You really don't get it at all. Gold has NO VALUE UNLESS SOMEONE WANTS TO BUY IT. If you were on an island, with lots of gold and no food, a single fish you could get from the sea would have move value that all the gold you can find.
The exact same scams are not only possible with gold, they are happening as we speak. Mail in your gold and they'll mail you back cash. Except sometimes they don't. And when they do it is pennies on the dollar of what the gold is actually worth.
No, it doesn't. It has a value based entirely on what people are willing to pay for it, period; it has no intrinsic value just because it exists. If nobody wanted gold it would have absolutely no value. This is universally true: everything is absolutely worthless until you find someone who wants it. Simply existing, having a physical thing you can trade, does not guarantee any concept of value. Garbage exists and you have to pay to get rid of it: it has a negative value. But then someone discovered a way to make money with certain types of garbage and suddenly garbage had a positive value.There isn't some government law setting prices, or mandating volumes or anything like that, it is quite literally two guys standing in a room saying "I'll sell X gold for Y dollars" and the other guy thinking "I can sell that gold to the public for more than Y dollars, I'll take it". There's very little government involvement. The price is entirely effected by public opinion and how much the traders think they can get away with. This is true of every commodity, whether it has a physical representation or not, its value is exactly what people are willing to pay for it (or pay to get rid of it). Gold's "established value" is entirely historical: you think it is worth something now because it was worth something in the past and people continue to want it.
But that is exactly the same with Bitcoins.
Diamond then, if gold is problematic for you. The demand for diamond is entirely manufactured. Outside of jewelery, diamonds mined out of the ground serve absolutely no purpose. The only reason they cost so much is because the supply is carefully controlled and demand kept artificially high. If people weren't convinced that diamonds were pretty to look at and a sign of "true love" you wouldn't be able to give them away.
I've got a pile of garbage you can have. It's real, right, and by your definition something being real is better than nothing. Heck, I'm sure we can find all kinds of crap that no one else wants. You'd be the richest person in the world, somehow.
Or, as we've been trying to tell you, existence does not automatically grant any sort of value to something. If no one wants it, even physical commodities have no value, and in many cases negative value.Nothing, just like there's nothing governing gold, diamond, copper, oil, electricity, water, your TV signal, or the poptart you had for breakfast. Stop calling it a currency, that's just confusing you. You don't know what a currency really is, you just have this idea about what you think it is and that isn't meshing with the way bitcoins work. Just think of bitcoins as if they were any other commodity, like gold, diamond, or corn, or even a non-physical commodity like electricity or weather futures. These things do not have built in value, they have value only because someone wants them. In most cases people want them because you can do something with them, this is entirely true, but it is not necessary, there are tonnes of things that people want that don't do anything and people are willing to pay through the nose to get some of them (see weather futures). A hundred year old stamp cannot be used, it is too old to go through the system, it literally serves no purpose, and yet you would get thousands of dollars (or more) from the right collector for one. People want bitcoins, they have found uses for them, and people are willing to pay for them.
You're wrong. I keep trying to tell you this. The government does not have anything backing its money. They create and destroy money arbitrarily to control the supply, and they change interest rates to control the demand. And really neither of these things are done by "the government". There are no laws, there is no power, there is nothing in the US or any modern country which guarantees that the currency has any value whatsoever. A dollar has value because people want it, and people want it because it can be traded for other things, and it can be traded for other things because it has value. The only thing that keeps money having value is a circular argument, that's it. Not gold, not laws, not power, money has value because people want it because it has value.
No one. The same no one that regulates oil, the same no one that regulates electricity, the same no one that regulates bananas. The same no one that regulates the dollar bill in your wallet. Of course, all of these things ARE regulated in one way or another, but there is always the potential for any one of these things to suddenly drop out and become worthless, or have a sudden run and become worth a lot.
In practical effects, they wouldn't pay taxes on the bitcoins anymore than you'd pay taxes on a box of baseball cards someone gave you. If you then turn around and sell those baseball cards that is considered income and you would be expected to pay taxes on them. Similarly, a shop which accepts bitcoins would not be required to pay taxes on the immediate sale, but when they sell their bitcoins for local currency they would be required to pay taxes on that. That is income tax.Sales tax is different and depends on location. Some places don't require tax on online sales regardless of how it was purchased. I can buy things from Amazon.com as a gift for a friend in the US and not pay any tax, but if I purchase from amazon.ca I do. If I purchase something from amazon.com and have it shipped to myself I don't pay immediate tax but I am expected to pay tax on it either when it crosses the border or with my income tax at year end. To that end, places that accept bitcoins would still need to charge tax if that is required. Consider the following: an item costs $200, or 1 bitcoin, and there is 10% tax. You then pay $220, or 1.1 bitcoin. That $20 is legally property of the government, you're just holding onto it. Similarly that 0.1 bitcoin is property of the government, you are just holding onto it. When it comes time to pay your taxes, if the government accepts bitcoins then you have no problem making the transfer, just give them the 0.1. If they don't accept bitcoins then you simply give them the exchange value. If bitcoins are going for $250 now, you give 0.1 worth, or $25, even if bitcoins were only worth $200 each when the sale was made.
That's it, I'm done.
What is happening in Europe then? The Euro is being protected by lots of countries (governments).
Artificial enforcement in one location is not a guarantee on the whole. The Euro is maintained by decentralization and agreements between countries: they agree it has value and they give it to their citizens who want it because they think it has value. It is the exact same circle, it just goes wider, and requires more careful calculations for interest rates. Supply and demand are controlled in exactly the same way except it spans countries.It is in no distinct way different than the USD having the same "value" in Texas as it does in New York, and yet there are some things that cost more in Texas than in New York and vice versa.
Can you elaborate a bit more?
No, usually government policy is at the root of inflation. See Quantitative Easying. They dont protect the currency at all. And when Europe decided to steal money from Cyprus banks they knew it would make the Euro fall and they still did it.
Replace bitcoins by cash.
