Brian Doherty on Bitcoin and Taxes

The leading digital
currency protocol Bitcoin has suffered blow after blow lately—each
one interpreted by doubters as fatal. Major exchanges
collapse, taking hundreds of thousands of customers’ Bitcoin. Minor
exchanges also suffer severe hacking
attacks or disappear. Major players in the Bitcoin game,
even from the respectable representatives of legitimate business at
the Bitcoin Foundation, are arrested for
money-laundering. China continues its push to stamp out its
citizens ability to use it. After zooming above $1,000 late last
year, Bitcoin’s dollar price has fallen by more than
half in the past few months. 

Last week, Bitcoin suffered what seemed to be its most insulting
injury yet: the IRS officially announced that in its eyes
bitcoin is not the currency it purports to be, but merely
property.

But as Reason Senior Editor Brian Doherty
explains, the libertarian dream of Bitcoin has a way of
surviving both any government attempt to manage it, and the
internecine war in the Bitcoin community between the
crypto-anarchists from whom Bitcoin arose and who were its first
adopters, and the big-time legitimate businesses stepping in to
normalize the market, who would just as soon lose the stink of
weirdo anarchism surrounding the coin that can scare off big money.
Both sides of Bitcoin can and will coexist.

View this article.