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Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

marketwatch.com

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Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#141

Post by zaphar »

awrence wrote: post #132
Tepix wrote: post #46

Earlier quoted context omitted.

I guess we need a proper CO2 tax to encourage better technology than proof of work

The math on the PoW energy FUD just doesn't check out. - At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future. - bitcoin total addressable market cap if it took over the entire glob…

You make a lot of claims here but I don't see anything in your post to back up the numbers. I'm too lazy to go do this research myself so I'm left as a result with defaulting to disbelieving you.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#142

Post by freeone3000 »

skybrian wrote: post #74
uncomputation wrote: post #50

Earlier quoted context omitted.

Did you read the article? This is just about exempting non-exchanges from “broker” status i.e. keeping track of users’ personal information, transaction history, and data. The representatives said they agree people not paying taxes on crypto is a problem, but classifying them as brokers is not the solution.

Why isn’t it part of the solution? It seems like keeping track of who buys mining equipment (at least at large scale) would be a pretty important component in making sure that they pay taxes? Just like it’s important that brokerages report your stock transactions to the IRS.

This is not what broker requirements are.

If you are under broker requirements, and you wish to mine a new block, you must have, for every transaction you include in the block, the legal name of the person whose transaction it is, their address, and whether they are a politically compromised individual (ex, a general or politician of a nation that is not the US).

For every transaction you're going to include in the block.

This information is reasonable to expect from brokerages and exchanges, but not from miners, who are merely transaction processors.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#143

Post by meowface »

nprz wrote: post #25
whateveracct wrote: post #7

Earlier quoted context omitted.

BTC can be tracked better than cash

So why are ransomware hackers never prosecuted?

Because trackable doesn't mean "always trackable to a real human identity who's the original source". Bitcoin transactions are trivial for anyone to track, since everything is recorded on the public blockchain, but you can't necessarily follow the trail to the true culprit even if you're law enforcement. Especially if there are non-cooperative entities in the chain who are completely outside of your jurisdiction.

Though, the true answer to your actual question is what the other commenter said: it's mainly due to the Russian government turning a blind eye to it as long as they don't target Russian/ex-USSR citizens. So even if you do know a ransomware operator's full name and home address and everything else you can possibly know about them, you can't do anything about it besides hope they leave the country and try to catch them then.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#144

Post by zaphar »

nprz wrote: post #136
tablespoon wrote: post #129

Earlier quoted context omitted.

> So why are ransomware hackers never prosecuted? Because they're typically based in Russia, and Russia has a policy that it will not prosecute its citizens for computer crimes unless they perpetrated them against Russians or Russian organizations. My understanding is most ransomware has code to detect Russian computers (e.g. by checking localization settings), and will refuse to run if it finds itself on one for tha…

So why not just send the payment to a Russian bank?

Because Russian banks need to be capable of transacting with American banks and directly receiving money that is Ransom Payment related is a bad business decision.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#145

Post by cwkoss »

awrence wrote: post #132
Tepix wrote: post #46

Earlier quoted context omitted.

I guess we need a proper CO2 tax to encourage better technology than proof of work

The math on the PoW energy FUD just doesn't check out. - At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future. - bitcoin total addressable market cap if it took over the entire glob…

> eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions

Absolutely. It's impossible to accurately account for, but a significant part of why the US Military Industrial Complex is so over-provisioned is to maintain dollar hegemony. 800 international US military bases, the Iraq war, invasion of Libya, force projection exercises by the navy, etc. Being the world police is expensive (in both dollars and CO2), and we wouldn't need to be if we weren't trying to tenuously maintain our status as world reserve currency.

"the DOD is the world's largest institutional user of petroleum and correspondingly, the single largest institutional producer of greenhouse gases (GHG) in the world. 5 From FY1975 to FY2018, total DOD greenhouse gas emissions were more than 3,685 Million Metric Tons of CO2 equivalent."

https://watson.brown.edu/costsofwar/files/cow/imce/papers/Pe...

Certainly the US military has other goals besides maintaining dollar hegemony, but if the dollar wasn't the world reserve currency there would be less need and funds for maintaining such a bloated amount of power.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#146

Post by bee_rider »

Groxx wrote: post #118
admax88q wrote: post #95

Earlier quoted context omitted.

A CO2 tax and rebate is progressive. The poorest people would receive more back in a rebate than they pay. But the biggest CO2 users would pay way more than they receive back.

While I generally like CO2 tax/rebate/cap-and-trade systems: given how inefficient and polluting many low-cost techs are... not sure I can agree with that, particularly on the small scale down to individual people. Individuals have the least agency on decisions like this, since they have next to no purchasing power. Though we are talking about bitcoin, which does raise the technical/money base-level a fair bit.

Wouldn't it be easiest to tax some of the raw materials that go into fuel production, rather than tracking every fuel use? In that case, the CO2 tax will naturally fall equally to everyone, including individual people. The rebate is just there to cancel out the effect of an inherently regressive but technically convenient way of doing things.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#147

Post by emteycz »

freeone3000 wrote: post #135
X6S1x6Okd1st wrote: post #127

Earlier quoted context omitted.

Miners typically get their funds as income, not necessarily cap gains.

It's a gain based on your invested capital, isn't it? It's textbook capital gains. PoS, PoW, whatever.

No, mining is in no way capital gains. Capital gains is asset price increase.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#148

Post by Gh0stRAT »

toomuchtodo wrote: post #63
thehappypm wrote: post #60

Earlier quoted context omitted.

Venmo's core value right now is that it's ubiquitous. Everyone has a Venmo account and everyone trusts it. I paid an electrician through it yesterday -- no new Fed tech is going to replace it overnight, just like Zelle didn't kill it either.

https://www.forbes.com/sites/ronshevlin/2019/02/11/venmo-ver... (According to company reports, Zelle processed $35 billion in P2P (person-to-person) payments in Q4 2018 versus $19 billion for Venmo. For the full year, Zelle's total was $122 billion, almost double Venmo's $62 billion.) (2019) https://www.zellepay.com/press-releases/zeller-closes-2020-r... (Zelle® Closes 2020 with Record $307 Billion Sent on 1.2 Billio…

> to company reports, Zelle processed $35 billion in P2P (person-to-person) payments in Q4 2018 versus $19 billion for Venmo.

The thing that makes this a bit trickier is that Zelle is transparently used under the hood by some banks to move money between accounts owned by the same person. I've moved thousands of dollars between two of my accounts with Zelle but the alternative would have been an ACH transfer or depositing a check to myself, not Venmo.

I know it's just one anecdote, but when splitting a check, my social circle always reaches for Venmo, never for Zelle. And yet I've probably moved more total money via Zelle because I occasionally use it for different, higher-value transactions.

There's some selection bias at play for different transaction types (including many where people might not even realize they're using Zelle) so we should be careful looking at only the headline numbers.

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#149

Post by akira2501 »

Taek wrote: post #133
Tepix wrote: post #46

Earlier quoted context omitted.

I guess we need a proper CO2 tax to encourage better technology than proof of work

A proper CO2 tax wouldn't be disruptive to bitcoin, bitcoin only cares that everyone pays the same price for electricity. If the absolute cost of electricity goes up, nothing changes.

> If the absolute cost of electricity goes up, nothing changes.

The cost of electricity does impact the cost per transaction on the network, does it not?

Re: Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules

#150

Post by JumpCrisscross »

cwkoss wrote: post #139
danielvf wrote: post #22

Finally found the text of the amendment: https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%... The amendment is short and explicitly notes that that the following categories do not count as brokers: (A) validating distributed ledger transactions (B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distribu…

Also note that this crypto tax-reporting provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place. Exempting actors in the crypto space who facillitate crypto usage without ever having custodial control of the funds makes a lot of sense. (Just like envelope manufacturers shouldn't have to register as money transmitters because peop…

> this crypto tax provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place.

Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.

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