Re: What backs up digital money?

[Alan Horowitz <alanh@mailhost.infi.net>]

> From: Hal <hfinney@shell.portal.com>

> I understand that
> in Las Vegas, some people started using casino chips as money.  You
> could buy things with them, and they were accepted since people knew
> they could be turned in for cash at the casino.  But the Feds cracked
> down and brought the practice to a halt.


   Noting your caveat that this is a rumor, I doubt it.  I'm not aware of 
there being any legal basis for doing so. The only possible related thing 
would be for the IRS to bothyer people _after the fact_   _if and only 
if_ they were using barter to to hide the receipt of income. For example, 
if you have declared on your tax return that you are engaged in _buying 
and selling widgets with the intent of realizing a profit_ (Schedule C), 
they are likely to question whether your bartering of a widget for 5 
50-cents-off-toilet-paper coupons, was really an even trade of your 
personal property for someone else's personal property.

Even in such case, the rule is not absolute. For example, the regulations 
which implement the taxation of the inter-state trade in firearms, make 
the presumption that the dealer does possess some number of firearms as 
chattels.

The legal tender laws are of very limited scope. Bus companies _are_ 
allowed to decline to accept dollar bills and instead demand exact change 
in coins, for example.