SoylentNews is people
SoylentNews
from the convert-it-to-libra-coin-if-course dept.
The bitcoin scam worked — almost too well. In 2012, back when almost no one had heard of the digital coin, he’d started modestly, asking people he found on the dark web for $200 or $300 worth of bitcoin as a way to test out his investment scheme. He told them he could exploit the then huge price differences between various bitcoin exchanges and promised huge rewards. But once they sent the funds, he vanished into the ether to find his next stooge.
There was a certain genius criminal irony to it: He would hype an untraceable anonymous digital currency, then get paid in it.
[...] But he had a problem. It was getting harder to turn the most overhyped currency since the tulip into actual cash.
[...] All of this means that people like our guy who are very rich on paper (or, more accurately, on the blockchain) must devise highly complex methods to convert their ill-gotten gains, or risk losing quite a bit of value, said Tom Robinson, co-founder of the blockchain analytics company Elliptic. “Funds from illicit activities are just lying dormant, and they are waiting to find effective means of cashing out,” he said.
Yet if we know anything about criminals, it’s that they’re resourceful. As financial institutions and regulators the world over grapple with bitcoin’s adaptation to mainstream use, some of these criminals have devised ingenious hacks for converting their money; still others are turning to alternative coins as they seek greater privacy for their transactions and to stay ahead of the law.
(Score: 4, Informative) by Thexalon on Tuesday August 20 2019, @04:23PM (2 children)
There's something very specific that government-backed currency has that other forms of currency don't: People with weapons authorized to use them to enforce certain rules in the economy. To wit, using the US as an example:
1. You need to come up with a certain amount of the government-backed currency every year to pay your taxes. The IRS doesn't take Bitcoin, for example. And if you fail to do so, people with weapons can and will show up at your home to take things of value until the bill is paid.
2. If you look at a dollar bill, you'll notice a statement that "This note is legal tender for all debts, public and private". Which means that if you, say, order food from a restaurant without making specific arrangements regarding paying the bill, and you offer cash, then you have legally attempted to pay your bill regardless of what the restaurant owner might think, and they can't claim you tried to steal from them. If they do for some really strange reason, people with weapons can show up and explain things to them.
3. Banks that collect and lend out US dollars have a lot of laws and regulations they have to follow about what they can do with their depositors' money. If the bankers don't, people with weapons are authorized to show up and explain things to them. By contrast, Bitcoin exchanges don't have those regulations, and that has resulted in losses and thefts worth millions of dollars.
As far as I can tell, a lot of the attraction of Bitcoin was that there weren't any regulations, and the believers are now finding out exactly why those regulations exist. In addition, I think it's worth pointing out that when you create something that's specifically intended to be free of government oversight, it necessarily attracts people who really really want to be free of government oversight, namely people even libertarians think are crooks.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by darkfeline on Tuesday August 20 2019, @10:36PM (1 child)
The restaurant example is apocryphal. If a restaurant has a sign saying they only accepts cards, then they can very much refuse to accept your cash payment, or require some additional processing fee of their choosing.
The proper process would be for the restaurant to sue you or take you to small claims, for damages including but not limited to the price of the meal (e.g., additional labor fees for handling cash, counting them, driving to the bank and depositing them). These damages would then be a debt which you could pay with cash.
In practice, of course, a restaurant may very will accept cash to avoid the headache of going to court. But they are not legally obligated to accept cash for payment, even if the payment is rendered after the service.
No one is required by law to accept payment in cash. You could start a business that only accepts payment in heads of cattle if you wanted. However, if someone owes you debt (e.g. damages or failure to pay), you cannot demand that debt be settled in heads of cattle. Any contracts must first be "converted" to debt first; it is no longer a matter of paying for a service but compensating for damages/breach of contract.
Join the SDF Public Access UNIX System today!
(Score: 0) by Anonymous Coward on Wednesday August 21 2019, @08:46AM
Actually! Nobody forces transactions to use cash; yes you can trade cattle for hay. But! in my jurisdiction, there is an 'offer for sale' and several other categories of what amount to an open contract that anyone can take up. And many of these categories, a seller cannot refuse a buyer if the buyer wishes to use cash, because of the method of payment. But there's an exception for large denomination bills, which generally means grocery stores turn down $50 and larger bills. So they don't need to take plastic, but if they have a dollar price in the window and haven't got a different reason to reject a buyer (no shoes, violence, whatever) and it's a public store (not one where *only* clubmembers can buy, like CostCo or the weed clubs), and the bills are $20 or lower, they can't turn away a buyer due to cash as the method of payment. Much to the chagrin of some bigger stores who would love to push all customers to a linked store-branded credit card!
I think these are laws from the 80s to reduce credit card monopolistic practices but that's just a guess.