@moa: If I understand you correctly, you are asking whether, if a government wants to attack bitcoin for some reason, it will also attack virtual world currencies. Is that your question? If it is, I think the answer is generally no but it depends on why the government decides to attack. For example, if it has to do with money laundering issues, then there are probably no implications for Linden Dollars, where the founding company runs the exchange and everything is above board.
While from a technical perspective you are right that bitcoin is like a virtual game, the law looks past technicalities to substance. Linden Dollars and other virtual currencies aren't really meant to be used to buy any and all goods -- just those in-game. Bitcoin, on the other hand, is meant to circulate broadly and to be used to buy real goods. Additionally, whereas Linden (if I recall correctly) has taken steps to restrict illegal activities in second life, such as virtual casinos, no such regulation is happening with bitcoins.
Regarding your second point about the meaning of "fiat," I appreciate your feedback. Yes, the meaning of the word "fiat" is by governmental order. At the same time, "fiat money" has grown to encompass another meaning -- a currency that isn't specie and isn't backed by commodity. See, for example,
http://www.merriam-webster.com/dictionary/fiat%20money. I think I made it pretty clear in the paper that even though I referred to it as "fiat" money, I was doing so because it was unbacked by commodity and not because it had the backing of a government. In any case, you might be right that referring to it that way may be confusing and I will consider changing it in the next draft.
@noagendamarket: Thanks for taking the time to read the paper. I'm not really sure how to respond because I'm not sure what you're saying or what conclusions you drew from my paper. I haven't researched and written about tax issues yet. Where certain transactions happen, who runs the business, etc.. are important issues in deciding whether the laws of this government or that government apply. The inability to enforce because of the structure of bitcoin or of a particular business is a separate issue.
@chodpaba: Thanks so much for your very insightful comments. Regarding separate block-chains, I considered writing about that in my paper but I think that is a feature of the software but that separate block-chain wouldn't be _the_ bitcoin currency -- it would be something else (such as namecoin). Those other things are certainly interesting, but don't fit within the subject matter of this paper. Of course, I can be convinced otherwise.
Your point about internationality is very well taken. The paper is very U.S.-centric. I will try to do a better job in the next draft of pointing that out and mentioning the internationality of bitcoin. I may try to touch upon laws or regulations in other countries but I don't have expertise in other countries' laws.
Could you elaborate a bit on your point about enforcement? You are saying that bitcoin being illegal won't affect its use because of its decentralized nature, if I understand you correctly. Yes, but it will affect demand for bitcoin and therefore its value. I'm not sure I understand the comparison to the cryptowars.
Regarding your trust point -- what is the implication? Is it that bitcoin is more resiliant than I've painted it to be? Or are you saying that the legal sections don't discuss the trust point? Or is it something else?
@forever-d: That is a great argument and one that I'm sure bitcoin supporters would use in any argument to the SEC or in court. I think your point that others could easily pick up development of the bitcoin client and continue parallel implementations of the software that would work just as well is a very good one that I'll incorporate into my next draft. At the end of the day, I'm just not sure that I agree with you. Yes, the protocol is in place. However, I still think people rely on and expect continual improvements to the software (and protocol). What if Gavin and the rest of the developers just dropped out -- what would happen to the value of bitcoin? My guess is that it would plummet -- until and unless another group jumped up and took responsibility. And since bitcoin's value depends on some group of people continually improving it, there does seem to be a "common enterprise." It is an extremely close question though.
