still illustrates nicely the rationale behind a decision which impacted a widely used currency at the time. Of primary consideration in this case was how its resolution would affect the usability of the currency (i.e. a facet from which currency largely derives its value).
As we’re probably all aware of by now, CoinValidation’s plan, if successfully implemented, would presumably lead to the blacklisting of some coins based on their past transfer history (e.g. having at some point been sent to/from deep web contraband marketplaces, having been paid as ransom to malware operators like those of CryptoLocker, having been stolen, having been allegedly ‘laundered’, having been associated with scams/ponzis, &c). In effect, this would destroy the fungibility of bitcoins. Some ‘clean’ coins would be easier to spend and transact with, while other ‘less clean’ or downright ‘tainted’ coins would be more difficult to use. Thus we would be left with a difficult-to-navigate and frustrating-to-use system whereby some coins are worth more than others (due to their varying spendability). And this largely defeats the purpose of a currency as a facile medium of exchange in the first place.
The case Hew Crawfurd brought against the Royal Bank of Scotland in 1749 had the potential for similar ramifications.
In 1748, Crawfurd sent two large-denomination banknotes, which he had made marks upon and recorded the serial numbers of, through the mail to an associate. Unfortunately the banknotes were not delivered. After enquiring as to their possible whereabouts with the banks, as well as posting newspaper advertisements, one of the notes eventually turned up rather mysteriously at the Royal Bank, although it wasn’t clear whose hands it had passed through to get there. Based on Crawfurd’s diligent recording and marking of the bills in question, however, there was no question that it was one of the two that were sent. Crawfurd was duly notified of the note’s reappearance.
While Crawfurd was eager to be reimbursed for his loss, his claim put the banks in an unenviable position. After all, they presumably had no knowledge that the banknote now in their possession was ill-begotten. Would it be fair to them to eat the loss? And more importantly, what sort of precedent might this set? Kenneth Reid writes:
“The Banks’ concern is easily understood. If holders of banknotes were vulnerable to infirmities of title of which they knew nothing, then this would indeed be ‘a barr to the circulation’ of notes and hence a threat to the whole idea of paper money. And even if that position could be resisted—even if bona fide holders took an unblemished title—there was the further difficulty of assessing the holder’s state of knowledge. Crawfurd had marked the banknotes and advertised his loss. Must a holder be taken to know this and to realize its significance? ‘If’, the Banks reasoned, ‘the writing upon notes and advertising the numbers in the Publick Prints should be found sufficient to interpel people from receiving such notes in payment it would be a mean of putting an intire stop to the circulation of notes and of opening a door for frauds by malicious and designing persons’” (emphasis mine)
After hearing arguments from both sides of the dispute, judges ultimately decided in favor of the bank. The stated rationale for their decision largely rested on a distinction they made between money and real property, and how the terms of ownership should be established:
“The Judges, he wrote, were unanimous ‘that money is not subject to any vitium reale1; and that it cannot be vindicated from the bona fide possessor, however clear the proof [of] the theft may be’. Accordingly, ‘Mr Crawfurd had no claim to the note in question’. Thus was established the rule of bona fide acquisition of money in Scotland. The decision also relieved the Banks of the concern, raised once more during the litigation, that newspaper advertisement might ‘amount to a sufficient Interpellation to all the World’ as to deprive the recipient of good faith.”
1 ‘an inherent taint or defect in a title to property’
While the decision they penned rested on carefully crafted legalese, it is nonetheless accepted that other, more pragmatic, considerations undoubtedly influenced the judges’ decision. Reid writes:
“Policy issues, as might be expected, were highly prominent in Lord Strichen’s Report. Trade, it was argued for the Banks, rested on the free circulation of money, and free circulation rested in turn on the reliability of notes and coins. If Crawfurd was able to vindicate the banknote, no merchant could risk taking money in payment ‘without being informed of the whole History of it from the Time that it first issued out of the Bank or the Mint till it came to his Hand, which is so apparently absurd, that it seems hardly to merit a Consideration’. And as banknotes would thus be rendered ‘absolutely useless’, this would ‘in a great Measure deprive the Nation of the Benefit of the Banks, which could hardly subsist without the Circulation of their Notes’. It was in vain for Home to object that, just as people continue to buy goods despite the (slight) risk that they might be stolen and subject to vindication, so they would continue to accept money if the risks were the same. If money could be vindicated, counsel for the Bank of Scotland concluded, ‘no Man could be sure, that one Shilling in his pocket was his own, and both Banks might shut their doors’.”
(emphasis mine)
Of course there were probably many other factors at play here. Although Crawfurd was of some means, it’s likely that the bank was able to afford the very best representation in this case. Moreover, in Reid’s research paper (linked below) he even points out that there was a fairly overt conflict of interest between the banks (the issuers of notes) and the judicial system at that time in Scotland. Reid also points out that there was some Roman jurisprudence (a source for many legal arguments in the case) that would seem to have roundly supported Crawfurd’s case rather than that of the bank.
Regardless of whether one ascribes impartiality to the judges in this case, or even whether or not one thinks the case was correctly decided based on previous jurisprudence, there’s little question that the emerging paper currency system would have been greatly imperiled had the case been decided in favor of Crawfurd.
Putting aside the obvious flaws inherent in paper banknotes, which were widely adopted in Scotland after their issuance first began in 1695, they did enable trade and commerce to occur on a previously unprecedented scale, and with less friction than seen with previous monetary systems (i.e. precious metals). In a society without telecommunications, Internet, and cryptocurrencies, the paper banknotes (although low-tech by modern standards) were nonetheless an innovation in the transfer of value within the country.
We’ll never know exactly what would have happened if the judges, by their decision, had abbreviated the fungibility of banknotes, or ‘the absolute currency of money’ as one Scottish legal scholar put it. But it seems likely that they would have thrown the monetary system into disarray, and interrupted a medium for commerce that many had come to rely upon for their wealth and prosperity. Perhaps this would even have been a major setback to the economic development of the country. Certainly this was one major concern that the judges had to take into consideration.
At the time of the decision, some arguments in favor of the bank notably argued that tracking ‘the whole History’ of a given banknote would be so cumbersome to those transacting as to render the whole currency system useless. Ironically, the electronic and highly traceable nature of bitcoin does somewhat (though nowhere near entirely) mitigate this argument. But perhaps the more relevant question for today’s world is whether it is wise to entrust the adjudication of a given monetary unit’s history to some arbitrary entity. The deciders of whether or not a given unit has a ‘clean’ or ‘tainted’ history are given enormous power. Even the Scots arguing this case back in the 1700s recognized the danger this presented, in that it could lead to “opening a door for frauds by malicious and designing persons”.
Now we find ourselves at a similar crossroads as the Scots did… but instead of an intranational paper currency, there is potentially a decentralized, global value transfer protocol at stake. We must ask ourselves whether altering the monetary framework in order to punish lawbreakers and wrongdoers is something worth jeopardizing the very ‘currency of money’ for.
Luckily, in making this choice, we are not wholly subjected to the caprices of some empaneled judges. Ultimately bitcoin is controlled by the people. Ultimately we can vote with our money, in line with our values.
And while actively determining and participating in what may well be the future of money, I sincerely hope we all look to the lessons of the past for guidance.
Four Ways to Satisfy Your Appetite With Bitcoin CoinDesk Much is made of bitcoin’s earth-shattering potential to revolutionise the way we use and even perceive money. Invented after the global crash of 2007, the cryptocurrency seems to offer an as yet ambiguous alternative to the old pre-crash world. But, if …
Four Ways to Satisfy Your Appetite With Bitcoin CoinDesk Much is made of bitcoin's earth-shattering potential to revolutionise the way we use and even perceive money. Invented after the global crash of 2007, the cryptocurrency seems to offer an as yet ambiguous alternative to the old pre-crash world. But, if ...
How to use your bitcoins in pursuit of the greatest pastime ever conceived: eating.
Much is made of bitcoin’s earth-shattering potential to revolutionise the way we use and even perceive money.
Invented after the global crash of 2007, the cryptocurrency seems to offer an as yet ambiguous alternative to the old pre-crash world.
But, if we were to imagine these serious conversations being had by serious people with very serious and solemn faces, you would find me loitering on the other side of the room beside the canapés desperately stuffing as many into my face as possible.
Yes, your funny money sounds great, but can I eat it? At the very least, can I use it to satiate my huge and ever-present hunger?
Thankfully yes, here are four of the best ways to eat with bitcoin.
1. Eating on the street
If, while walking around London’s Shoreditch area, you find yourself overcome with an animalistic yearning for a piece of meat hugged closely by two bits of bread, there are many restaurants and pubs to choose from.
But if you’re flying the flag of the good ship bitcoin, there’s only one place for you: Burger Bear. Probably the first street vendor in the UK to accept bitcoin, Burger Bear serves artisanal burgers and has been taking bitcoin payments since late November. “The best burger in the world” is how one bitcoiner, Ryan Holder, described his purchase.
There’s nothing finer than fresh produce straight from the farm. Whether it be tasty peppers, glistening strawberries or just fresh greens, buying straight from the source always beats going to the supermarkets.
If you are lucky enough to live in the Provo, Utah, the La Nay Ferme farm offers “naturally grown fruits and vegetables” you can buy with bitcoin. You can either join their CSA (community supported agriculture project), purchase a weekly share of their produce, or simply take your pick from their fresh selection each week.
If you’re the type of bitcoiner who’s inclined to order a takeaway instead of venturing beyond your front door (or, god-forbid, into the kitchen), there is also hope for you.
American bitcoiners probably have it easiest, with restaurant delivery network Foodler, which works with 12,000 restaurants, accepting bitcoins since April.
Most of their purchases are in San Francisco and Washington DC. Although a future utopia where you can order any takeout you like with bitcoin isn’t fully realised yet, we’re getting there slowly.
4. Survive the zombie apocalypse
Artisanal burgers, fresh farm produce and home delivery are all great right now. But when the zombie apocalypse comes a-knocking, they’ll be little use to you (although a restaurant willing to battle the undead to bring hot curry to your front door would probably do good business in the apocalypse).
When the day of judgement comes, you’ll want to make sure you’re prepared. That’s where SurvivalFood.com comes in. It accepts bitcoin and sells delights like the “Mountain House Turkey Tetrazzini Pouch” and the “Bandito Scramble Eggs Potatoes Breakfast Pouch”, both of which have a shelf life of seven years.
So, if corpses begin bursting from their graves, you can rest easy knowing that bitcoin helped keep you fed and happy.
KOMO NewsSpokane bar welcomes Bitcoin, giving digital currency a tryoutThe Spokesman ReviewIn North Idaho, at least a half-dozen companies are doing the same, testing whether customers are ready for the Bitcoin option, a virtual currency system that it…
The founder of homeless charity Sean’s Outpost plans to raise 1,000 BTC in an epic four-month run.
Bitcoin donations have helped Sean’s Outpost, a homeless outreach centre in Pensacola, Florida, to achieve outsized success this year.
Donations flooded in when its founder, Jason King, asked for bitcoin contributions back in March. As 2013 drew to a close, he announced:
“We served 30,000 meals in 2013 and we were able to make a downpayment and pay off the first year’s mortgage for Satoshi’s Forest, our nine-acre homeless sanctuary. We got a lot done in 2013 for a new charity.”
Sean’s Outpost raised more than 200 BTC this year from donations, according to King. Now the homelessness activist wants to contribute to the bitcoin community in his own way, by running 5,172 km from Miami to San Francisco to raise funding and awareness about both bitcoin and homelessness.
He said: “It’s basically running a marathon a day, every day, for four months.”
Long-distance enthusiast
King is a long-distance running enthusiast who says he has run “several hundred” kilometres before, although this would be the longest run he’s attempted.
“We have guys who got off the street because of bitcoin.”
He will set off from the North American Bitcoin Conference which ends on 26th January, in Miami, where the starting gun will be fired.
King will then make his way to Austin, which is 2,166 km or a 19-hour drive away, to speak at the Texas Bitcoin Conference on 6th March.
His support crew for the trip will consist of his wife and three children, who will drive alongside him in the family campervan.
“We’re working on the route right now. We’ll be planning bitcoin meetups, so anyone can stop by and meet up. We’ll have information for people who don’t know anything about bitcoin.”
King added that he hasn’t decided on the finish line yet, but it would be one of the many bitcoin hangouts in San Francisco.
Without a hitch
Given his four month absence from Sean’s Outpost, how will the charity fare without its founder’s presence?
King stressed that although the media spotlight has been focused on him this year, the charity has a full-time staff of five and a team of 10 volunteers that will keep it running smoothly, no pun intended.
“It should run without a hitch without me there. I’ll still be helping out, answering e-mails, but everything can’t just go away because Jason King’s not there.”
King has set the audacious goal of raising 1,000 BTC over the course of the run, he said: “I know it’s a lot to expect in four months, but homelessness is a big problem.”
Sean’s Outpost currently works with more than 400 homeless people in Pensacola, a city with a population of about 461,000. Some of these people have remained ambivalent about bitcoin, while others have embraced the cryptocurrency. King said:
“We have guys who got really into bitcoin. They’re on reddit and forums all the time. We have guys who got off the street because of bitcoin.”
Sean Dugas
According to King, of the 200 BTC raised by his charity this year, almost all of it has been spent. Sean’s Outpost has, however, maintained a reserve fund of 30 BTC, which it intends to hold as an investment.
The continuing media attention on the organisation, which is named after King’s “best friend” Sean Dugas, who was murdered in 2012, has made King uncomfortable, although he is trying to capitalise on it for his activism. He is working on opening up Sean’s Outposts in other cities.
“[The media attention] has been a little awkward, because I like to focus on the work I do. But I’m asking people all over the world to believe in what we’re doing, so communicating back is an important part of the relationship.”
CoinDesk previously reported on Justas, a “voluntarily” homeless man in Spain who uses bitcoin and other technology tools to sustain his way of life.
Federal laws prohibit credit card payments, so all Colorado’s marijuana must be purchased in cash – or bitcoin.
At least one marijuana dispensary in Colorado has reportedly begun accepting bitcoin.
Colorado’s decision to legalize cannabis has been filling headlines for weeks, and the hype is still going strong.
Investors have been piling up in the marijuana market, ranging from reputable medicinal marijuana companies to highly speculative penny stocks.
The general public seems to be very interested indeed – outside some dispensaries the queues of pot lovers are incredibly large, resembling the lines frequently formed in front of Apple Stores following an iPhone launch.
However, there are a number of problems. Demand has been so strong that many dispensaries are having trouble getting enough marijuana to sell, although this is likely a temporary issue.
Banks playing it safe
A somewhat bigger problem for dispensaries lurks in federal law. They cannot accept credit card payments, so all purchases must be in cash – or bitcoin.
“Federal law has forced marijuana dispensaries to accept cash, and cash only – but bitcoin is a tempting alternative.”
Bloomberg’s Matt Miller believes that this is because banks are simply not willing to enter the market, which is understandable.
Most US credit card companies are headquartered in Delaware rather than Colorado – and cannabis is still very much illegal in Joe Biden’s home state.
Banks and credit card companies are playing it safe. They must comply with federal legislation and although it might be possible to come up with a workaround, they do not appear interested at this point.
Federal law has forced dispensaries to accept cash, and cash only – but bitcoin is a tempting alternative. Anonymity does not matter, since recreational marijuana is legal in Colorado, but with no credit cards in the mix, it is practically the only alternative.
Sales of recreational marijuana in Colorado are reportedly exceeding $5m a week, and banks simply cannot enter the fray until regulators give them the green light.
Some pundits are comparing Colorado’s decision to legalize marijuana to the demise of the 18th Amendment, which prohibited sales of alcohol in the US back in the roaring twenties.
When the 18th Amendment was enacted, the government lost a fair slice of tax revenue, but the prohibition also loosely coincided with the introduction of federal income tax in 1913. In other words, the government could afford to lose a bit of revenue in order to appease the temperance movement.
The prohibition did not work, as it forced millions of Americans to break the law on a daily basis, becoming scofflaws. It also ushered in a golden era for organized criminals running rum from the Caribbean, whisky from Canada or distilling potentially deadly bathtub ‘moonshine’.
The 18th Amendment was repealed at a time when the US needed as much tax revenue as possible, just as the country was starting to emerge from the Great Depression.
Bitcoin’s critics like to point out that digital currencies are often used for illicit transactions, like buying illegal drugs. This is, of course, the case with practically every currency on the planet.
Drugs are the reason why the largest denomination of the US dollar is the Ben Franklin-themed $100 bill.The Nixon administration discontinued all larger denominations in 1969, arguing that the move would make it more difficult for drug traffickers to transport and launder their profits.
Bitcoin boom
There are about 350 licensed dispensaries in Colorado, and many analysts believe annual marijuana revenue could be as much as $500m, which is relatively high for a population of 5.2 million people (no pun intended).
The National Cannabis Industry Association predicts medical marijuana sales of $250m, along with more than $200m in recreational sales. Nationwide, the government-regulated marijuana market is expected to double to $2.3bn.
With as much as half a billion dollars up for grabs, banks will no doubt try to enter the market, but this may not be as easy as it seems. For example, if they get an exemption, the next administration might simply revoke it.
However, Colorado may have a vested interest in getting banks on board. In other words, bitcoin has a chance, but banks will inevitably crack the market sooner or later.
The state wants to raise $70m in tax revenue from cannabis sales this year. However, the figure may end up even higher due to high demand (pun intended).
Palm Beach discussion group invests in single Bitcoin Palm Beach Daily News Will 10 sophisticated Palm Beach high-rollers get taken to the cleaners by testing the waters on a $1,150 Bitcoin investment? The group — including such notables as Toys “R” Us founder George Lazarus and McDonald’s entrepreneur George Cohon …
Palm Beach discussion group invests in single Bitcoin Palm Beach Daily News Will 10 sophisticated Palm Beach high-rollers get taken to the cleaners by testing the waters on a $1,150 Bitcoin investment? The group — including such notables as Toys “R” Us founder George Lazarus and McDonald's entrepreneur George Cohon ...
Guardian Liberty VoiceBitcoin Just Got a Bit More Interesting in TexasGuardian Liberty VoiceBitcoin just got a bit more interesting in Texas. Congressman Steve Stockman announced that he will now be accepting bitcoin donations to help run his campaign …
Bitcoin Just Got a Bit More Interesting in Texas Guardian Liberty Voice Bitcoin just got a bit more interesting in Texas. Congressman Steve Stockman announced that he will now be accepting bitcoin donations to help run his campaign for Senate. Stockman announced his decision at the NYC Bitcoin Center, which is ...
Overstock makes $124K from 780 Bitcoin orders a day after giving the crypto … VentureBeat The partnership is not only a validating moment for Bitcoin but also a political statement from Overstock’s libertarian CEO, Patrick Byrne, who told Wired that “it helps us fight the machine” of big banks and big government. Bitcoin is a peer-to-peer, …
Overstock makes $124K from 780 Bitcoin orders a day after giving the crypto ... VentureBeat The partnership is not only a validating moment for Bitcoin but also a political statement from Overstock's libertarian CEO, Patrick Byrne, who told Wired that “it helps us fight the machine” of big banks and big government. Bitcoin is a peer-to-peer, ...
