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Bitcoin The Almighty Buck Your Rights Online

California Legalizes Bitcoin 162

Posted by timothy
from the finally-time-to-cash-in-your-scrip dept.
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 Before the law was repealed, not only bitcoin but everything from Amazon Coin to Starbucks Stars were techinically illegal; the law was generally not enforced."
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California Legalizes Bitcoin

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  • Sigh, of course BITCOIN IS NOT MONEY!
    Hence was not illegal.

    It is a tradable commodity. just like gold, tulip bulbs, or online porn.

    But hey, who cares about reality, which fishing for a good story. If trading bitcoin was illegal, then so what a WHOLE lot of other transactions.

    • by codebonobo (2762819) on Monday June 30, 2014 @12:37AM (#47348109)
      Bitcoin is most often treated like money , but certainly behaves like a commodity. Federally, Bitcoin is viewed as both a currency (FINCEN) and a commodity(IRS).
      • by tompaulco (629533)
        That's okay, currency of any sort including the USD is also treated like both a currency and a commodity.
        • That's okay, currency of any sort including the USD is also treated like both a currency and a commodity.

          It depends upon your tax agency, in the US the IRS is treating bitcoin like an asset. Under such policies people are expect to declare the gain or loss of value of bitcoins between the time they acquired the coins and the time they spent the coins. When this reality is enforced, i.e. people get letters from the IRS asking for such info, bitcoin usage in these jurisdiction will change.

          The above is a key distinction between spending fiat and spending bitcoins.

    • by Antonovich (1354565) on Monday June 30, 2014 @02:38AM (#47348399)

      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...

      • by LF11 (18760)
        >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.

        While it is certainly not "generally accepted," Coinbase and BitPay offer bitcoin payment solutions for tens of thousands of merchants already. BitPay's merchant adoption curve is still exponential: a few weeks ago they reported surpassing 40,000 merchants.

        Then of course there is Toshiba, which turned on bitcoin support for their POS terminals
        • Now factor in that in tax jurisdictions where bitcoins are an asset, like the U.S., that a person spending a coin at any of these merchants is obligated to report to the IRS the gain or loss the bitcoins spent had experienced between the time they were acquired and the time spent.
  • BitCoins will be declared as NOT known to the state of California to cause cancer!
    • by slew (2918)

      However, it shall be know in the state of California as CalCoin.

      CalCoin will be exactly the same as BitCoin, except that there will be a un-elected, board of political appointees created to oversee CalCoin usage in the state. Each board member will collect a 6-figure salary (+travel expenses) to meet 2 times as year for 20-minutes. The board will oversee the writing and signature collection ballot proposition that amends the CalConstitution to enable it to collect of a surcharge tax on every CalCoin transac

  • by Electricity Likes Me (1098643) on Monday June 30, 2014 @12:24AM (#47348057)

    And here I was thinking we'd finally killed defacto indentured servitude/slavery via company scrip.

    This is a stupid act, and it's going to have very real consequences in the future before long.

    And Bitcoin will still be just as irrelevant regardless.

    • by mysidia (191772) on Monday June 30, 2014 @12:41AM (#47348119)

      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?

      • by QilessQi (2044624)

        Or the companies that issue part of their compensation in the form of company stock...

        • by rtb61 (674572)

          Issuing part payment as shares is a tax dodge. You don't pay any taxes until the shares are sold but you can borrow money against them and the dividends can make the payments with you personal loan being tax deducted against those dividends. This means your pay is tax free and after 7 years is disappears as income. So nothing is ever as it seems, especially as companies can sell their stock, buy other better dividend stock and pay you in that, tax deduct it and yet you never pay tax on it.

          • by mysidia (191772)

            Issuing part payment as shares is a tax dodge. You don't pay any taxes until the shares are sold but you can borrow money against them

            In the real world.. they don't usually issue shares, they issue options on shares that vest over time. In other words: the employee doesn't get actual stock, they get a right to buy shares of stock exercisable at a price per share determined in advance.

            If/When the employee decides they want the stock, after the options vested: they can exercise the option before its e

            • by QilessQi (2044624)

              Assuming $Y is a positive number. :-) I know individuals who have worked for startups, putting in long hours for small wages in exchange for options that would not fully vest until four years had passed (25% per year). In one case the company went bankrupt before they could pull together an IPO. In another case the company told its rank-and-file at the last minute that they were doing a three-for-one reverse stock split before the IPO, so instead of having options on 300 shares at $1 each you had option

            • by hendrips (2722525)

              Actually, many companies do issue shares of stock. It's common at many companies to match 401(k) contributions with company stock. If I put in 5% of my salary to my 401(k), and the company matches it with stock, then the company is effectively paying 4.762% of my salary in directly issued stock. Then there's all sorts of other wacky stock-based compensation programs like ESPPs, non-qualified options, restricted stock grants, etc.

              And there are some companies that still issue actual shares instead of incent

      • by Anonymous Coward

        Drink CocaCola, it's famous.

      • Pretty sure you could just demand your money, and if they refuse take them to court as you would with anyone who refused to pay you.

        • by mysidia (191772)

          And if they refuse take them to court as you would with anyone who refused to pay you.

          However, this could be detrimental to your future ability to remain employed with them.

    • by Anonymous Coward on Monday June 30, 2014 @01:40AM (#47348255)

      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?

      • This legal change allows companies (and people) to issue money other than US dollars.

        If a company pays its employee $6/hr in US dollars, it's failing to meet the minimum wage requirement, period. Issuing a gift card loaded with McBucks, quatloos, or whatever will not put them in compliance.

        Admittedly, this is a common-sense observation, which means its legal relevance may be limited.

  • by ebonum (830686) on Monday June 30, 2014 @01:11AM (#47348183)

    "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!

  • Emperor Norton (Score:1, Offtopic)

    by Flwyd (607088)

    Excellent!
    Anyone know when Fry's will start accept these Emperor Norton bills I have?

  • Excellent!
    Anyone know when Fry's will accept these Emperor Norton bills I have?

  • by drHirudo (1830056) on Monday June 30, 2014 @02:23AM (#47348359) Homepage
    Soon BitCoin will became what really it was meant to be in the first place - asset for investment trades. A bitcoin is virtual, non existing in the real world asset, but when the invest market crashed back in 2008, they found most of the assets where non-existing anyway. Now the difference 6 years later - you know that you invest in something that is virtual, so you take a risk again, only more educated risk. It didn't make your investment more risky, just more obsessive, since you can mine with expensive hardware to gain some more coins.
  • ...and money laundering and sanction evading are illegal... and they can fine foreign banks for those activities that were carried out overseas... could they have fined banks for issuing currency overseas?

  • How long until companies are paying in their own special dollars that can only be used at their company stores (again)?

  • by paulpach (798828) on Monday June 30, 2014 @09:03AM (#47349827)

    From the US. Constitution:

    No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts;

    I guess that one has not been generally enforced for a while either.

    • by hendrips (2722525)

      How has it not been enforced? That quote is about limitations on individual state governments, as it comes from Article I, section 10. It says absolutely nothing about the Federal government, which is perfectly entitled to make paper dollars into legal tender.

      • by paulpach (798828)

        How has it not been enforced? That quote is about limitations on individual state governments, as it comes from Article I, section 10. It says absolutely nothing about the Federal government, which is perfectly entitled to make paper dollars into legal tender.

        It does not matter what the federal government does. The constitution clearly says that states cannot use anything other than gold and silver for payment of debts. Meaning, regardless what the federal government does, the states cannot charge state taxes or collect payment for any other debt in anything but gold and silver.

        The federal government is not above the constitution, or so it was supposed to work.

  • What about all those Disney bucks or whatever they call the currency that you can buy in Disneyland and is only good in Disneyland, and hardly anywhere even within Disneyland? Has that been technically illegal all these years?
  • by prgrmr (568806) on Monday June 30, 2014 @09:31AM (#47350045) Journal
    Store credit has always been legal. Stores allowing customers to use credit from other stores it has a reciprocal agreement with for honoring store credit has always been legal. As long as a place of business is willing to accept US dollars, it can accept whatever other form of credit, discount, or voucher that it wants. And given that the federal constitution declares that the US dollar is the currency of the nation, the state law was, at best, redundant.

    Individual states weighing in on bitcoin doesn't make it any more or any less valid or relevant in the market. When the IRS, SEC, and US Treasury finally make definitive policy statements specifically mentioning bitcoin, then you'll have your validity, or invalidity, as the case may be.
  • California generally has immaculate consumer protection laws. A good number of those laws eliminate methods stores sue to lock money that could otherwise be taken elsewhere, or even strip money away without providing any services at all. For example, they were first to make it illegal to charge monthly fees on a gift card (which would eventually bring a card's worth down to nothing even if the owner never spent a dime of it's starting value).

    Gift certificates and cash-like coupons like Starbuck's stars, Koh

  • Rather, I suspect this was done as a way to open the door to taxing 'income' via Bitcoin etc., which if it's not money, is harder to do.

    California gov't is nothing if not avaricious.

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