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

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

#131

Post by mordae »

mehwoot wrote: post #118
stickfigure wrote: post #101

Earlier quoted context omitted.

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.

Whilst way you say may technically be true, the government could just declare this: Each person must publicly declare the bitcoin addresses that they hold. Any legitimate business accepting payment in bitcoins can only receive bitcoins from other registered addresses, else they are black flagged and no longer a registered address. Now, your average business and the banks are not going to circumvent these rules. The B…

Except that because of ECC you will eventually leak your private key if you reuse the wallet for too long. So now you need to report every new wallet. Good luck with that...

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

#132

Post by mordae »

tazzy531 wrote: post #24
flyinglizard wrote: post #22

Earlier quoted context omitted.

This is why I don't believe in BTC for the long term. It's not anywhere near anonymous. Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner (good luck buying stuff on SR using gold). Unfortunately, BTC is traceable if governments decide to spend the…

Isn't BTC's public ledger public? ( https://blockchain.info/ ) While it's possible to generate a new wallet to mask who the user is, the transaction flow can be traceable. This seems easier to trace than the flow of money through our banking system.

Yes, the BTC can be traced, but they cannot be associated with physical people until they identify themselves. Your anonymity is limited by trustworthiness of the person selling you the coins and the person you are buying physical goods from.

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

#133

Post by WalterBright »

threeseed wrote: post #128
WalterBright wrote: post #102

Earlier quoted context omitted.

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.

1. Wealthy people hoard large sums of cash. 2. Banks stopped making most of their money from deposits a long time ago.

> Wealthy people hoard large sums of cash.

I'm curious where you think they put all that currency. You could argue they're hiding it from the tax authorities by putting it in a safe deposit box, but by definition nobody knows how much cash there actually is in those boxes, and of course raising taxes on such cash hoards isn't going to affect such.

> Banks stopped making most of their money from deposits a long time ago.

Consider this advertisement:

https://www.key.com/personal/promotions/dda/200cash.jsp?sqkl...

If banks were not making money from deposits, why are they offering $200 in cash to open a checking account?

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

#134

Post by qnr »

mehwoot wrote: post #118
stickfigure wrote: post #101

Earlier quoted context omitted.

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.

Whilst way you say may technically be true, the government could just declare this: Each person must publicly declare the bitcoin addresses that they hold. Any legitimate business accepting payment in bitcoins can only receive bitcoins from other registered addresses, else they are black flagged and no longer a registered address. Now, your average business and the banks are not going to circumvent these rules. The B…

Even if it was technically possible[1], I don't think it's any more feasible than forcing citizens to publicly declare the serial numbers of dollar bills that they hold.

[1] By design, Bitcoin addresses are supposed to be single-use. Reusing them is a security risk and not recommended (recent android vulnerability is a good example - it only affected reused addresses). Every transaction done with the standard client usually creates a new address (to send the change), which is not even visible in the interface. Merchants accepting Bitcoin usually create a new address for each invoice, etc. etc.

In other words, the way Bitcoin is used is fundamentally incompatible with the public declaration of addresses. If the government has the power to change this, it might as well make Bitcoin completely illegal and not bother.

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

#135

Post by WalterBright »

beachstartup wrote: post #107
WalterBright wrote: post #102

Earlier quoted context omitted.

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 distrib…

I understand fractional reserve banking. It's a percentage (I think around 10%) of the deposits the government requires a bank to keep on hand. The rest of the deposits are all loaned out back into the economy.

Note that the government requires this reserve because otherwise the bank will loan it out, i.e. the bank doesn't actually desire to keep cash on hand. Neither do rich people. Even drug lords don't want cash hoards, it's why they launder it.

It's not splitting hairs over semantics. People who have money in the bank do not have a cash hoard that they are withholding from the economy.

As far as people keeping assets in safety deposit boxes, nobody has any idea how much is in them, so it's rather pointless to talk about them. I do find it hard to believe that Apple's billions in "cash" is really a hoard in a safety deposit box that's withheld from the economy.

>that is a working, popular, valid definition of "hoarding cash".

Not in the sense we are discussing of it being withheld from the economy.

(For fun, watch Breaking Bad, where one of Heisenberg's biggest problems is trying to convert cubic feet of cash into something he can spend.)

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

#136

Post by lewispollard »

nilved wrote: post #50
pnathan wrote: post #6

Unpopular opinion of the day: bitcoin is real money, and the government will regulate it and control it as such. In my opinion, the end-game is this: bitcoin addresses are taxable, with occasional tax agents spot-checking large accumulations of bitcoin to determine if said addresses fall within their jurisdiction. Bitcoin has the unusual ability to have a very tight trace on where a given virtual coin goes: that just…

> Unpopular opinion of the day: bitcoin is real money, and the government will regulate it and control it as such. Which government?

Was just thinking that. Say the US govt does put regulations on Bitcoin, do those regulations apply to me in as a UK citizen?

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

#137

Post by dasil003 »

kaonashi wrote: post #119
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…

(For Americans) If you earn income in bitcoins, you still have to pay tax in USD. If you earn income in Euros, you still have to pay tax in USD. Bitcoin does not absolve you of your tax obligations, even thought it might help you to evade them.

The interesting part would be what exchange rate you would use. The IRS publishes rates for major currencies, but Bitcoin is so volatile that a single yearly exchange rate could dramatically shift things one way or another.

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

#138

Post by Flenser »

kaonashi wrote: post #119
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…

(For Americans) If you earn income in bitcoins, you still have to pay tax in USD. If you earn income in Euros, you still have to pay tax in USD. Bitcoin does not absolve you of your tax obligations, even thought it might help you to evade them.

But do you pay based on what the bitcoin was worth in USD when you made the transaction, or when you pay your tax bill. Which exchange does that valuation come from?

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

#139

Post by saalweachter »

adestefan wrote: post #62
ebiester wrote: post #55

Earlier quoted context omitted.

Yes, but only via the gift tax and after you've reached the gift tax exemption, which is pretty big.

It's not that big. It's $14,000 per person per year.

36% of single filers in the US make less than $14000 per year.

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

#140

Post by saalweachter »

kjackson2012 wrote: post #88
adestefan wrote: post #62

Earlier quoted context omitted.

It's not that big. It's $14,000 per person per year.

The first $5M is exempt.

You are thinking of the inheritance tax. If I recall the gift tax and the inheritance tax interact, but you only pay the inheritance tax once, when you are dead.
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