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The value of bitcoin was always to evade taxes and launder money, both of which are criminal enterprises, the only thing that is changing is enforcement.
by ouid 9y ago
The value of bitcoin was always to evade taxes and launder money, both of which are criminal enterprises, the only thing that is changing is enforcement.
- pmoriarty 9y agoDon't forget rampant speculation and tulip mania. The author of the article speaks disparagingly of a "money grab" by the government, as if money grabbing wasn't what most bitcoin traders are after.
- afsina 9y agoGovernment grabs money by force. That is the difference I guess.
- labster 9y agoGovernment is the legitimate exercise of force. That's kind of the whole reason it exists.
- icebraining 9y agoThat doesn't mean this particular use of force is legitimate. Unless you mean that all uses of force by the government are legitimate, in which case you'll have much to defend.
- labster 9y agoThey're almost all legitimate uses of force by definition, unless the government breaks the law. This is orthogonal to moral or utilitarian concerns, however. But whenever I see people upset government uses force, I think: of course it does. It's like birds using wings or Emacs users using the control key.
- icebraining 9y agoMy point is that people may be upset at this particular use of force, not of the use in general. That it is legal is beside the point.
- legulere 9y agoI much prefer the government collecting a fair share of money to uphold public goods than criminals running away with all my money (happened to me with shares in a Chinese miner).
- ersii 9y agoHm, what's the difference? That the money goes somewhere you like?
- adrenalinelol 9y agoPerhaps the value is the fact a central bank can't obliterate the value of the currency based on a whim, using a bunch of esoteric economic logic to justify such policies?
- ouid 9y agosee "taxes"
- CJefferson 9y agoNo, instead a small set of Chinese miners can obliterate the value instead.
- virtuexru 9y agoHow wrong you are sir
- mazamats 9y agoHave you looked at the current hashrate distribution?
- badosu 9y agoI just did, I consulted https://blockchain.info/pools https://blockchain.info/pools The 4 top pools are chinese and amount to almost 40% of the latest blocks mined.
- Jabanga 9y agoMiners can't change the issuance schedule. They can only delete blocks and form new ones with valid* transactions, and only if they collude, and are okay with destroying the value of their capital assets. * transactions where the private key associated with a public key holding value authorizes an outgoing transfer of value.
- CJefferson 9y agoThey can stop you spending the money, and the "they wouldn't do it as they would kill the goose" applies to banks and governments too.
- giobox 9y agoI agree with this to some extent. As much as I consider myself a 'small l' libertarian, is a society in which taxes could be evaded so freely on such a large scale really desirable? We already struggle with this problem enough with 'traditional' financial tools. It's certainly worth thinking about.
- pdelbarba 9y agoI don't fully understand the article... How is this different from the days when everyone just used cash? On a side note, I don't really understand how bitcoin is somehow this new anonymous wealth hiding scheme. I can lookup any given wallet that's participated in a transaction (everything is public), so what stops me from de-anonymizing people? Lets say in the future everyone pays with bitcoin online and I'm working for the feds screening packages for UPS. I just saw a few amazon shipments come through for somebody's home address, one with a specific computer, one with a box of pens, and one with a pair of shoes. Go back, look up the item prices and then cross reference with transactions that took place in that time period. Yea, you can use multiple wallets and addresses but at some point, there'll be enough public domain information to track you down, especially with current advances in ML.
- Mendenhall 9y agoI would say much of the negativity is because certain very large institutions have a huge incentive to not want bitcoin to "succeed" and would paint it in a negative light any way they could.
- AnthonyMouse 9y ago> is a society in which taxes could be evaded so freely on such a large scale really desirable? Tax evasion has been and always will be an issue of popular morals. All you need for evasion is a medium of exchange (or barter) and for both sides not to report the transaction. Collecting taxes is trivial when either (or both) of the parties to a transaction report it and impossible if they don't. So the only way taxes can work is for most people to be convinced that the taxes are reasonable and what they pay for is justified. If most people are not convinced then they'll lie for each other and the government is screwed; see Italy. Central banks can't save you from that, only your own citizens can. And the laws against money laundering have nothing to do with tax evasion by the common man and everything to do with the war on drugs. Putting a stop to that train wreck would only help everybody.
- dhfhduk 9y agoI don't agree with the idea that the value of bitcoin was always to evade taxes and launder money. Maybe that's a primary motive for many, but I don't think that constitutes the value of bitcoin in toto. I have no skin in the bitcoin game--I've never possessed any bitcoin and don't feel any burning desire to in the near future. As monetary transactions have moved to the electronic sphere, there's been an important shift from how value is verified. With paper currency, the physical form of the coin or bill acts as verification of its value (thus the focus on counterfeiting, etc.). The trust in the value comes from the physical object possessing certain characteristics. Electronically, though, in the current system, everything is based on verification by trusted institutions. So there's no way of Alice paying Bob without it being verified by Ted, who then makes a lot of money and has lots of control over the financial system. Bitcoin and other cryptocurrency tries to get back to the idea of peer-to-peer financial exchange without needing that third party, which I think is really valuable in society. I agree with the concerns being raised in the article that there's a danger of criminalizing peer-to-peer financial transactions, because it basically starts granting new power to institutions that were previously held indirectly by the currency issuing bank. Also, if everyone in my city wanted to start trading in tulips, why should the government criminalize the tulip trade (as opposed to criminalizing not reporting the value of the tulips you own)?
- dragonwriter 9y ago> Bitcoin and other cryptocurrency tries to get back to the idea of peer-to-peer financial exchange without needing that third party No, it doesn't. Because it relies on validation by a number of third-parties (whose identities and degrees of influence are opaque), who must (collectively, if not individually) be trusted and who (again, collectively, though this can end up fairly narrowly concentrated) control the financial system in the same way as “Ted” in your hypothetical.
- darawk 9y agoThat's a silly argument. Bitcoin does not rely on validation by 3rd parties. It relies on validation by a large number of independent third parties who can only act in a way inconsistent with the rules of the system if a majority of them collude. And even then what they can do is very narrowly prescribed (a double spend attack, specifically). That is vastly different from trusting a single independent third party like a bank who has literally no restrictions whatsoever on what they can do unilaterally.
- Mendenhall 9y agoWhile I am sure those reasons play a part I think thats not even close to all of what makes it valuable. Ease of use is a huge one. I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block, other cryptos even faster. One can post their wallet address and make jokes on social media and receive bitcoin just because people like the content and are happy to support it. (yes that works) You can receive bitcoin without giving anyone your name,address,etc,same with sending it to someone and do so for legal purposes. Try to do any of those 3 above with dollar bills and its just not even in the same realm. I see great value in that.
- Analemma_ 9y ago> Ease of use is a huge one. Bitcoin is very complicated to use, doubly so to use securely. I've lost count of the number of stories I've read of someone losing everything, and then being chided by the community because "you deserved it, you weren't doing it the ~right way~", and of course there are a thousand mutually incompatible explanations as to what the right way is. This happens so often there's an entire subreddit for it. (EDIT: For example, 12 hours ago an Ethereum startup burned $13 million because of a typo: https://www.reddit.com/r/ethereum/comments/6ettq5/statement_on_quadrigacx_ether_contract_error/ https://www.reddit.com/r/ethereum/comments/6ettq5/statement_.... The top comment, of course, is "you deserved it, validate your inputs". I'm not kidding when I say this happens every day) > I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block. Which is anywhere from half an hour to days and days, depending on how much you're willing to pay in fees. > One can post their wallet address and make jokes on social media and receive bitcoin just because people like the content and are happy to support it. (yes that works) You can receive bitcoin without giving anyone your name,address,etc,same with sending it to someone and do so for legal purposes. I can do all of this with a PayPal account, both more quickly and with lower fees than Bitcoin. I need a real name to cash out, but you need that with Bitcoin too unless you're using a service that's breaking the law and not doing KYC. > Try to do any of those 3 above with dollar bills and its just not even in the same realm. Yes, digital transactions are certainly faster and more convenient than physical ones, because that's an apples-to-oranges comparison. On all these metrics though Bitcoin loses to PayPal, and when you're losing to a company that is the embodiment of pure evil, that's not a good look.
- leggomylibro 9y agoCriminal to governments, sure. But peaceful political activism is criminal to many governments. Bitcoin serves an important purpose of helping to circumvent local product/service bans. Yes, that is likely illegal. But it's certainly not categorically wrong.
- 303brad 9y agoWith deterministic statements like this you are no different than the current President of the United States. In my opinion you should approach topics from more than one angle and then only make deterministic statements when you decided what agenda you want to push.
- georgeecollins 9y agoThere are all kinds of legal and legitimate reasons to pay for something in a way that isn't easily tracked. You can do it now with cash and it isn't illegal. Just because you want privacy does not mean you are a criminal.
- legulere 9y agoBut Bitcoin is just Pseudonymous, not anonymous and tracks all transactions publicly. Regular banks offer better privacy.
- Kiro 9y agoDo you have any examples of those?
- jpttsn 9y agoBuy a surprise gift for someone who shares your bank account.
- Broken_Hippo 9y agoDon't share a personal bank account. This problem is solved, plus it avoids a few pitfalls in case the relationship or other person goes sour.
- skolsuper 9y agoWhistleblowing websites or donation to banned media sources.
- astrodust 9y agoBitcoin is the opposite of private. Everything you do, every single transaction, is recorded, shared with everyone, forever.
- mahyarm 9y agoI found it useful for lower costs in sending money across country and currency borders. Someone will reply and say it's not actually cheaper, but what is available for the average joe it is definitely cheaper. It's also faster and more convenient if both sides have bitcoin exchange accounts.
- wmf 9y agoOne may wonder, however, why traditional money transfer is more expensive if it doesn't even require mining. Is it because of regulations by any chance?
- roguecoder 9y agoNonsense; they are also useful for purchasing illegal goods and services!
- Jabanga 9y agoPeer-to-peer electronic cash has numerous uses beyond tax evasion and money laundering, just as physical cash does. But to your point, even these laws are part of a new trend. Money laundering is a relatively new crime, and widespread taxation of private transactions only came into force in the early 20th century, with governments around the world instituting income taxation. 50 years ago, almost all transactions were in cash, and the income tax was widely evaded through the use of cash. The government knew very little about what people were buying and how much wealth they had. With the emergence of electronic payment systems, large Trusted Third Parties emerged that collated transactions, and settled them periodically through the respective central bank. These TTPs became gatekeepers and information gatherers, and enabled central authorities to monitor the most intimate interactions of the population - their financial interactions - in incredible detail. Cryptocurrency holds the promise of returning privacy and economic power back to the decentralized distribution that historically existed, but power, once attained, is jealously guarded, and those who have it will likely not want to give it up.
- joering2 9y agoIt is also important to say that the trend of making you most likely criminal "because you use cash" will continue. It is already known restaurants owners are getting in trouble for small deposits. Its not even $10,000 or $9,000 you deposit.. if you happen to make daily deposits of even few hundred dollars you are guilty of "structuring" aka smurfing. Another thing is to make sure you can track back your physical hoard of cash. My friend's father is in deep explanations with FBI (and over $50,000 in attorney fees) because when his wife passed away he took all the money they hoard at home under floor and put it in the bank. Some $600,000 of it. IRS didn't like that and proving you had a job all your life and you paid taxes on Over $10,000,000 in income did not stop the case.
- Shorel 9y agoOr to avoid losing too much money when traveling abroad and using your credit card in bank-initiated currency conversions. Seriously, some simple grocery shopping I did had a 'currency exchange' tax of about 10% - 15%.
- petre 9y agoLearn from the Greek. Use cash.
- dade_ 9y agoAnd the Internet is for porn, but some of us would like to avoid paying currency exchange fees and would also like a hedge against their local government's currency. Of course, the wild fluctuations in value don't make this much of a reality today, I think the promise is real. Look at all of the people that lost everything during the cuban revolution, argentina, greece.
- deleted 9y ago[deleted]