"Again we're running into the geeks-trying-to-understand-the-law problem -- they always expect the law to be as sensible and self-consistent as geometry."

Well, there's only one solution then—we need to get more geeks in office.

Edit: Real geeks, not the "I own an iPad" that passes for geekery in Washington.

Who says that things that aren't a problem need to be made illegal because something analogous is?

If they choose to make BitCoin illegal, due to anti-laundering laws, etc, should your iPhone game not be allowed to use credits either, even though it's so small nobody would bother abusing it?

It's not a problem requiring a solution, it's merely an observation. If a bunch of over-logical geeks were to sit down and try to draft a new set of laws which were completely unambiguous and free of arbitrary cutoffs and nonequivalent treatment of equivalent situations then they'd never even get past questions like

"Precisely how far from the end of my nose does your right to swing a fist end?"

Without arguing with your specific wording of "completely unambiguous and free of arbitrary cutoffs etc.", I think the implicit point you're making that a group of highly intelligent people couldn't sit down and come up with a significantly better new set of laws "from scratch" is wrong. I think they could, if that were their only aim, vastly improve laws and government with a noticeable improvement on average quality of life in the world. The obvious problems and the reason this won't likely happen soon are politics, power, trust, etc.

I think the chances of finding a group of highly moral, highly impartial, highly intelligent to work together to set up a new system of laws "from scratch" with no other goals than to produce a better system of laws and improve the average quality of life is practically nil.

Although the US system is far from perfect, I think Jefferson, Hamilton and Madison did a pretty darn good job of all that.

Nah, they'd do an analysis and say that it ends at exactly 1 cm away from the end of one's nose or whatever.

Then people would complain that it wasn't fair, because they intended to stop at 1 cm, but actually stopped at 0.99 cm and that should be close enough. And then someone would try to drag relativity into play and question what reference frame we should be measuring that 1 cm in and things would go downhill from there.

Right, because while you and I are able to see absurdity of that, these super intelligent geeks you have in mind wouldn't be able to.

He's going with the "geeks are blind to common sense" fallacy.

Actually, I'm going with "rules aren't precise because people disagree strongly over stupidly minor details so we have to abstract them to reach consensus."

Why are "alternative currencies" illegal under US law? AFAIK the only thing that's illegal is refusing to accept US$ as payment if you accept something else. For example, people can spend foreign money (GBP, Euros, etc) inside the non-international parts of airports. Also, people can transfer their USD to foreign currency and vice versa over the internet and at banks. Is there something different about bitcoin than say zimbabwe dollars? If anything, they're probably safer. As an aside, USD are accepted many places outside of the US in lieu of the local currency. I imagine there would be similar laws in those countries, but yet it's acceptable there.

Jct: They're not. Ithaca Hours. Berkshares. Timedollars. Lots of legal models. What's illegal is making the tokens look like the real thing. Why else would he do it in such an illegal way as to incur the wrath of the government. I think Liberty Dollars was a Judas Goat effort to bring the government down on the whole alternative currency movement.

This is true to varying degrees under different regimes. Of course you're never going to have perfect and consistent justice, but if you're interested in avoiding a police state it's a good idea to keep the law self-consistent and regularly enforced. Otherwise, everyone's a criminal and the state will take the opportunity to put its enemies in prison.