Ask questions on any subject & show appreciation by typing. Tipping is always optional.
Because tipping isn't allowed in every sub I wanted a place where we can help each other and be able to show our appreciation with Dogecoin, Bitcoin, or any other cryptocurrency. If the idea catches on I'd love to see more specific subs on other topics. If anyone has any ideas please let it be known, I love the idea of micro payments and think we have a interesting future ahead.
We should encourage the 3rd of January to be the day that we celebrate when Satoshi released the open source code for the bitcoin software. So we could do some kind of celebration every 3rd of January of each year.
Possible regultory schemes involving taxtion of bitcoin appreciation.
Let me start this with two disclaimers: I am not a tax expert. This is conjecture, and there may be complex nuiances in tax law that I am not considering. Furthermore, I am not a fan of taxes. I hate taxes just as much as the rest of you, and would love for bitcoin to be tax free forever. However, I know that banks and other financial institutions are very hesitant to touch bitcoin with a 10 meter pole, and I want bitcoin to suceed. For this to happen, bitcoin needs to be brought into compliance with various tax laws in many countries all around the world. So I think understanding these scenarios and deleberately selecting among them is in the best interest of the bitcoin community. There are two main scenarios that I want to consider, and which one we pick will affect either the fungiability of bitcoin or the ease of using it in commerce. Both scenarios are the result of a short list of mandates involving bitcoin. Under scenario #1:
Require bitcoin exchanges to collect TaxID or other information on taxpayers
Require bitcoin exchanges to report all bitcoin purchases/sales to the government.
Require merchants accpeting bitcoin to declare all sales to the government, including links to specific transactions in the blockchain and the dollar amount of goods sold.
Require the government to process these reports, determine tax obligation, and send them to taxpayers.
Under Scenario #2: Same as above, but require all merchants accepting bitcoin to collect similar TaxID on all customers. Here is an example under scenario #1: 1: A user buys bitcoin at a bitcoin exchange. The bitcoin exchange sends a report to the government, detailing the SSN or TaxID of taxpayer, total dollars paid, and total bitcoin recieved, and bitcoin transaction reference. 2: A user spends the bitcoin on goods and services. The bitcoin accepting merchant sends a report to the government, including the value of goods sold, bitcoins renderd, and bitcoin transaction reference. 3: IRS determines the identity of the taxpayer from previous transactions linking back to an exchange. 4: IRS calculates the gain or loss due to bitcoin appreciation/ depreciation and calculates tax liability. 5: IRS sends report to taxpayer. Under this system, taxation is guaranteed by the cooperation between the bitcoin exchange, bitcoin accepting merchant, and the IRS (or other tax authority) regardless of what the user does. It is simple for the user, imposes minimal costs for all businesses, and guarantees compliance with tax law. However, it will alter the fungiability of bitcoin: under this system: a bitcoin is no longer equal to a bitcoin, because the IRS is now watching it and whoever spends it at a store will have to pay taxes on the basis of all gains from since it was bought. A coin bought while the price was high will be worth more than a coin bought when the price was low, because they will produce different obligations upon spending them in a store. Is this a future that we can accept? I don't know. On the other hand, scenario #2 has problems of its own. Lets follow the money: 1: User buys bitcoins at exchange, exchange reports sale to IRS 2: User buys goods or services from a merchant with bitcoins, but must provide taxID to the merchant. 3: Merchant reports the transaction and taxID to government (this could be an automated electronically). 4: IRS compiles all bitcoiin transaction for the user, calculates tax obligation, sends report to taxpayer. So now the bitcoins are fungiable, equal in the eyes of the law, but now users must provide sensitive information to merchants. If customers provide fraudulent information to merchants, then they could escape taxation and even impose liabilities on people who have never heard of bitcoin. Merchants would need to collect identifying information on customers and verify their identity, which would defeat the whole purpose. In conclusion, like I said in the beginning, for bitcoin to be wideley used, it needs the cooperation of banks and regulations that gurantee the status of bitcoin transactions, profits, and tax liabilities, both in terms of money and who is responsible for keeping what records. As I have shown, to guarantee tax payments, either merchants would have to verify the identities of users, or the fungibility of bitcoin would have to be compromised. What do you all think?
Unathi Kwaza: "Bitcoin gains momentum with every governmental campaign against cash, which is the alternative peer-to-peer vessel 4anonymous private transactions.Bitcoin appreciates every time a central bank promotes spurious growth with negative interest rates and
Spend vs Hodl. Why would I spend my bitcoin on regular purchases when i can get 2% cashback while my Bitcoin appreciates?
Only reason I can think of is if the Vendor gives a huge discount because I paid with Crypto. And honestly, not too many mom and pop places giving out discounts. They already have a pretty thin margin.
My attempt to value Bitcoin. Appreciate your thoughts
Trying to have an informed conversation and ground myself in quantitative and analytical analysis which is absent the memes and group think mentality. Appreciate your thoughts on my analysis below (PDF is linked below). Understanding that cryptocurrency/BTC has no earnings/cash flow to analyze which makes fundamental analysis hard, I tried to compare BTC to other stores of value such as gold and fine art. Both gold and fine art are a store of value based primarily on scarcity and buyeseller perceptions. Making assumptions for how much gold is investment-based (backing out the amount held by central banks) and estimating a value for the fine art collection in the world (estimated 2016 sales at a 10x multiple), I get to a ~$5 trillion value that is effectively a store of wealth. This could be conservative as I'm not including other collectibles (rare coins, other precious metals, cars, fine wine, etc.) as well as real estate (ultra-high net worth individuals buying $10M+ properties as 2nd-nth homes). From there, I sensitize how much value from the ~$5T store of wealth can be translated to cryptocurrency. Last step is to see how much market share Bitcoin can take. I get to a 56% market share, based on looking at other dominant tech companies and how much market share they have (Apple iPhone, Facebook, Google, Netflix, Amazon), which happens to match up exactly with the current BTC dominance per www.coinmarketcap.com Based on all of this, the rough break-even to get to the current price is 8% of the $5T of gold/fine art calculated above. At 10%, BTC would be $13K, 25% $33K and 50% $66K. Obviously this is highly theoretical and highly inaccurate given the speculative nature of BTC, but I'd figured it'd be good to ground myself in quantitative analysis as I think about BTC and the potential. Curious as to your thoughts and opinions on this. BTC Value PDF
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