
Judge Shoots Down ‘Bitcoin Isn’t Money’ Argument in Silk Road Trial - pat2man
http://www.wired.com/2014/07/silkroad-bitcoin-isnt-money/
======
ChuckMcM
This wasn't particularly surprising, either in putting it out there or
shooting it down. Every trial starts with a whole bunch of motions which the
judge evaluates. If your lawyer isn't throwing up every possible angle they
aren't earning their pay.

~~~
absherwin

        -Bad: Do nothing
        -Better: Object to everything and you might win the lottery
        -Best: Object reasonably that they may be taken seriously
        -Beyond amazing: Admit everything in such a sympathetic way to minimize guilt*
    
        *Gerry Spence

~~~
dlss
Source? I can't find your last quote online, and want to read more about it

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mikeyouse
This was always an idiotic premise. The Federal money laundering statute
refers to 'monetary instruments' which it then defines:

(i) coin or currency of the United States or of any other country, travelers’
checks, personal checks, bank checks, and money orders,

or

 _(ii) investment securities or negotiable instruments, in bearer form or
otherwise in such form that title thereto passes upon delivery;_

If you could convince a judge that Bitcoin wasn't currency, it would still
qualify as an investment security / negotiable instrument by just about any
definition.

~~~
Drakim
I'm pretty confused over that even an idiot would try to argue this case. It's
something that has "coins" in it's name, and is touted as "the internet money
of the future" and that is being used in substitute for regular money when
buying wares all over the world.

If that isn't money, is ANYTHING money? Could one not just as well argue that
dollars are just ink on paper, and therefore not money?

~~~
kaonashi
Money is a loosely-defined word that ends up being a huge sticking point in
economic conversations because people end up using different definitions.

One thing Bitcoin is not is a unit of account; it is nobodies liability the
way that dollars, treasuries or reserves are a liability of the issuer. When I
think money, I think balance sheet; and by that criterion, Bitcoin is not
money. It's a currency and an asset.

~~~
ahomescu1
Germany seems to disagree with your point:
[http://www.spiegel.de/international/business/germany-
declare...](http://www.spiegel.de/international/business/germany-declares-
bitcoins-to-be-a-unit-of-account-a-917525.html)

Edit: Wikipedia gives the following requirements for "unit of account":

 _To function as a 'unit of account', whatever is being used as money must be:

Divisible into smaller units without loss of value; precious metals can be
coined from bars, or melted down into bars again.

Fungible: that is, one unit or piece must be perceived as equivalent to any
other, which is why diamonds, works of art or real estate are not suitable as
money.

A specific weight, or measure, or size to be verifiably countable. For
instance, coins are often milled with a reeded edge, so that any removal of
material from the coin (lowering its commodity value) will be easy to detect.
_

Except for having a specific weight, Bitcoin has these: 1 Bitcoin is the same
as any other, and it can be broken into 0.5, 0.1 and even 0.0001 Bitcoins.

~~~
kaonashi
I think the sticking point there is differences in definition of 'unit of
account'. My main point is that Bitcoin is nobodies liability; this is by
design. The dollar is a liability of the issuer, which can be used to
extinguish tax debt.

This goes into a much larger point about the nature of money and how it
evolved from ad-hoc credit arrangements.

[http://www.youtube.com/watch?v=9Tks7oJkFRg](http://www.youtube.com/watch?v=9Tks7oJkFRg)
[http://www.youtube.com/watch?v=0zEbo8PIPSc](http://www.youtube.com/watch?v=0zEbo8PIPSc)

~~~
Mandelbug
Regardless of its "technical" or "economic" definition, to the layman and all
its users, Bitcoin is treated, traded, and consumed as money.

The exact origins of Bitcoin do not change its utility, which is as a unit of
exchange, which is what money is in its most general and flexible definition.

~~~
kaonashi
All true, but it does not diminish my point; that since the dawn of
capitalism, money has been a balance sheet phenomenon: being simultaneously
someone's asset and someone else's liability, and in this Bitcoin is
different.

~~~
lifeisstillgood
That seems odd - if A visits will road and buys drugs off B then A owes B one
bitcoin - that is a human level contract that is clearly understood. A balance
sheet accounting of this transaction would as easily be In bitcoins as dollars
(A has a liability of 1 bitcoin, B has an asset)

As long as B wishes to denominate their accounts in bitcoins this is quite
reasonable.

Or am I missing something ?

(Interestingly the Indian mathematician who invented negative numbers did so
using accounts and debt as an example (bhagravita? 500AD)

~~~
kaonashi
>Or am I missing something ?

Banking.

~~~
lifeisstillgood
I don't understand - why is banking meaning that I owe someone 100 bitcoins a
problem? It's an unstable currency yes but the same can be said for Zimbabwean
dollar

~~~
kaonashi
In your case, the transaction is barter, a transfer of one non-financial asset
for another.

If you have a contract to provide 100 BTC, then that contract would be money,
denominated in BTC (not the BTC themselves). It would exist on one balance
sheet as an asset, and on another as a liability (at the same time).

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canjobear
The article says this was a motion to dismiss all charges, on grounds that
bitcoin isn't money and that Ulbricht wasn't responsible for website users'
actions.

What happened to the murder-for-hire charges? Those seemed pretty damning...

~~~
herendin
All dropped, except the Maryland case, which isn't being tried yet and could
also be dropped when the time comes

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svedlin
The claim is that the term "funds" included in the definition of "financial
transaction" [1] covers bitcoins.

"Funds" typically denotes cash or an asset that is highly liquid, not just
anything which can be purchased or sold. Black's Law Dictionary defines "fund"
as a "sum of money or other liquid assets established for a specific purpose."

Bitcoins, at this stage, are accepted almost nowhere, recognized by few people
as currency, and represent a tiny, highly volatile and risky niche compared to
other markets. It's much easier to convert a used iPhone (the top search on
eBay) into cash, sell concert tickets on craigslist, or trade collectibles,
than it is to convert bitcoins into legal tender, but no one would mistake
those goods for "funds." The law isn't intended to cover anything which can be
exchanged for cash. In fact, it specifically enumerates the following types of
property separately when defining the scope of "financial transaction": "real
property, vehicle, vessel, or aircraft." [1]

Because currency is accepted nearly everywhere as payment, the government
considers it difficult to police and subject to special penalties when used
for criminal ends. Goods like collectibles or bitcoins don't operate at that
scale, since they're accepted by relatively few businesses and specialized
experts as payment. If a tiny (in comparison to the economy at large)
experiment like bitcoin is "funds", then almost any object bought or sold in a
zillion stores and marketplaces can be construed as "funds". Any quid-pro-quo
could be considered laundering, which broadens the law beyond its intended
scope.

The ruling says:

"Ulbricht's alleged conduct is more akin to a builder who designs a house
complete with secret entrances and exits and specially designed traps to stash
drugs and money; this is not an ordinary dwelling, but a drug dealer's 'dream
house.'" [2]

It's not illegal to build a house with secret entrances and compartments. Such
a house could be used by anyone who wanted to hide their own possessions on
their own property. The fact that someone might use it for illicit purposes
doesn't implicate the owner or builder. It must be proved separately that the
owner or builder knowingly entered into some kind of agreement with another
conspirator to facilitate a crime [3]. Merely hosting a chat room isn't a
conspiracy.

Unfortunately, this is just a perpetuation of the same pointless drug war. The
prosecution's position is wildly overblown. The alleged activities are akin to
operating a motel where a victimless offense might have been committed by a
third party.

Drug prohibition is ineffective and is on the way out in favor of treatment
and social programs that are more effective.

[1]
[http://www.law.cornell.edu/uscode/text/18/1956](http://www.law.cornell.edu/uscode/text/18/1956)

(4) the term “financial transaction” means

(A) a transaction which in any way or degree affects interstate or foreign
commerce

(i) involving the movement of funds by wire or other means or

(ii) involving one or more monetary instruments, or

(iii) involving the transfer of title to any real property, vehicle, vessel,
or aircraft, or

(B) a transaction involving the use of a financial institution which is
engaged in, or the activities of which affect, interstate or foreign commerce
in any way or degree;

[...]

[2] [http://www.scribd.com/doc/233234104/Forrest-Denial-of-
Defens...](http://www.scribd.com/doc/233234104/Forrest-Denial-of-Defense-
Motion-in-Silk-Road-Case)

[3] [http://conspiracy.uslegal.com/elements-of-the-
crime/intent/](http://conspiracy.uslegal.com/elements-of-the-crime/intent/)

~~~
rtpg
>It's much easier to convert a used iPhone (the top search on eBay) into cash,
sell concert tickets on craigslist, or trade collectibles, than it is to
convert bitcoins into legal tender

Really? What about all the services like Bitstamp? I am fairly sure that
bitcoin is more liquid than used iPhones.

~~~
svedlin
I think for most people, bitcoin isn't particularly user-friendly yet. By
comparison, selling a used phone on eBay or craigslist is pretty easy...

~~~
a_c_s
Being user-friendly has nothing to do with liquidity.

Stocks, which most people don't understand and can't be sold without
contacting a broker are considered liquid.

Jewelry & stamp collections are not considered liquid assets, yet everyone
understands what these are and where to purchase them.

------
sashanna
Breaking news: judge exercises common sense.

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BeyondTime
Bitcoin is based of cryptography which is completely broken before
implementation so, this would have to be a discussion about before time.

No one has experienced security.

