From: Paul Hughes (paul@planetp.cc)
Date: Thu Mar 09 2000 - 01:49:28 MST
Billy Brown wrote:
> Michael, if constitutionality actually mattered most of the government would
> be shut down tomorrow. The sad fact is that the government disagrees with
> your position, and the courts will back them up. If the IRS decides to tax
> downloaded MP3 files as income at the retail price of the equivalent CDs,
> they can, and no amount of argument on your part will convince either them
> or the courts not to let it happen. So, your only protection is your skill
> at not getting caught - whether money ever changed hands is entirely
> irrelevant to the issue.
Hi. I know I'm probably jumping into this conversation a bit late, but its been
over 6 months since I was last on the list. Here is a simple proposal. Please
feel to improve upon it or attack its basic premise:
A server is set up offshore. On this server is housed a sophisticated barter
exchange. The way it works is simple. If you have something to sell, you post
it online. The catch is your selling your identity to the buyer for 300 'barter
units'. 'Barter units' are fictitious units of value that are measured by the
consensus of the people on it. If you want to sell that used VW of yours for a
million barter units that's your business. Keep in mind that another individual
is selling his brand new Lexus for 5000 barter units, so you're likely never
going to sell that used VW of yours. Very soon, as more people begin to buy and
sell items online using this fictitious currency, it will soon reflect a
reasonable value. The other catch is that barter units have no legal value
outside of the online environment of this offshore barter exchange. In the end
you are not buying that car with units, only the opportunity to acquire it. The
seller in turn gets barter units to acquire opportunities elsewhere on the
exchange. Of course, people can start trading these fictitious barter units for
things in the real world, and that's where things get really fun!
In the meantime, as more and more items are available online, more people will
will want to participate - a predictable result of a networked economy. As more
people join, the more value is added, and thus even more people are enticed to
join. Before too long, big players like Amazon.com, Buy.com and even the
emerging ECN's start "trading" on this new offshore barter system. The barter
exchange company is very careful to maintain that these barter units are not
currency, only an arbitrary measure of value online to facilitate the barter
process. And yet in essence the boundary between barter and currency becomes
completely blurred, as it ironically has always been.
The question of the night is, with the easy and availability of public-key
encrypted schemes for both users and the transaction of these fictitious
"units", what's keeping people from capitalizing on such a fantastic idea? If
the exchange assesses a mere 1% unit acquisition on each barter, the exchange
stands to make a considerable amount of units for themselves to barter with.
Since it is conducted offshore and identities of all the participants are only
made available to matched buyers and sellers, how can it be taxed? Unless I'm
overlooking something, such a system could eventually mature into a full-fledge
online e-conomy where everything is available tax free and anonymous.
Paul Hughes
http://www.planetp.cc/
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