Bitcoin: The Pirate Currency

All alternative currencies are illegal in the United States.

A currency, or money, is in circulation as a medium of exchange. Currency is a highly special asset class tied into a unique system of money for people in a specific nation. Legal currencies are always defined by governments, and each specific currency has limited boundaries of acceptance, has laws that govern the circulation, and specific government entities that issue and maintain them.

Currency is an “imaginary” asset that exists with the purpose to improve trade, yields an ability to collect taxes, interest, etc. It takes work, time, and resources to maintain currencies as a stable social reference for the value of all other things bought, sold, or borrowed. Some currencies, at times, are incredibly difficult to maintain, such as a RUB during Russia’s financial crisis in the 1990’s or the German Papiermark in impoverished Germany after the First World War, but, generally, government-controlled currencies enjoy solid stability. USD, JPY, EUR, AUD, GBP, CAD, and CHF are systematically some of the most stable currencies simply because they are positioned in well-maintained and healthy economies.

Distinct from government-issued currencies, there is now a large pool of private monetary schemes such as Bitcoin, Ethereum, Ripple, Monero, and similar Cryptocurrencies that openly operate within the United States. Some of these private monetary schemes utilize “proof-of-work” (aka Crypto mining) to maintain their database in exchange for rewards of the future value of the maintained Cryptocurrency, while others accomplish transactions on the “proof-of-stake” exchanges that earn transaction fees once the Cryptocurrency token is transferred from one user to another.

All alternative currency systems are illegal to operate in the United States.

Article I, Section 8, Clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress to establish and preserve a uniform standard of value and to insure a singular monetary system for all purchases and debts in the United States, public and private. Along with the power to coin money, the United States Congress has the concurrent power to restrain the circulation of money which is not issued under its authority to protect and preserve the constitutional currency for the benefit of all citizens of the nation.

It is a violation of federal law for individuals, or organizations to create private coin or currency systems to compete with the official coinage and currency of the United States.

The Cryptocurrency, such as Bitcoin, is not tied to any specific country. Bitcoin is a pirate currency. Bitcoin monetary scheme exists without an owner or an entity, but instead has stakeholders — miners and exchanges. Among other legal conundrums, Bitcoin, for example, does not survive the act of defamation because there is no entity to defend it against a false attack.

There is no person or an entity that can place anyone before the court on the grounds such as false or misleading accusations, or trademark violations. It is not even clear who specifically owns web domains associated with Bitcoin or the source code that runs the Public Blockchain. No one party is willing to claim ownership of Bitcoin because no pirate scheme can have a legitimate owner — there is no jurisdiction on planet Earth willing to protect piracy (2022 update: Bitcoin has been adopted as legal tender in El Salvador and Central African Republic, alongside the national fiat currencies in these jurisdictions.)

Bitcoin runs on a Public Blockchain and it is impossible to identify its origin, other than the state of the Internet on a planet Earth at any given moment. Logistically, the Bitcoin network is equivalent to a pirate radio transmission located on transmitters without a valid license, such as an offshore radio transceiver (“rigs,” as hams call them) located in the international waters.

Cryptocurrency exchanges must remain local. The requirement for a conversion into fiat is an Achilles heel of all alternative currencies.

Crypto exchanges do have real owners, are real established corporate entities, and do have rights and obligations (as Corporations or individuals) to abide by the federal law and are within the jurisdictions of all federal courts in the United States.

While individual Cryptocurrencies can exist without specific legal entities to operate them, all such networks always require operational Crypto exchanges. Russia, for example, currently holds a banking ban on Bitcoin, and miners are physically required to exchange Bitcoin token rewards for fiat in other countries for currencies other than RUB. Miners who operate in Russia are unable to sell, buy, or in any way trade Bitcoins received from mining activities. The Russian Federation, in effect, benefits from the Bitcoin mining revenue without having to compromise its own monetary system of exchange — RUB.

Cryptocurrency exchanges are an integral part of the alternative currency systems, such as Bitcoin. Crypto exchanges registered in the United States, therefore, operate in a violation of the federal law.

The agencies responsible for the integrity of the legal tender in the United States, the USD, are the Federal Bureau of Investigation and, ultimately, the current Congress of the United States. The Coinage Act of 1792 delegates the power to produce currency to the United States Department of the Treasury. In another word, the current government of the United States has a monopoly on money.

The Department of the Treasury spends approximately $20 billion annually to maintain USD for the benefit of all US taxpayers. The government must sustain the monopoly on all currency in our nation because currency does not produce revenue. To maintain a legitimate currency is always an expense.

All alternative currencies, just like all pirate transmissions, operate for their purposes, outside the law, and to earn an illicit profit.

As the standardized price of Bitcoin is now reaching 40,000 USD in January of 2021, it becomes essential to prosecute and dismantle all Cryptocurrency exchanges that distribute all alternative currencies in the United States. This drastic action is the best possible solution that will further stop the chaos associated with Bitcoin “tulip fever” as well as money laundering and other highly illicit activities.

All efforts by individuals or corporations in the United States to maintain alternative currency schemes, Cryptocurrency exchanges, and promotion of such activities must be immediately banned, Corporations fined, and owners prosecuted for fraud under the federal law.

The United States Congress has the power to coin money, and the enforcement of the government’s monopoly on money is an essential element for a healthy national economy.

I give you warning; don’t blame me if you make an injudicious choice.” — Alexander Hamilton

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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