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If you’ve ever tried paying your taxes in Bitcoin you’ll have discovered the limitation of this viewpoint.

The government monopoly isn’t over money. You can use and issue whatever money you can get others to accept.

The monopoly is over the denomination required to extinguish the liability that government has the legal power to impose upon you and while you live in its sovereign area. Aka taxation

Ultimately you cannot circumvent state money while there are states that control land areas. You will always need their money to pay taxes and that need is sufficient to allow a state to provision itself - since the only place to get the denomination is from the state in exchange for goods and services




The monopoly includes laws around legal tender, which of course, is government money. The government money can be used to settle any debt - this isn't true for other monies. This means that even if the legal tender is rapidly losing its purchasing power and there exists a harder money which creditors would rather receive as payment, they are forced to accept the legal tender instead.


"The government money can be used to settle any debt - this isn't true for other monies."

Legal tender is often misconstrued as an argument. Legal tender laws relate to the settlement of enforcement in courts. Nothing else.

You can require that your customer pays you in Highland Sheep if you want - and refuse to sell anything to them unless they produce those Sheep.

However if you advance them credit (aka creating your own money) and the customer refuses to pay in the Highland sheep denomination as they promised, and then you go to court to enforce your contract, the court can dismiss the case if the customer has offered "legal tender" to discharge the debt.

What legal tender laws do, in effect, is force you to peg your own currency and your own credit advances to the denomination of the state you choose to enforce your contracts in.

Bear in mind you can change the jurisdiction by adding a jurisdiction clause to your contract. Even though I'm in the UK I can guarantee payment in US dollars simply by making my contract subject to the laws of California (say).


> You can use and issue whatever money you can get others to accept.

Nope. You can't just issue money, and you have to accept the state currency in most places on Earth. Paying taxes using Bitcoin is mostly easier than using cash thanks to services that will do a bankwire for you, so what.


"Nope. You can't just issue money,"

Look up "contra entry". http://desktophelp.sage.co.uk/sage200/sage200standard/Conten...

All business credit is issuing money, and as the contra shows you can easily settle debts with it.

"Paying taxes using Bitcoin is mostly easier than using cash"

Where do those services get the state money from? The service are providing the exchange for you. That's not paying taxes in Bitcoin. That is paying an exchange service to pay your liability in dollars for you. Exchanging a liability isn't extinguishing it.

The Treasury account at the Fed doesn't accept Bitcoin. At that's ultimately the bit you've missed. Follow the transactions through transitively and see if you can eliminate state money from the process completely. You won't be able to.




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