> In a way, bitcoin itself is not really a currency, or money, it's more like an idea for exchanging messages.
It's a way to convey messages, but the messages represent value in the same way that paper money does. If bitcoins can be exchanged for goods and services, then they represent the value of those goods and services, just like paper money.
An electronic message describing a transaction involving dollars, or euros, or some other wealth representation, is just a message about a transaction. But a bitcoin is the wealth representation -- it doesn't require, or refer to, another medium of exchange.
Your argument tries to deny the identity of bitcoins as currency, but that isn't so -- they're currency.
Your argument assumes that individual bitcoins exist...
Bitcoin ties a number to a script. By providing a cryptographic key for that script you can add that number with some other numbers from other scripts and then divide that value into new scripts (throwing away the extra). Bitcoin programs often generate new keys for just about every transaction (so it's hard to link them together).
These scripts are transactions in waiting. They can't complete until someone provides the key that decrypts them, and then puts them in another transaction. Bitcoin is deniable, no one can prove you have the key to some scripts (since you can generate the keys from something in your memory, as opposed to using the easier to use encrypted wallets), and if they tried to, it would be equivalent to a thought crime.
Now, as a legit business, you would be required to collect tax for your services (for sales tax), but you already have to do that, which is how it should be.
"the messages represent value in the same way that paper money does."
I doubt that, since paper money is guaranteed by law to at least be accepted by the government for tax payments. There are no guarantees at all with Bitcoin.
> I doubt that, since paper money is guaranteed by law to at least be accepted by the government for tax payments.
Fair enough. I think over time that will change -- either the bitcoin idea will evaporate, or they will come to be accepted by all sectors of the economy.
It's a way to convey messages, but the messages represent value in the same way that paper money does. If bitcoins can be exchanged for goods and services, then they represent the value of those goods and services, just like paper money.
An electronic message describing a transaction involving dollars, or euros, or some other wealth representation, is just a message about a transaction. But a bitcoin is the wealth representation -- it doesn't require, or refer to, another medium of exchange.
Your argument tries to deny the identity of bitcoins as currency, but that isn't so -- they're currency.