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Cash can be used for illegal purposes too. Private, unencumbered, tax-free transactions have licit purposes as well.

by v64 9y ago

nwah1 9y ago
How are you encumbered with normal currency? And how are you able to avoid taxes with bitcoin in a way that is legal?
- v64 9y ago
  > How are you encumbered with normal currency? A simple example would be if I want to pay someone a large amount of money (>$10,000) privately. Using credit or a check creates a financial record. Cash is the only way to keep the transaction completely private. With such a large sum, it can become non-trivial to transport that much cash, especially internationally. There's also the obvious issue of securely transporting that much physical currency. With cryptocurrency, I can transport arbitrary units of value over the internet with the security of cryptography. You may argue that there's no legitimate transaction that would occur at that high of a dollar amount, but I think that's a matter of opinion, and that individuals should be able to transact one to one without involving any third parties to transfer value. > And how are you able to avoid taxes with bitcoin in a way that is legal? This is a bit of a gray area. At the most illicit end, it's a total tax dodge by laundering/concealing income. At the legal end, I understand that there are cases where the taxes you're supposed to pay on bitcoin gains works out better than if you had made that gain through a stock or other type of investment. I haven't converted large amounts of cryptocurrency to USD or vice versa, so I'm not totally familiar with the IRS reporting for crypto assets.
root_axis 9y ago
So what? Their point is that cash has other uses as well besides the illegal ones. I would argue that bitcoin has some additional uses besides the illegal ones, but they're extremely niche.
- v64 9y ago
  Part of the reason why the US Dollar is so valuable is because of its extensive use in illicit operations. Even if a cryptocurrency is used for illegal purposes, that use increases its value for licit activities, as niche as they may be.

Cash can be used for illegal purposes too. Private, unencumbered, tax-free transactions have licit purposes as well.

by v64 9y ago

Cash can be used for illegal purposes too. Private, unencumbered, tax-free transactions have licit purposes as well.

nwah1 9y ago

How are you encumbered with normal currency? And how are you able to avoid taxes with bitcoin in a way that is legal?

v64 9y ago
> How are you encumbered with normal currency? A simple example would be if I want to pay someone a large amount of money (>$10,000) privately. Using credit or a check creates a financial record. Cash is the only way to keep the transaction completely private. With such a large sum, it can become non-trivial to transport that much cash, especially internationally. There's also the obvious issue of securely transporting that much physical currency. With cryptocurrency, I can transport arbitrary units of value over the internet with the security of cryptography. You may argue that there's no legitimate transaction that would occur at that high of a dollar amount, but I think that's a matter of opinion, and that individuals should be able to transact one to one without involving any third parties to transfer value. > And how are you able to avoid taxes with bitcoin in a way that is legal? This is a bit of a gray area. At the most illicit end, it's a total tax dodge by laundering/concealing income. At the legal end, I understand that there are cases where the taxes you're supposed to pay on bitcoin gains works out better than if you had made that gain through a stock or other type of investment. I haven't converted large amounts of cryptocurrency to USD or vice versa, so I'm not totally familiar with the IRS reporting for crypto assets.

root_axis 9y ago

So what? Their point is that cash has other uses as well besides the illegal ones. I would argue that bitcoin has some additional uses besides the illegal ones, but they're extremely niche.

v64 9y ago
Part of the reason why the US Dollar is so valuable is because of its extensive use in illicit operations. Even if a cryptocurrency is used for illegal purposes, that use increases its value for licit activities, as niche as they may be.