California Legalizes Bitcoin 162
jfruh (300774) writes "California governor Jerry Brown has signed a law repealing Section 107 of California's Corporations Code, which prohibited companies or individuals from issuing money other than U.S. dollars. Before the law was repealed, not only bitcoin but everything from Amazon Coin to Starbucks Stars were techinically illegal; the law was generally not enforced."
Re:Illegal? I think not. (Score:4, Interesting)
Re:Company scrip returns... (Score:4, Interesting)
And here I was thinking we'd finally killed defacto indentured servitude/slavery via company scrip.
You mean like the companies now that refuse to pay employees by check, and instead issue their salary by depositing it to a prepaid debit card, which incurs a $5 or $10 fee, if the employee wants to transfer money from the card to their checking account?
"other than U.S. dollars" (Score:4, Interesting)
"Section 107 of California's Corporations Code, which prohibited companies or individuals from issuing money other than U.S. dollars"
So issuing US dollars in California is fine? I thought issuing US dollars was called counterfeiting.
Time to see if the the big color laser printer at work is up to the task!
Re:Company scrip returns... (Score:4, Interesting)
It's not about Bitcoin.
The governor is signing a law that allows companies issue script (a substitute for legal tender that is often used to pay employees and can only be redeemed with the issuing company for goods or services) just 4 days before the state raises its minimum wage 16% to be the third highest in the state (WA is $9.32, OR is $9.10, CA will be $9.00 starting July 1).
This looks like a corporate appeasement, as if the governor is saying, "we're raising the minimum wage to $9 an hour to appease the masses because the average 1-bedroom apartment costs $1,000-$1,760 a month in 1162 of the state's 2152 zip codes (see http://average-rent.findthebest.com/ and set the state to CA). $9 an hour enables a person working 40 hours a week to take home $1,000 a month after taxes... they can now afford to live as long as they can walk to work and don't have to eat. But you won't really have to pay them that. I'm going to make it legal for you to pay them in scrip. McDonald's can give its employees $6 an hour in real money and $3 an hour in McDonald's gift cards so they can buy their food from you so the money stays with the company. Agribusiness can pay its migrant fruit pickers in scrip that can be redeemed for the fruit they just picked. Just don't expect us to cover your asses if you get bad PR for doing it."
Why else would you time it this close to the new minimum wage, Jerry?
Wallstreet replacement (Score:4, Interesting)
Re:Illegal? I think not. (Score:5, Interesting)
Though not exactly the final arbiter for such questions, Wikipedia's Money page [wikipedia.org] gives a reasonable definition of money and according to that, Bitcoin is *almost* money. It certainly could become "money" if a few more bigwigs get behind it and regulators don't get involved. The "generally accepted" part is key here - it's far from "generally accepted" anywhere outside of a few illegal marketplaces. That could certainly change though.
What we can't forget is that there is no such thing as black and white - things are not just "money" or "not money" and even things that pretty much everyone agrees are money can be treated as other things. Currency is often traded in ways somewhat similar to commodities. And you mention gold, which for centuries was synonymous (equivalent even) with money. Things change. Remember that modern money shares much in common with religion - it is based on an intricate system of *faith* and faith in a particular means for holding generally accepted value for the purpose of the exchange of goods and services is not something God has set in stone...
Re:California also legalized using polished turds (Score:3, Interesting)
For all those thinking that gold is an ideal currency.
We have ridges on the edges of quarters as a throwback to gold coins, where someone would shave a bit of metal from the coin to devalue it (passing the coin off at full value)
The art of coin casting isn't unknown to the non-bank public. You have people willing to do backyard forges and melt in a little metal into their gold and re-stamp it. After it is a bit worn, it can be (depending on skill) passable as a worn 100% gold coin.
We haven't even approached the age old "lead in a gold envelope" techniques, which Archimedes made famous.
Basically, if you're getting paid in gold, there's still a lot of trust, but a few new / old ways you can get ripped off. That alone causes a lot of concern. With a paper dollar, generally it is quickly inspectable and at least somewhat designed to prevent counterfeiting. A transaction with gold coins could cost quite a bit of overhead, if your recipient demanded that you pay to verify the authenticity.
Gold and silver coins, wear, and devaluation (Score:5, Interesting)
Thing is, you don't have to shave metal from the coin unless you're stupid, lazy, and/or in a big hurry.
Coins of precious metal wear down with use. Metal gets rubbed off the high points of the coin. A heavily worn silver dime can lose as much as 20% of its weight, and still be recognizable as a dime. Where does the metal go? All over the place -- bits of it are left as dust or markings at every point where the coin moves across a surface. In the days of circulating PMs, when coins wore down too far, they were returned to the government, which would melt them down and recycle their metal into new coins. The government absorbed the losses due to circulation.
If you're an enterprising individual, you can get a bunch of silver or gold coins, put them in a dust-tight bag, tumble that bag for a few days, and collect the dust. You're left with worn, but still perfectly legal, coins; they are, in fact, circulated, just not among multiple entities. It's called sweating [google.com], and can be done chemically as well, although that method is easier to detect.
So, if you're on a gold or silver standard, your "hard currency" still loses value over time, but you have the power to capture that "lost value" yourself if you so choose. If a state or nation proposed to issue silver or gold coins for circulation today, you can be sure people would use the full power of twenty-first century technology to chisel their cut off the top. There's no way any entity would volunteer to be on the hook for circulation losses, especially when it's so easy for another entity to accelerate and capture those losses.