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48-nation bloc to crack down on using crypto assets to avoid tax

theregister.com

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Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#91

Post by tnel77 »

siftrics wrote: post #68
Geee wrote: post #54

Earlier quoted context omitted.

People confuse a lot of things about volatility, risk, and long term valuation. Bitcoin is an inherently good long term store of value, because it has deterministic and finite inflation schedule, which is also plausibly immutable (contrary to fiat cryptocurrencies, called "cryptos"). On the other hand, fiat currencies are a lousy store of value, because they have non-deterministic, but always positive inflation sched…

> contrary to fiat cryptocurrencies, called "cryptos" This is wrong. No one says this.

It’s pretty common in the Bitcoin community.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#93

Post by phone8675309 »

injeolmi_love wrote: post #53
ljf wrote: post #44

Earlier quoted context omitted.

I'm intrigued as to the actual mechanisms of this, especially currently. How does a person (or organisation) in Gaza turn crypto into cash or goods - given the controls that exist in everything that comes into or out of Gaza.

The price of crypto isn’t the same in every jurisdiction due to restrictions on capital flows. If the price of crypto is lower in a jurisdiction, then crypto generating activities such as mining or freelancing become more profitable. If the price is higher inside the jurisdiction, then smugglers are incentivized to sell goods for crypto. These activities will find a balance within the jurisdiction. I don’t know enoug…

Ah yes, the crypto miners in Gaza where not even hospitals can get a steady supply of fuel and electricity.

Crypto nerds are completely detached from reality.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#94

Post by petertodd »

jon-wood wrote: post #29
koolba wrote: post #22

Earlier quoted context omitted.

> I know the real cynical answer is that most people just don’t report correctly, but I’m curious how you’d do it if you wanted to be legit. If you want to follow the letter of the law, you need to consider each and every transaction in calculating your cost basis, converting to USD at each step. The latter is particularly problematic as it’s possible to transact in something that does not have a clear USD price. So…

> Not having any standard way of getting the details is another problem. If each and every transaction is not recorded at the time of execution, good luck trying to get that detail back again. If only there were some sort of publicly available record showing transactions performed. (Yeah, I know, they don't include the USD value)

> If only there were some sort of publicly available record showing transactions performed.

These days the majority of Bitcoin transactions by number probably happen on Layer 2 technologies, mainly Lighting, that do not record transactions directly in the Bitcoin blockchain. There is no publicly available record of Lightning transactions. It's quite difficult to even estimate how many are being done.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#95

Post by petertodd »

Analemma_ wrote: post #35
ljf wrote: post #5

Earlier quoted context omitted.

I was talking to a very pro-crypto friend - part of my (sour grapes) issue with Bitcoin is that is actually a pretty impractical way to purchase items day to day - but he pointed out that this is more of a feature than a bug. He likened it to buying and selling physical gold as a store of value, I hadn't thought of it that way before. I am still stinging from not buying in when I first became aware of it (approx. $1…

> but he pointed out that this is more of a feature than a bug -- he likened it to buying and selling physical gold as a store of value This is a lot of cope and ex post facto justification. "Store of value which can't actually be used for real-world transactions" was absolutely not the rallying cry for Bitcoin for its first many years of existence, and people only pivoted to that when it became undeniable that Bitco…

> and people only pivoted to that when it became undeniable that Bitcoin was not fit for its original intended purpose.

These days it is likely(1) that the majority of Bitcoin transactions by number(2) are being done via the layer 2 system Lightning, which does have nearly instant payments and low fees. Transactions via Lightning are not recorded on the blockchain, even though you can easily hold funds in a non-custodial way.

I happen to be in El Salvador at the moment, and with the exception of the Chivo Bitcoin ATMs run by the government, every single vendor selling things for Bitcoin has accepted Lightning.

1) It's hard to know for sure, as Lightning transactions have quite good privacy, so it's difficult to get estimates of how many there are in total. But decent lower-bound estimates exist: https://bitcoinmagazine.com/markets/lightning-network-sees-r...

2) Of course, by value it's very likely that on-chain transactions dominate, as there are lots of very high value, multi-million+, transactions out there.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#96

Post by latchkey »

eric-hu wrote: post #90
latchkey wrote: post #75

Earlier quoted context omitted.

Saylor always buys the top.

Is the rationale behind this statement that you’re doing DCA and you’ll come out ahead in the multi year timeline?

He borrows against his BTC to buy more BTC. That is a much better long term play when you are holding an asset that is of a fixed total size. When you buy becomes irrelevant.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#97

Post by petertodd »

23B1 wrote: post #28
fdkjhasdf wrote: post #19

Earlier quoted context omitted.

It's not difficult at all. This is 2023, we have spreadsheets, lol. You just generate a list of all transactions and losses/gains. Active traders have been doing this one way or another for a century now with stocks and derivatives. If cryptocurrency was actually used for purchasing goods/services it would be more tricky.

Single transactions are easy to do. Extremely hard when your trading volume is substantial.

With things like Lightning tipping, implemented on stacker.news and nostr, a normal person could easily do tens of thousands of tiny Bitcoin payments in a year, each with a theoretical capital gains reporting requirement.

This is ridiculous, which is why most countries don't apply capital gains to currencies regardless of how volatile they are. Bitcoin should be treated no differently. You're already taxed on the income used to buy the currencies in the first place anyway.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#98

Post by theorytheory22 »

Geee wrote: post #54
roenxi wrote: post #2

> ... and a lousy store of value I expect this to be true eventually, but so far Bitcoin has been doing OK as a store of value. Unless people bought in the relatively short peaks, HODLers aren't losing crazy amount of money and one could reasonably anticipate that it'll reach $60k/bitcoin again in the near future. There seem to be people convinced that the crypto types are coming out a long way behind but I'm not rea…

People confuse a lot of things about volatility, risk, and long term valuation. Bitcoin is an inherently good long term store of value, because it has deterministic and finite inflation schedule, which is also plausibly immutable (contrary to fiat cryptocurrencies, called "cryptos"). On the other hand, fiat currencies are a lousy store of value, because they have non-deterministic, but always positive inflation sched…

You're missing the forest through the trees. Bitcoin doesn't have value beyond what can be converted into real currency. Real currency is used to buy things. BTC isn't. The currency-BTC market IS the entire value of Bitcoin. None of the other stuff matters, because BTC is solely denominated in actual currencies.

BTC is non-inflationary? Doesn't matter. You only use it to buy USD or actual currencies. If there's less demand for BTC, BTC value goes down. And guess what? Demand is fickle.

The cyrptographic property protection is ok in theory. But try and point out somebody it's helped? And by that I mean a non-criminal/extortionist/money launderer.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#99

Post by petertodd »

phone8675309 wrote: post #93
injeolmi_love wrote: post #53

Earlier quoted context omitted.

The price of crypto isn’t the same in every jurisdiction due to restrictions on capital flows. If the price of crypto is lower in a jurisdiction, then crypto generating activities such as mining or freelancing become more profitable. If the price is higher inside the jurisdiction, then smugglers are incentivized to sell goods for crypto. These activities will find a balance within the jurisdiction. I don’t know enoug…

Ah yes, the crypto miners in Gaza where not even hospitals can get a steady supply of fuel and electricity. Crypto nerds are completely detached from reality.

While I mostly agree with you, note that Gaza does have an large amount of rooftop solar, which theoretically could be used to mine crypto. Mining Bitcoin with expensive imported fuel doesn't make much sense.

Anyway, far more money is sent to Gaza, and Hamas, in the form of Western aid from governments. Stopping the flow and misuse of that money is far more important than crypto.

Re: 48-nation bloc to crack down on using crypto assets to avoid tax

#100

Post by fullspectrumdev »

yjftsjthsd-h wrote: post #81
siftrics wrote: post #67

Earlier quoted context omitted.

You can do extremely complicated things on chain that require manual human analysis to figure out how to report it. You can do this thousands of times per year. It adds up to a huge amount of work.

Forgive my ignorance; could you give an example of something that would be more complex, especially to the point of requiring human intervention? Does the tax code care about more granularity then that you started with X USD/Euros/BTC/ETH/... and ended with Y USD/Euros/BTC/ETH/...?

The tax code in many countries does care - crypto to crypto exchanges that never touch FIAT can be taxable events
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