[ale] [OT] (but computer and cryptography related) Bitcoin, Litecoin

[Michael B. Trausch]

On 03/30/2013 05:51 PM, Ron Frazier (ALE) wrote:
> There are many things that could foil my plan.  Congress could make this
> illegal, or make it too painful to cash out.  Or the currency could
> fizzle and become worthless.  Who knows.

BitCoin is essentially nothing more than another "foreign" currency.  It
may not be fiat (established by a law), but it is a currency.  There is
nothing that I can think of that grants Congress the power to make any
currency---fiat, mineral-backed, or virtual---illegal.  As I understand
it, Congress simply doesn't have that authority, and if it attempted to
do so, it would be very likely to be challenged and overturned in the
SCOTUS.

Essentially, though, legal tender in the states doesn't imply that there
is an illegal tender.  It just means that if you have sold a good or a
service, you cannot refuse payment in the legal tender, for doing so
means that you have cancelled the debt.

To put that in concrete terms:  Let's say that you contract me to set up
a PBX for you.  I do so, and then I invoice you.  You then come to me
and offer me cash---not a check, not a credit card, not a money order,
not a Western Union, not Bitcoin---but cold, hard cash.  Now let's say
that I refuse that cash.  At that point, I have invalidated the debt,
effectively voiding the invoice and giving you the PBX and my time that
went into setting it up, for free.

However, let's say that you contract me to set up a PBX for you, and I
say "sure, I'll do that, but you have to prepay me with BitCoin."  If
you refuse, it is simple: I won't put the PBX in for you.  I haven't
sold you anything yet, so I haven't refused legal tender nor cancelled
the transaction---the transaction simply hasn't happened yet.  That's
perfectly permissible.

That's also why places like fast food restaurants can refuse to take
anything larger than a $20.  You pay BEFORE you get your goods, and so
they can refuse whatever they want, and just not give you your goods.
The same can be said for anything that works the same way; a grocery
store, for example.

But if things are being done on purchase orders, and you ship me a
semi-truck of goods, and I now have the goods in my warehouse, and I
offer you United States fiat currency and you refuse it, the goods are
mine---free and clear.

	--- Mike

-- 
Michael B. Trausch, President
Naunet Corporation

Telephone: (678) 287-0693 x130
Toll-free: (888) 494-5810 x130
FAX: (678) 287-0693

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