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Every important person in BitCoin just got subpoenaed by NY financial regulators

forbes.com

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Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#101

Post by stickfigure »

dendory wrote: post #57
DougWebb wrote: post #15

Earlier quoted context omitted.

A bitcoin address is just a container for some amount of BTC. Holding an amount of currency isn't taxable, and exchanging currency often isn't taxable either. (I'm generalizing across jurisdictions, but I think what I'm saying is true for most of them.) If you move money from one pocket to another, or one savings account to another (that you own), that's not taxable. Very many transfers between bitcoin addresses is j…

In Canada, even if you destroy all paperwork and tell the taxman that you don't remember anything, the law permits them to look at your assets and decide how much you owe. Then it's your burden to prove otherwise. Is it different in the US? Hell they could even force exchanges or code mainteners to build in a tax system.

Nobody can force opensource code maintainers to build anything. More importantly, nobody can force all exchanges to run any particular code; exchanges can exist in any political jurisdiction.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#102

Post by WalterBright »

threeseed wrote: post #75
bluedino wrote: post #67

Earlier quoted context omitted.

Taxed at what percent? Ludicrous.

Why ? Seems like a great tax to me. The people who are most likely to be hoarding large sums of cash are the type of people who you want to be taxing.

Nobody hoards large sums of cash. Cash is deposited into a bank, and the bank loans it out to someone who spends it. That's how banks make money, and why they are able to pay you interest on your deposit.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#103

Post by stickfigure »

mbreese wrote: post #60
sillysaurus wrote: post #47

Earlier quoted context omitted.

If the government steps in to "de-anonymize" bitcoin, then people will simply begin using tumbling services. People don't use those services right now because there's no impetus to. But as soon as the trust inherent to the public ledger is violated by creating a large-scale effort to track the flow of bitcoin, then people will counter that action with tumblers.

Yes, because tumbling services aren't designed to launder money or anything... Just using Bitcoin for transactions doesn't eliminate legal obligations. I imagine that if they ever got popular, tumbling services would be the first things that would be regulated (or shutdown by the gov't).

...except that anyone can set up a tumbling service in any political jurisdiction. It is not practically possible for the US to shut them down; the best they could do is try to police domestic users of tumbling services, which is a much harder problem.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#104

Post by jeffasinger »

stickfigure wrote: post #101
dendory wrote: post #57

Earlier quoted context omitted.

In Canada, even if you destroy all paperwork and tell the taxman that you don't remember anything, the law permits them to look at your assets and decide how much you owe. Then it's your burden to prove otherwise. Is it different in the US? Hell they could even force exchanges or code mainteners to build in a tax system.

Nobody can force opensource code maintainers to build anything. More importantly, nobody can force all exchanges to run any particular code; exchanges can exist in any political jurisdiction.

However, a government can probably make it very difficult to impossible to get money in and out of an exchange for it's citizens, if that exchange chose not to implement whatever features it requires.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#106

Post by jeffasinger »

mbreese wrote: post #60
sillysaurus wrote: post #47

Earlier quoted context omitted.

If the government steps in to "de-anonymize" bitcoin, then people will simply begin using tumbling services. People don't use those services right now because there's no impetus to. But as soon as the trust inherent to the public ledger is violated by creating a large-scale effort to track the flow of bitcoin, then people will counter that action with tumblers.

Yes, because tumbling services aren't designed to launder money or anything... Just using Bitcoin for transactions doesn't eliminate legal obligations. I imagine that if they ever got popular, tumbling services would be the first things that would be regulated (or shutdown by the gov't).

It is also difficult to tell the difference between a tumlbler service, and some other various more legitimate uses.

The level of regulation it would take to actually trace lots of tiny transactions between pseudonymous parties is next to impossible. How is me paying a friend back for half the pizza we shared to a new address of his going to be handled?

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#107

Post by beachstartup »

WalterBright wrote: post #102
threeseed wrote: post #75

Earlier quoted context omitted.

Why ? Seems like a great tax to me. The people who are most likely to be hoarding large sums of cash are the type of people who you want to be taxing.

Nobody hoards large sums of cash. Cash is deposited into a bank, and the bank loans it out to someone who spends it. That's how banks make money, and why they are able to pay you interest on your deposit.

> Nobody hoards large sums of cash

i completely disagree.

first of all, you're arguing semantics, and you know very well that there are many fractional reserve bank accounts with lots of accumulated cash available for withdrawal at any time. that is a working, popular, valid definition of "hoarding cash".

second, do not underestimate the amount of cold, hard, paper (polymer?) cash hidden in safe deposit boxes distributed around the world. you can bet your bottom dollar (har har) that this cash isn't being lent out to commercial banking clients and mortgage buyers. it's sitting in boxes, unused. in a certain sense, it's an anti-inflationary savings mechanism.

that's not even counting the gold, platinum, pearls, diamonds, precious gems, and etc.

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#108

Post by colanderman »

jchrisa wrote: post #95
colanderman wrote: post #84

Earlier quoted context omitted.

How is that any different than controlled dilution of a fiat currency, like the Federal Reserve does? The net result is the same.

It's actually sort of the opposite. Interest based money is designed so that the numeric value grows over time. A tax on holdings makes its numeric value decrease over time. See http://en.m.wikipedia.org/wiki/Demurrage_(currency)

No, it's the same thing, as that link points out:

Both inflation and demurrage reduce the purchasing power of money held over time, but demurrage does so through fixed, regular fees while inflation does so through expansion of the money supply by a central monetary authority distributing newly issued currency or through endogenous money creation (such as fractional reserve banking).

Re: Every important person in BitCoin just got subpoenaed by NY financial regulators

#110

Post by cookiecaper »

jasonlingx wrote: post #96
threeseed wrote: post #75

Earlier quoted context omitted.

Why ? Seems like a great tax to me. The people who are most likely to be hoarding large sums of cash are the type of people who you want to be taxing.

Seems like a great way to discourage saving and keeping people living hand to mouth.

Which, of course, is the basis of modern macroeconomics -- keep people spending as much as possible.
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