Bitcoin Donations To US Campaigns Might Soon Be Allowed 144
SonicSpike writes with this excerpt from Politico: "Political campaigns will be allowed to accept — but not spend — the digital currency Bitcoin, under a proposed federal rule released Thursday. The Federal Election Commission draft would require campaigns to first convert any Bitcoins collected as donation to dollars. According to the proposal, the currency will count as an 'in-kind' contribution to a campaign — like a stock or bond. The FEC will not consider them currency. Campaigns are permitted to accept non-monetary contributions like stocks, private stocks, commodities, and equipment— but must list their value in dollars on campaign finance reports. Attorneys for Conservative Action Fund PAC asked the agency in September to decide if and how political candidates and outside groups are allowed to use the digital currency, in addition to U.S. dollars. "
Re:Can we have a week without ... (Score:3, Interesting)
Real money is something that has a guarantee that it can be turned into goods or services in the future, backed by something that most people will trust. Examples of the guarantee include a bank that owns a lot of assets making a promise, a guarantee that a government will accept it in payment for taxes or will enforce your right to settle debts with it, or some commodity (historical examples include grain and precious metals) that is stored somewhere in an amount that makes a convincing argument that people who want the commodity can go to the backer and exchange their tokens for the commodity.
Bitcoin is backed by nothing. There is no large organisation (government or private) guaranteeing that they will accept it in exchange for goods, services, or relief from debt. There is no commodity store that you can go to and exchange bitcoins for some guaranteed amount of the commodity.
There are markets, but they are unlike traditional commodity markets because commodity markets have a mixture of traders (who either produce or consume the commodity being traded) and speculators (who bet that the value of the commodity will go up or down and make money when they guess right, and who provide extra liquidity that helps the market function). Bitcoin markets solely contain speculators and so are extremely volatile.