Originally Posted by Ribozyme
Won't bitcoins create inflation since they create money out of nothing? Well out of electricity.
In much the same way that you are not creating money out of nothing by carving a wooden loon and selling it, so too are you not creating money with bitcoins.
Bitcoins have no value beyond what someone is willing to pay for them. Therefore, they are not currency, and they are not creating money from nothing. A better way to think of it is that a bitcoin is a way to tie up money. It is like a transferrable bank account. Which is to say that it behaves like a stock. Stocks are not creating money from nothing, neither are bitcoins.
You put the money IN (buy the bitcoin from someone), and then later you get the money out by selling it, hopefully at a higher value. For those people who MINE the bitcoins, they are doing nothing but spending electricity to later obtain a product they can trade or sell.
This is not creating money, this only moves money around the economy. From one hand to another. This happens every day with every other saleable digital and real asset. This is why bitcoins are NOT currency, and this is why they should apply under any law exactly the same as any other good or service. The fullest extent of what could legally be done here is only to tax the sale of them. Nothing more.
Just because you call it currency, doesn't make it legally so. In the same manner that children using packs of gum to buy pokemon cards on the playground are not using "currency".