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back to article Bitcoin now accepted in London pub. In Hack-ney, of course

A pub in East London has become the first in Britain to accept Bitcoin in lieu of real money. The Pembury Tavern, in Hackney, is within easy reach of Shoreditch by fixed-speed bike and is a favourite haunt of the area's many varieties of hipster (as opposed to the area's equally numerous drug-dealing community, another group who …

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Silver badge

Cyber tax

Do HMRC charge the pub for the usual tax and VAT on the amount registered at the till and then charge him for adjusted capital gains tax when he converts then to pounds - or does it count as a foreign currency transaction (assuming he declaes any of it)?

Do HMRC have any idea how to deal with this?

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Bronze badge

Re: Cyber tax

The amount registered at the till and declared to HMRC will be in pound sterling. The landlord has decided to accept bitcoins instead of pound sterling but he could just as well accept Euros, Dollars , Yen or pieces of gold in lieu of pound sterling.

With Euros, Dollars or Yen there would be no capital gains to pay should their value dramatically increase, but he would be taxed on the profit from the currency trade (or get credit from the loss). With gold he would have to pay capital gains tax unless the gold is in the form of UK currency such as a Gold Sovereign. In that case their is no capital gains to be paid no matter how much gold increases. With bitcoins he will pay capitol gains if it increases and receive tax credits if it decreases.

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Pint

Re: Cyber tax

Perhaps the pub loans the customer the price of a pint in pounds, interest free for a few milliseconds. The customer immediately uses that money to buy the pint and so the pub pays it's VAT bill and whatever taxes based on this transaction as normal. The pub then pays the same money back to the customer for a currency exchange, which the customer uses to settle his debt. The customer then transfers the appropriate amount of BitCoin to the pub to complete the currency exchange transaction.

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Anonymous Coward

Just as the US feds is about to close down bitcoins? He's a bit 'late'. The real Earlies should mostly have cashed out of it.

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Anonymous Coward

Erm, "the US feds" can't "close down bitcoins".

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Bronze badge

The US feds can only prevent institutions from trading bitcoins for dollars. They can not stop individuals from trading bitcoins or institutions trading bitcoins for other currencies such as Sterling or Euros.

Bitcoin was designed so that there is no central control that can be shut down.

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Silver badge
Black Helicopters

Anyone who believes the Merkins can't "shut down" BitCoin is rather naive. Surely recent PRISM events highlight just how far they're prepared to go to further their own agenda.

And while I'll grant that actually shutting it down might be difficult, they would be able to seriously disrupt it's use and devalue it substantially.

I'm not saying its right, or that they should, simply pointing out you should never underestimate the Merkins.

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Anonymous Coward

And while I'll grant that actually shutting it down might be difficult, they would be able to seriously disrupt it's use and devalue it substantially.

Like they did with PGP? Snowden? etc.? Don't overestimate Merkin propaganda either. There's a whole world outside their borders.

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Silver badge
Alert

Killing bitcoins isn't a tech problem though, it's a social/business problem. Outlaw American business from dealing in BTC, put pressure on international partners to do the same by making a lot of noise about drugs and terrorism. Result - massive market suppression as any hope of "normal" involvement in the bitcoin market dies, exchange becomes very hard and it's relegated to niche, underground uses.

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Anonymous Coward

> Outlaw American business from dealing in BTC

How?

In the USA any two entities (person/person, business/business, business/person) can exchange goods and services for anything they consider valuable. You can purchase your groceries with a painting provided both you and the grocer agree upon the exchange although, for tax purposes, a dollar value has to be assigned.

About the only thing they could do is make the possession of Bitcoins illegal but I doubt they would get anywhere passing that law or having the courts uphold it.

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Silver badge
Stop

>> How?

Make a law that says trade in bitcoins is illegal. Like trade in drugs perhaps. They could define running any sort of wallet service or a mining rig on the network to be money-transmission and apply a load of financial rules around that (which it is *very* doubtful BTC meets). Miners could be arrested for enabling money-laundering. All sorts of stuff could happen.

Do you really think it's beyond lawmakers to figure out a way to make trade in BTC effectively illegal?

I'm n ot saying its good, or right, but you have to admit its possible.

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Anonymous Coward

> Make a law that says trade in bitcoins

Rename to Bytecoins

> They could define running any sort of wallet service or a mining rig on the network to be money-transmission and apply a load of financial rules around that

I have a wallet service on my desktop. It holds information that I want to keep private and has nothing to do with any form of virtual currency.

In order to apply financial rules they have to recognise it as a currency which would, in effect, legitimise it.

> Do you really think it's beyond lawmakers to figure out a way to make trade in BTC effectively illegal?

Yes. That is why there are so many lawyers and why every law passed ends up being amended and/or superseded. Lawmakers find it difficult to successfully define physical objects and processes, never mind virtual ones.

All the miners do, by the way, is generate a SHA-256 hash to sign a block of data with. How easy do you think the lawmakers would find it to stop people signing a bitcoin data block without having any side effects on everything else that uses SHA-256?

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Silver badge
FAIL

>> Rename to Bytecoins

"Unregulated peer-to-peer crypto currency".

>> I have a wallet service on my desktop. It holds information that I want to keep private and has nothing to do with any form of virtual currency.

So what? Kill/heavily regulate the online wallet services and make mining illegal. Not really all that hard. Hard to identify who's doing it, perhaps, but not hard to legislate.

>> In order to apply financial rules they have to recognise it as a currency which would, in effect, legitimise it.

Not if they also made it illegal. Look at what happened with Liberty dollars - recognised as a competing currency and shut down as a result (competing physical currencies are not allowed). Again, BTC would be *technically* harder to shutdown, but not legislatively harder.

>> Yes. That is why there are so many lawyers and why every law passed ends up being amended and/or superseded. Lawmakers find it difficult to successfully define physical objects and processes, never mind virtual ones.

Yet here we are with all these laws and enforcement agencies that will shut you down if (for instance) you make a business of selling illegal items like heroin. Seems that some things can be legislated.

>> All the miners do, by the way, is generate a SHA-256 hash to sign a block of data with. How easy do you think the lawmakers would find it to stop people signing a bitcoin data block without having any side effects on everything else that uses SHA-256?

Very easy indeed. "For the purposes of mining and/or processing transactions in unregulated peer-to-peer crypto currencies".

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Anonymous Coward

> "For the purposes of mining and/or processing transactions in unregulated peer-to-peer crypto currencies"

Mining isn't legally defined and neither is peer-to-peer crypto currencies.

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Silver badge
FAIL

>> Mining isn't legally defined and neither is peer-to-peer crypto currencies.

So they define it. I'm not really sure what your problem is here.

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Anonymous Coward

Do you get a real pint or a virtual one?

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Anonymous Coward

Bitcoin is becoming increasingly popular with ordinary people, but has fallen foul of the law in America, making its future far from certain.

Why? Resisting interference from national governments IS WHAT IT WAS DESIGNED FOR.

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Anonymous Coward

its also

What America was made for, and look what happened there...

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surely its obvious the US banksters were not going to like bitcoin

If more and more people use it, then surely it will be harder to stop and some clever minds will be able to outsmart the gov and we wouldnt have to use the piece of shit banks

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Meh

the thing is, if something goes wrong with a regular monetary transaction and you end up out of pocket you can walk in to your high-street bank and they will help you.

If a bitcoin transaction goes wrong who will you take that up with? What will happen when the scammers start to play the system? because it is guaranteed they will, who will give you redress?

Who remembers the early days of paypal where if you had a bad transaction it was hell to sort out but at least you had an organisation to deal with and complain to.

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Anonymous Coward

wow, thumbs down for asking a reasonable question - thanks fellow Reggers.

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Bronze badge

Bitcoin is a religion

That's why the true believers downvote you for asking reasonable questions. Their system can't stand up to such. Well, if not a religion a bit like the Pokemon card craze. An obsession with trading something arbitrarily made in short supply but fundamentally useless and popular amongst spotty teenagers for as short as such crazes last. As to virtual currencies, these have a great future - money earned on my local LETS 20 years ago is spendable at par today and sterling equivalent value has been maintained, something Bitcoin can't claim as it can fluctuate in value by 50% in as little as an hour.

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Coat

Meanwhile ...

The Laundry next door has been quietly accepting bitcoin for years

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This post has been deleted by its author

Anonymous Coward

Mmm, bit-ale

With only an 8% markup to cover the pub's transaction fees, your fees for buying it in the first place -

HEY COINERS! HOW'S THAT NEW FEE-LESS PAYMENT SYSTEM WORKING OUT FOR YOU? FEELS GOOD NOT PAYING THOSE HIGH FEES TO VISA AMIRITE?

Good on the landlord, he's figured out a way to get a new crowd in, but this is hardly an awesome deal.

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Anonymous Coward

Re: Mmm, bit-ale

There is no actual transaction fee for transferring the bitcoin from the customer to the landlord (unlike a credit or debit card). If the landlord then wants to convert the bitcoin to pounds (or dollars) there is a conversion fee and since the exchange will probably occur in a different country there will also be a transfer fee to get it into his UK bank.

The bitcoin-bitcoin transactions are fee less although you can opt to pay a fee to speed up the transaction.

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Anonymous Coward

Re: Mmm, bit-ale

>> There is no actual transaction fee for transferring the bitcoin from the customer to the landlord

Of course there is, unless they're freeloading on the network.

>> If the landlord then wants to convert the bitcoin to pounds (or dollars) there is a conversion fee and since the exchange will probably occur in a different country there will also be a transfer fee to get it into his UK bank.

Yup, well guess what, the landlord does want pounds, which is why he has to charge 8% higher for bitcoin customers. And if the punter wants to convert pounds to bitcoins before they go then they likely have a variety of fees on the way in too.

>> The bitcoin-bitcoin transactions are fee less although you can opt to pay a fee to speed up the transaction.

So most transactions then. Particularly as some miners have already started to filter transactions based on fees and source (Satoshi Dice).

But you're right. Far better to pay a higher percentage to MtGox, Coinbase and a miner than to VISA, for some reason. LOL.

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Pint

Currency value fluctuations

I'd be rather worried about my full pint of bitcoin beer suddenly turning into a half pint!

I recall Stephen Early was a member of the Cambridge University Computer Lab, so his interest in bitcoins (and other tech) is not surprising.

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Re: Currency value fluctuations

Never mind turning into half a pint, what about suddenly turning into twenty pints of bitcoin beer when you're stood behind the local skinhead Millwall supporter, with explosive results...

(I know 20x increases in value happened years ago, before the founders cashed out and ran, obviously.)

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Pint

A publican IS a drug dealer.

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Anonymous Coward

In today's world, disapproval of something by the US Gov is a Sterling recommendation.

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Pint

How many alchy sysadmins will this draw in... ?

After a random chat with my boss earlier this week, I thought of the idea of using all our machines to chug away at mining bitcoins from the hours of 7pm-7am...

600xi5-2400's, and numerous servers all mining... Should pay for a Friday night or two.

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Anonymous Coward

Hipster = 70's

Anyone identifying themselves as a "Hipster" is nearly dead.

2013 means your way too old now!

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