18 ms·

South Korea considers cryptocurrency tax

167 points by fourstar 9y ago

non_sequitur 9y ago
Updated: South Korea Clarifies Position After Reports of Possible Ban on All Crypto Transactions "On Monday, Financial Services Commission (FSC) Chairman Choi Jong-ku clarified to reporters at a luncheon meeting that “the FSC is mapping out measures to restrict [cryptocurrency] transactions to some extent,” which he did admit include “an all-out ban,” Yonhap reported. “The restriction is aimed at minimizing side effects of bitcoin transactions and reducing speculative investment,” the news outlet added. Choi was then quoted by Asia Economy: We are discussing to what extent the government will regulate the trade, including the prohibition of trade. The chairman noted that the Ministry of Justice is currently reviewing measures to regulate cryptocurrencies. News.Bitcoin.com reported last week on this ministry being put in charge of a new Virtual Currency Task Force in order to “set up and implement the regulatory measures through consultation between the related ministries.” And also "It is expected that the government measures related to virtual currency will not be a one-sided regulation that prohibits virtual currency trading altogether, but a regulation that limits investment amount and investment qualification." https://news.bitcoin.com/south-korea-reports-ban-all-crypto-transactions/ https://news.bitcoin.com/south-korea-reports-ban-all-crypto-...
- seibelj 9y ago
  Thank goodness it’s impossible to ban crypto! Everyone in SK withdraw from the exchanges before they seize it!
  - lucozade 9y ago
    > Thank goodness it’s impossible to ban crypto! No it's not. It may be hard to prevent all SK citizens from using cryptocurrencies as SK is a reasonably open society, but it would be straightforward to ban their use.
    - noarchy 9y ago
      A ban won't stop crypto any more than it stops illegal drugs, prostitution, etc. That said, there would be an effect on the crypto markets if a handful of major nations took action. So the question I have would be: will they aim for the taxes (presumably allowing crypto trading), or for an outright ban?
      - kazagistar 9y ago
        Sure, but unlike drugs or prostitution, aggressive police action doesn't harm any underprivileged classes, but rather a bunch of affluent tax evaders.
        mtgx 9y ago
        Do you think most people owning cryptocurrencies are affluent tax evaders?
        pjc50 9y ago
        Well, they are now the price has shot up. Although this does remind us that "affluent" and "liquid" are not the same thing and that capital gains tax usually requires realising gains to be a taxable event.
        QAPereo 9y ago
        The 1000 or so majority owners probably are.
        WJW 9y ago
        Yes? It's certainly not the people struggling to buy food if that's what you are implying.
        noarchy 9y ago
        They may be affluent, particularly when compared to people struggling to buy food. That doesn't make them tax evaders. Though it should be added that the tax situation regarding crypotcurrencies isn't clear in every country.
  - pjc50 9y ago
    SK has quite a "policeable" internet; for a while they required use of real names, although that has ended. https://thenextweb.com/asia/2012/08/23/south-korea-scraps-law-requiring-use-real-names-online/ https://thenextweb.com/asia/2012/08/23/south-korea-scraps-la...
  - yongjik 9y ago
    > Everyone in SK withdraw from the exchanges before they seize it! Pick 100 random Koreans who traded in any cryptocurrency in the past 30 days, and I guarantee that 95 of them will never figure out how to store their coins in their hard drive even if someone held a gun to their heads. You don't have to bust doors to seize cryptocoins. Just make its usage sufficiently "socially unacceptable", and people will find it's not worth the hassle. Sure, some determined people will keep using them, but they are not what the government is worried about. The government is worried about all those average Kims and Parks who threw their life savings into $(some coin nobody heard about), because when the inevitable hits these people and their families may lose jobs, career, and livelihood.
- adsfasdf2332 9y ago
  haha. A ban is not going to happen when their neighbor Japan has legitimized cryptocurrencies and they risk being left behind in a possible economic shift. Keep dreaming though!
verroq 9y ago
In addition to bitcoin’s swings of 20-30%, the premium with respect to USD also swings 10-20% in local South Korean exchanges. I really wonder what is going on in there sometimes. The premium is persistent and doesn’t seem to be arbed out. Is getting money in and out of South Korea so difficult that a 20% premium doesn’t yield an arbitrage opportunity?
- worldburger 9y ago
  Precisely. Tight currency flight controls (see Korean Anti-money laundering laws). $50,000/year is the limit per capita for personal use. BUT even then, you’d need a Korean bank account which is difficult for non-resident foreigners to get.
  - unixhero 9y ago
    How about not using fiat currency whatsoever
  - charlesdm 9y ago
    Do the same limitation apply to legal entities? Why not just set up a company?
KasianFranks 9y ago
Korea: Crypto is changing the world before our eyes, it's a black and white swan event combined. Better to adapt than stick your head in the sand.
- eksemplar 9y ago
  Crypto is changing the world. I've made money off of bitcoin, but I've done so responsibly, like I suspect must people on HN have, by only betting what I could easily afford to lose. By going mainstream that sort of reasonable/safe approach has ended, and people are now happily risking their entire savings. This will certainly be great for some people, but it also has the potential to be absolutely devastating. In America you may not care about that, but in my part of the world, this means that we're sitting on a real risk of society having to clean up after a bunch of people lose everything. The old world financial system is regulated to prevent regular people from losing everything on investments. I suspect that in time Crypto will be regulated similarly. This isn't very libertarian, I know, but I'm old enough to have seen a few bubbles burst and the result isn't pretty.
  - indubitable 9y ago
    Can you elaborate on "society having to clean up after a bunch of people losing everything."? Perhaps I'm reading too much into your post, but so far as I can tell you're suggesting you reside in a nation with stronger social systems than the US. And a number of people failing, who otherwise would not have, could pose a strain on such systems. Yet this is confusing to me since presumably we're speaking of older individuals. Young individuals are, generally, still earning money and so they are already sustaining their own livelihood regardless of their savings (or [sudden] lack thereof). But back to the older individuals, would these individuals not already be receiving social benefits - healthcare, social security, etc? It seems that their personal dependence on these would increase - but their burden on society would not change, at least not particularly meaningfully. Like I said, probably reading way too much into your comment. Curious what you meant!
    - TeMPOraL 9y ago
smaili 9y ago
> Australia’s central bank governor Philip Lowe warned on Wednesday the fascination with the assets felt like a “speculative mania.” Just curious, what is it about speculation that has govs so worried? It’s quite clear at this point Bitcoin has grown far too large and most are now speculating on its value as a store so what benefit is there to step in, attempt to regulate it, and risk its undoing? To me, I’m reminded of Sean Parker’s Social Network quote about putting ads on TheFacebook, It’s like you’re throwing the greatest party on campus and someone’s saying it’s gotta be over at 11
- JetSpiegel 9y ago
  If non-professional investors start putting their life savings into Bitcoin and it crashes, the government can't just say "though break, you will starve on retirement"
  - dmichulke 9y ago
    Why can't they? Surely they can indebt every person with accumulating govt deficits (currently 62k in the US) so what's different? https://ycharts.com/indicators/us_per_capita_public_debt https://ycharts.com/indicators/us_per_capita_public_debt
    - toomuchtodo 9y ago
      Because those people vote.
    - TeMPOraL 9y ago
      Because a) this debt at least pretends to pay for the comforts of their lives like infrastructure, security - and in some countries - education and healthcare; and b) national debt does not work the same way a private individual's debt works.
      - dmichulke 9y ago
        a)So taking on debt pretending to do something good is fine? What if I say they do something bad with that debt too, is it still OK? b) Interest rates are being paid for decades via taxes, money that could have been put to use much better. I'd say it's similar enough and don't think "it works differently" is an argument here
tzfld 9y ago
When this bubble will going to break, that will be a huge setback. This is definitely not a good thing for the future of cryptocurrencies.
josephagoss 9y ago
Edit: ok not 100% sure of the solution, but I think that there should be a way for the government to stop people putting their life savings into Bitcoin.
- derefr 9y ago
  It'd be annoying if restricting "investment" into cryptocurrency also restricted the ability to use a cryptocurrency as a medium of exchange. Sure, stop people from buying $10k of a coin and holding it. But hopefully don't restrict people from buying $5 of it to immediately send to someone. (Though I'm honestly not sure how you would be able to legally have one without the other.)
  - deleted 9y ago
    [deleted]
- __warlord__ 9y ago
  This, in fact, goes against what Cryptocurrencies represent and what scares me the most is that people, in this case governments, are trying to regulate the new with the old. Remember, innovation always win.
  - deleted 9y ago
    [deleted]
  - charlesdm 9y ago
    None of the proposed laws are unreasonable though. Anyone who thinks no regulation is coming to this space is delusional. Regulation is good. KYC and AML policies are good. That means regulators are taking proactive steps to keep these currencies in the system, rather than banning them.
    - whataretensors 9y ago
      Good regulations are good. Bad regulation is untested code, written to benefit lobbyists. Like the accredited investor regulation which is essentially codified class warfare.
jfig 9y ago
i see this has positive, clarifies the playing field, sets resilience test
azizsaya 9y ago
Crack down in India as well. http://www.livemint.com/Money/ubKaynMm1JKkoJUa0voi3M/Income-tax-department-conducts-surveys-at-Bitcoin-exchanges.html http://www.livemint.com/Money/ubKaynMm1JKkoJUa0voi3M/Income-...
- naveen99 9y ago
  Thats not a crackdown, that's just tax collectors looking for easy money. They have plenty to gain from cryptocurrencies. It's like government banning cigarettes, not going to happen. They make too much money from it.
deleted 9y ago
[deleted]
thkim 9y ago
Bitcoin and cryptos ought to be banned for good. Cryptocurrencies are scam and outright bubble that will bring down the world economy. There is no currency without an authority to guarantee its value. Cryptos are pure bubble. If there is any good in this thing, it's ease of transaction, which is a question of underlying technology - it has nothing to do with lack of authority or decentralized scheme that cryptocurrencies tout as so important (and fail to deliver).
- noarchy 9y ago
  The good news for the rest of us is that it is very difficult to "ban" cryptocurrencies. That's a feature of them, of course. You can try to crack down on exchanges and methods for converting crypto to/from state-backed currencies, but that doesn't actually stop crypto.
  - thkim 9y ago
    you can make it illegal for a bank to do business with crypto exchanges like what SK is doing right now. If all G10 currency do this then it can kill the bubble in crypto. I actually think this is a better move for crypto's future.
    - noarchy 9y ago
      I suspect we'll see other states angling to see what kind of tax revenue they can squeeze out of crypto, rather than banning it. The problem, of course, is how to set up such a system. They can enforce it with the exchanges (witness the recent IRS request that Coinbase faced) and banks. It will be hard to cover all crypto transactions.
    - passwordreset 9y ago
      I see you haven't answered giblaz's questions yet. Valid answers to his questions would clear up much of the confusion about your arguments. Please answer his questions, and continue. How would G10 nations kill the crypto bubble by banning Bitcoin business by banks? Why is this a better move for crypto's future?
tboyd47 9y ago
Is it speculation or is it individuals trying to secure their wealth?
- runeks 9y ago
  Or is it both?
Kazamai 9y ago
Ban ban ban
rudiger 9y ago
At its core, the current cryptocurrency craze is simply an unprecedented wealth transfer to China from the rest of the world. Until the end of 2013, Bitcoin was predominantly traded for US dollars. However, after the crash of 2013, miners consolidated in China and Bitcoin mostly traded for Chinese yuan[1]. At the start of 2017, regulators in China cracked down on digital currency exchanges[2] and trading quickly moved to Japanese yen and, more recently, South Korean won[3]. All of the early buyers are selling. This won't end well. [1]: http://www.businessinsider.com/bitcoin-trading-china-yuan-remnibi-2017-1 http://www.businessinsider.com/bitcoin-trading-china-yuan-re... [2]: http://fortune.com/2017/01/05/bitcoin-plunge-china-currency/ http://fortune.com/2017/01/05/bitcoin-plunge-china-currency/ [3]: https://www.bloomberg.com/graphics/2017-bitcoin-volume/ https://www.bloomberg.com/graphics/2017-bitcoin-volume/
- pjc50 9y ago
  I thought a lot of it was capital flight - Chinese nationals moving yuan out of the country, but to USD assets under their control, rather than an actual influx of wealth to China. After all, we have no real idea of "where" the bitcoin is held, if that means anything at all.
- seanmcdirmid 9y ago
  I think you meant from china to the rest of the world. The opposite direction isn’t very difficult to achieve via FDI or a simple bank transfer.
  - nine_k 9y ago
    I'd suppose both flows exist. * Chinese energy producers and miners get cash into China from bitcoins they create and sell. * Chinese (early) buyers of bitcoin sell their coins in the West for cash stored in Western banks, or turned into other Western assets. I suppose the second stream is wider, but the first is not to be neglected, too.
    - seanmcdirmid 9y ago
      They don’t need bitcoin for the first stream, just for the second. Besides, there is plenty of excess capital floating around in china anyways, they don’t need many initial investment from the outside.
AElsinore77 9y ago
Is Bitcoin “legit?” Does it have any purpose or value? I think it does, and here are several lenses through which to see cryptocurrencies, that explain why: As an investment: The world is already comfortable with “hot potato” investments that derive their value from the fact someone else will buy it later (ie non-dividend, non-voting stock). As long as a critical mass of investors continues to see it as legitimate, it will be. As a way to avoid hyperinflation: Central banks can print money seemingly arbitrarily, diluting buying power. Cryptocurrencies present an alternative, where growth of money supply is constrained by known and predictable rules. What is inflation in the US, really? Is the stock market going up because real world wealth is increasing, or is it just printed money flooding into assets classes instead of “basket of goods” used to measure inflation? As an alternative currency not tied to any particular central bank: The value of a currency is ultimately derived from the real-world value controlled by the individuals who believe in and use that currency. Most currencies have their basis in communities defined by countries and borders — with cryptocurrency, you introduce a new community, where the value of it is ultimately derived from the real-world value controlled by all the individuals who are willing to conduct business in that cryptocurrency. As a check against authority in future with no cash: In a cashless future, there is great potential for abuse of power if all transactions must go through a central authority: 100% visibility and power to interfere with all private transactions of the population. Do you want to give someone power to see every little transaction you make, with power to stop it if they don’t like what you are doing? In this cashless future, trust-less peer to peer digital currency is essential. As a way to diversify away from assets based in your own country’s currency: cryptocurrencies offer a relatively accessible and easy way to diversify away from holding all your wealth in one currency. To hold a certain currency is to bet in that country relative to world. For America, there’s a bet on how the USD will track against other currencies in decades to come. Is china gonna unpeg the yuan further and further and make a gun for the number 1 spot? Has America invested in the infrastructure, education, large scale coordination, and energy capabilities to stay on top not just in terms of dollars on paper, but real world value that underlies real wealth? Crypto is just one way to place a bet based on a thesis around this. All this is based on the fundamental question: what is money? Money can essentially be seen as a “share” of the entirety of the worlds resources. These “shares” give you authority to allocate resources, such as food, materials, and other people. We all need a base level of “shares” to allocate the food and shelter we need to survive. Most big businesses use their “shares” to pursue one thing: getting more “shares”. And, your “share’s” constantly get diluted. No matter how many shares exist, in the end they only act as a distribution mechanism for the actual resources that exist. In this light, crypto is just as real as anything else; its just another made-up concept we use to coordinate society, just like traditional money. What worries me most about cryptocurrency right now, is the underlying cryptography, and how long that will last. Will there be fork to new method in time?
neuro_imager 9y ago
This thread reminds me that even on HN most comments on the internet are from people with very little understanding. I expected the "bubble", "tulip", "no value" arguments to come from the chicken littles on Forbes. If you think Bitcoin is overvalued, fine. Pour yourself a stiff drink and accept some people might lose some money. The sort of emotional hyperbole on here about "cryptocurrencies need to be banned by the loving, paternal, incorruptible government to save the world from ourselves" is not just getting old, its absurd. Having a censorship-resistant, globally-accepted asset would grant an unparalleled financial opportunity. Even if Bitcoin falls short in practice – it’s closer to the mark than any non-crypto asset. Being able to send money around the world with real-time market-based fees that are often lower than many alternatives is useful. Having a place to park value when banking is not available is also useful. The list goes on… Do you trust the government and the financial institutions that much that you're willing to hand them back the reigns of your financial future?
- fatjokes 9y ago
  > The sort of emotional hyperbole on here about "cryptocurrencies need to be banned by the loving, paternal, incorruptible government to save the world from ourselves" is not just getting old, its absurd. Why is it "getting old"? It's a fair concern that something so volatile should be examined critically and relentlessly. People don't just "get a stiff drink and accept they'll lose money" if it goes down---they jump out of windows. I'm hesitant to jump in cryptocurrency discussions because 1) I know too little about them, even at a technical level and 2) they're consistently filled with "emotional hyperbole" (that we agree on) from both ends. I think governments/regulators should have some say the same way you'd want them to regulate any financial instrument and punish Ponzi schemers and pump-and-dumpers. I'd like to think about the motives of both sides from being so passionate. For naysayers, I imagine it's a bit of sour grapes. For yaysayers, it's a bit more obvious---once the hype dies, they'll stop making money.
  - neuro_imager 9y ago
    > It's a fair concern that something so volatile should be examined critically and relentlessly. I agree - but backed with concerns based on legitimate understanding not "price is going up quickly, must be a scam". > I think governments/regulators should have some say the same way you'd want them to regulate any financial instrument and punish Ponzi schemers and pump-and-dumpers. Because they did such a great job in 2008? When are they planning to punish the architects of the financial crisis? Who's going after the banks when they launder money for mexican cartels and ISIS? You really think these people are trying to protect the public? > I'd like to think about the motives of both sides from being so passionate. I can't speak for anyone else but I come to these threads hoping to find sensible insight and technical analysis not "THIS IS A BUBBLE! BAN IT!" > For yaysayers, it's a bit more obvious---once the hype dies, they'll stop making money. There may well be a huge correction but the overall market is anti-fragile and here to stay. An article that sums up my thoughts: https://www.callmegwei.com/2017/11/24/crypto-price-isnt-an-end/ https://www.callmegwei.com/2017/11/24/crypto-price-isnt-an-e...
alecco 9y ago
If you are sure Bitcoin is going to crash get a short position in futures and become rich.

167 points by fourstar 9y ago

Updated: South Korea Clarifies Position After Reports of Possible Ban on All Crypto Transactions "On Monday, Financial Services Commission (FSC) Chairman Choi Jong-ku clarified to reporters at a luncheon meeting that “the FSC is mapping out measures to restrict [cryptocurrency] transactions to some extent,” which he did admit include “an all-out ban,” Yonhap reported. “The restriction is aimed at minimizing side effects of bitcoin transactions and reducing speculative investment,” the news outlet added. Choi was then quoted by Asia Economy: We are discussing to what extent the government will regulate the trade, including the prohibition of trade. The chairman noted that the Ministry of Justice is currently reviewing measures to regulate cryptocurrencies. News.Bitcoin.com reported last week on this ministry being put in charge of a new Virtual Currency Task Force in order to “set up and implement the regulatory measures through consultation between the related ministries.” And also "It is expected that the government measures related to virtual currency will not be a one-sided regulation that prohibits virtual currency trading altogether, but a regulation that limits investment amount and investment qualification." https://news.bitcoin.com/south-korea-reports-ban-all-crypto-transactions/ https://news.bitcoin.com/south-korea-reports-ban-all-crypto-...

seibelj 9y ago
Thank goodness it’s impossible to ban crypto! Everyone in SK withdraw from the exchanges before they seize it!
- lucozade 9y ago
  > Thank goodness it’s impossible to ban crypto! No it's not. It may be hard to prevent all SK citizens from using cryptocurrencies as SK is a reasonably open society, but it would be straightforward to ban their use.
  - noarchy 9y ago
    A ban won't stop crypto any more than it stops illegal drugs, prostitution, etc. That said, there would be an effect on the crypto markets if a handful of major nations took action. So the question I have would be: will they aim for the taxes (presumably allowing crypto trading), or for an outright ban?
    - kazagistar 9y ago
      Sure, but unlike drugs or prostitution, aggressive police action doesn't harm any underprivileged classes, but rather a bunch of affluent tax evaders.
      - mtgx 9y ago
        Do you think most people owning cryptocurrencies are affluent tax evaders?
        pjc50 9y ago
        Well, they are now the price has shot up. Although this does remind us that "affluent" and "liquid" are not the same thing and that capital gains tax usually requires realising gains to be a taxable event.
        QAPereo 9y ago
        The 1000 or so majority owners probably are.
        WJW 9y ago
        Yes? It's certainly not the people struggling to buy food if that's what you are implying.
        noarchy 9y ago
        They may be affluent, particularly when compared to people struggling to buy food. That doesn't make them tax evaders. Though it should be added that the tax situation regarding crypotcurrencies isn't clear in every country.
- pjc50 9y ago
  SK has quite a "policeable" internet; for a while they required use of real names, although that has ended. https://thenextweb.com/asia/2012/08/23/south-korea-scraps-law-requiring-use-real-names-online/ https://thenextweb.com/asia/2012/08/23/south-korea-scraps-la...
- yongjik 9y ago
  > Everyone in SK withdraw from the exchanges before they seize it! Pick 100 random Koreans who traded in any cryptocurrency in the past 30 days, and I guarantee that 95 of them will never figure out how to store their coins in their hard drive even if someone held a gun to their heads. You don't have to bust doors to seize cryptocoins. Just make its usage sufficiently "socially unacceptable", and people will find it's not worth the hassle. Sure, some determined people will keep using them, but they are not what the government is worried about. The government is worried about all those average Kims and Parks who threw their life savings into $(some coin nobody heard about), because when the inevitable hits these people and their families may lose jobs, career, and livelihood.
adsfasdf2332 9y ago
haha. A ban is not going to happen when their neighbor Japan has legitimized cryptocurrencies and they risk being left behind in a possible economic shift. Keep dreaming though!

verroq 9y ago

In addition to bitcoin’s swings of 20-30%, the premium with respect to USD also swings 10-20% in local South Korean exchanges. I really wonder what is going on in there sometimes. The premium is persistent and doesn’t seem to be arbed out. Is getting money in and out of South Korea so difficult that a 20% premium doesn’t yield an arbitrage opportunity?

worldburger 9y ago
Precisely. Tight currency flight controls (see Korean Anti-money laundering laws). $50,000/year is the limit per capita for personal use. BUT even then, you’d need a Korean bank account which is difficult for non-resident foreigners to get.
- unixhero 9y ago
  How about not using fiat currency whatsoever
- charlesdm 9y ago
  Do the same limitation apply to legal entities? Why not just set up a company?

KasianFranks 9y ago

Korea: Crypto is changing the world before our eyes, it's a black and white swan event combined. Better to adapt than stick your head in the sand.

eksemplar 9y ago
Crypto is changing the world. I've made money off of bitcoin, but I've done so responsibly, like I suspect must people on HN have, by only betting what I could easily afford to lose. By going mainstream that sort of reasonable/safe approach has ended, and people are now happily risking their entire savings. This will certainly be great for some people, but it also has the potential to be absolutely devastating. In America you may not care about that, but in my part of the world, this means that we're sitting on a real risk of society having to clean up after a bunch of people lose everything. The old world financial system is regulated to prevent regular people from losing everything on investments. I suspect that in time Crypto will be regulated similarly. This isn't very libertarian, I know, but I'm old enough to have seen a few bubbles burst and the result isn't pretty.
- indubitable 9y ago
  Can you elaborate on "society having to clean up after a bunch of people losing everything."? Perhaps I'm reading too much into your post, but so far as I can tell you're suggesting you reside in a nation with stronger social systems than the US. And a number of people failing, who otherwise would not have, could pose a strain on such systems. Yet this is confusing to me since presumably we're speaking of older individuals. Young individuals are, generally, still earning money and so they are already sustaining their own livelihood regardless of their savings (or [sudden] lack thereof). But back to the older individuals, would these individuals not already be receiving social benefits - healthcare, social security, etc? It seems that their personal dependence on these would increase - but their burden on society would not change, at least not particularly meaningfully. Like I said, probably reading way too much into your comment. Curious what you meant!
  - TeMPOraL 9y ago

smaili 9y ago

> Australia’s central bank governor Philip Lowe warned on Wednesday the fascination with the assets felt like a “speculative mania.” Just curious, what is it about speculation that has govs so worried? It’s quite clear at this point Bitcoin has grown far too large and most are now speculating on its value as a store so what benefit is there to step in, attempt to regulate it, and risk its undoing? To me, I’m reminded of Sean Parker’s Social Network quote about putting ads on TheFacebook, It’s like you’re throwing the greatest party on campus and someone’s saying it’s gotta be over at 11

JetSpiegel 9y ago
If non-professional investors start putting their life savings into Bitcoin and it crashes, the government can't just say "though break, you will starve on retirement"
- dmichulke 9y ago
  Why can't they? Surely they can indebt every person with accumulating govt deficits (currently 62k in the US) so what's different? https://ycharts.com/indicators/us_per_capita_public_debt https://ycharts.com/indicators/us_per_capita_public_debt
  - toomuchtodo 9y ago
    Because those people vote.
  - TeMPOraL 9y ago
    Because a) this debt at least pretends to pay for the comforts of their lives like infrastructure, security - and in some countries - education and healthcare; and b) national debt does not work the same way a private individual's debt works.
    - dmichulke 9y ago
      a)So taking on debt pretending to do something good is fine? What if I say they do something bad with that debt too, is it still OK? b) Interest rates are being paid for decades via taxes, money that could have been put to use much better. I'd say it's similar enough and don't think "it works differently" is an argument here

tzfld 9y ago

When this bubble will going to break, that will be a huge setback. This is definitely not a good thing for the future of cryptocurrencies.

josephagoss 9y ago

Edit: ok not 100% sure of the solution, but I think that there should be a way for the government to stop people putting their life savings into Bitcoin.

derefr 9y ago
It'd be annoying if restricting "investment" into cryptocurrency also restricted the ability to use a cryptocurrency as a medium of exchange. Sure, stop people from buying $10k of a coin and holding it. But hopefully don't restrict people from buying $5 of it to immediately send to someone. (Though I'm honestly not sure how you would be able to legally have one without the other.)
- deleted 9y ago
  [deleted]
__warlord__ 9y ago
This, in fact, goes against what Cryptocurrencies represent and what scares me the most is that people, in this case governments, are trying to regulate the new with the old. Remember, innovation always win.
- deleted 9y ago
  [deleted]
- charlesdm 9y ago
  None of the proposed laws are unreasonable though. Anyone who thinks no regulation is coming to this space is delusional. Regulation is good. KYC and AML policies are good. That means regulators are taking proactive steps to keep these currencies in the system, rather than banning them.
  - whataretensors 9y ago
    Good regulations are good. Bad regulation is untested code, written to benefit lobbyists. Like the accredited investor regulation which is essentially codified class warfare.

jfig 9y ago

i see this has positive, clarifies the playing field, sets resilience test

azizsaya 9y ago

Crack down in India as well. http://www.livemint.com/Money/ubKaynMm1JKkoJUa0voi3M/Income-tax-department-conducts-surveys-at-Bitcoin-exchanges.html http://www.livemint.com/Money/ubKaynMm1JKkoJUa0voi3M/Income-...

naveen99 9y ago
Thats not a crackdown, that's just tax collectors looking for easy money. They have plenty to gain from cryptocurrencies. It's like government banning cigarettes, not going to happen. They make too much money from it.

deleted 9y ago

[deleted]

thkim 9y ago

Bitcoin and cryptos ought to be banned for good. Cryptocurrencies are scam and outright bubble that will bring down the world economy. There is no currency without an authority to guarantee its value. Cryptos are pure bubble. If there is any good in this thing, it's ease of transaction, which is a question of underlying technology - it has nothing to do with lack of authority or decentralized scheme that cryptocurrencies tout as so important (and fail to deliver).

noarchy 9y ago
The good news for the rest of us is that it is very difficult to "ban" cryptocurrencies. That's a feature of them, of course. You can try to crack down on exchanges and methods for converting crypto to/from state-backed currencies, but that doesn't actually stop crypto.
- thkim 9y ago
  you can make it illegal for a bank to do business with crypto exchanges like what SK is doing right now. If all G10 currency do this then it can kill the bubble in crypto. I actually think this is a better move for crypto's future.
  - noarchy 9y ago
    I suspect we'll see other states angling to see what kind of tax revenue they can squeeze out of crypto, rather than banning it. The problem, of course, is how to set up such a system. They can enforce it with the exchanges (witness the recent IRS request that Coinbase faced) and banks. It will be hard to cover all crypto transactions.
  - passwordreset 9y ago
    I see you haven't answered giblaz's questions yet. Valid answers to his questions would clear up much of the confusion about your arguments. Please answer his questions, and continue. How would G10 nations kill the crypto bubble by banning Bitcoin business by banks? Why is this a better move for crypto's future?

tboyd47 9y ago

Is it speculation or is it individuals trying to secure their wealth?

runeks 9y ago
Or is it both?

Kazamai 9y ago

Ban ban ban

rudiger 9y ago

At its core, the current cryptocurrency craze is simply an unprecedented wealth transfer to China from the rest of the world. Until the end of 2013, Bitcoin was predominantly traded for US dollars. However, after the crash of 2013, miners consolidated in China and Bitcoin mostly traded for Chinese yuan[1]. At the start of 2017, regulators in China cracked down on digital currency exchanges[2] and trading quickly moved to Japanese yen and, more recently, South Korean won[3]. All of the early buyers are selling. This won't end well. [1]: http://www.businessinsider.com/bitcoin-trading-china-yuan-remnibi-2017-1 http://www.businessinsider.com/bitcoin-trading-china-yuan-re... [2]: http://fortune.com/2017/01/05/bitcoin-plunge-china-currency/ http://fortune.com/2017/01/05/bitcoin-plunge-china-currency/ [3]: https://www.bloomberg.com/graphics/2017-bitcoin-volume/ https://www.bloomberg.com/graphics/2017-bitcoin-volume/

pjc50 9y ago
I thought a lot of it was capital flight - Chinese nationals moving yuan out of the country, but to USD assets under their control, rather than an actual influx of wealth to China. After all, we have no real idea of "where" the bitcoin is held, if that means anything at all.
seanmcdirmid 9y ago
I think you meant from china to the rest of the world. The opposite direction isn’t very difficult to achieve via FDI or a simple bank transfer.
- nine_k 9y ago
  I'd suppose both flows exist. * Chinese energy producers and miners get cash into China from bitcoins they create and sell. * Chinese (early) buyers of bitcoin sell their coins in the West for cash stored in Western banks, or turned into other Western assets. I suppose the second stream is wider, but the first is not to be neglected, too.
  - seanmcdirmid 9y ago
    They don’t need bitcoin for the first stream, just for the second. Besides, there is plenty of excess capital floating around in china anyways, they don’t need many initial investment from the outside.

AElsinore77 9y ago

Is Bitcoin “legit?” Does it have any purpose or value? I think it does, and here are several lenses through which to see cryptocurrencies, that explain why: As an investment: The world is already comfortable with “hot potato” investments that derive their value from the fact someone else will buy it later (ie non-dividend, non-voting stock). As long as a critical mass of investors continues to see it as legitimate, it will be. As a way to avoid hyperinflation: Central banks can print money seemingly arbitrarily, diluting buying power. Cryptocurrencies present an alternative, where growth of money supply is constrained by known and predictable rules. What is inflation in the US, really? Is the stock market going up because real world wealth is increasing, or is it just printed money flooding into assets classes instead of “basket of goods” used to measure inflation? As an alternative currency not tied to any particular central bank: The value of a currency is ultimately derived from the real-world value controlled by the individuals who believe in and use that currency. Most currencies have their basis in communities defined by countries and borders — with cryptocurrency, you introduce a new community, where the value of it is ultimately derived from the real-world value controlled by all the individuals who are willing to conduct business in that cryptocurrency. As a check against authority in future with no cash: In a cashless future, there is great potential for abuse of power if all transactions must go through a central authority: 100% visibility and power to interfere with all private transactions of the population. Do you want to give someone power to see every little transaction you make, with power to stop it if they don’t like what you are doing? In this cashless future, trust-less peer to peer digital currency is essential. As a way to diversify away from assets based in your own country’s currency: cryptocurrencies offer a relatively accessible and easy way to diversify away from holding all your wealth in one currency. To hold a certain currency is to bet in that country relative to world. For America, there’s a bet on how the USD will track against other currencies in decades to come. Is china gonna unpeg the yuan further and further and make a gun for the number 1 spot? Has America invested in the infrastructure, education, large scale coordination, and energy capabilities to stay on top not just in terms of dollars on paper, but real world value that underlies real wealth? Crypto is just one way to place a bet based on a thesis around this. All this is based on the fundamental question: what is money? Money can essentially be seen as a “share” of the entirety of the worlds resources. These “shares” give you authority to allocate resources, such as food, materials, and other people. We all need a base level of “shares” to allocate the food and shelter we need to survive. Most big businesses use their “shares” to pursue one thing: getting more “shares”. And, your “share’s” constantly get diluted. No matter how many shares exist, in the end they only act as a distribution mechanism for the actual resources that exist. In this light, crypto is just as real as anything else; its just another made-up concept we use to coordinate society, just like traditional money. What worries me most about cryptocurrency right now, is the underlying cryptography, and how long that will last. Will there be fork to new method in time?

neuro_imager 9y ago

This thread reminds me that even on HN most comments on the internet are from people with very little understanding. I expected the "bubble", "tulip", "no value" arguments to come from the chicken littles on Forbes. If you think Bitcoin is overvalued, fine. Pour yourself a stiff drink and accept some people might lose some money. The sort of emotional hyperbole on here about "cryptocurrencies need to be banned by the loving, paternal, incorruptible government to save the world from ourselves" is not just getting old, its absurd. Having a censorship-resistant, globally-accepted asset would grant an unparalleled financial opportunity. Even if Bitcoin falls short in practice – it’s closer to the mark than any non-crypto asset. Being able to send money around the world with real-time market-based fees that are often lower than many alternatives is useful. Having a place to park value when banking is not available is also useful. The list goes on… Do you trust the government and the financial institutions that much that you're willing to hand them back the reigns of your financial future?

fatjokes 9y ago
> The sort of emotional hyperbole on here about "cryptocurrencies need to be banned by the loving, paternal, incorruptible government to save the world from ourselves" is not just getting old, its absurd. Why is it "getting old"? It's a fair concern that something so volatile should be examined critically and relentlessly. People don't just "get a stiff drink and accept they'll lose money" if it goes down---they jump out of windows. I'm hesitant to jump in cryptocurrency discussions because 1) I know too little about them, even at a technical level and 2) they're consistently filled with "emotional hyperbole" (that we agree on) from both ends. I think governments/regulators should have some say the same way you'd want them to regulate any financial instrument and punish Ponzi schemers and pump-and-dumpers. I'd like to think about the motives of both sides from being so passionate. For naysayers, I imagine it's a bit of sour grapes. For yaysayers, it's a bit more obvious---once the hype dies, they'll stop making money.
- neuro_imager 9y ago
  > It's a fair concern that something so volatile should be examined critically and relentlessly. I agree - but backed with concerns based on legitimate understanding not "price is going up quickly, must be a scam". > I think governments/regulators should have some say the same way you'd want them to regulate any financial instrument and punish Ponzi schemers and pump-and-dumpers. Because they did such a great job in 2008? When are they planning to punish the architects of the financial crisis? Who's going after the banks when they launder money for mexican cartels and ISIS? You really think these people are trying to protect the public? > I'd like to think about the motives of both sides from being so passionate. I can't speak for anyone else but I come to these threads hoping to find sensible insight and technical analysis not "THIS IS A BUBBLE! BAN IT!" > For yaysayers, it's a bit more obvious---once the hype dies, they'll stop making money. There may well be a huge correction but the overall market is anti-fragile and here to stay. An article that sums up my thoughts: https://www.callmegwei.com/2017/11/24/crypto-price-isnt-an-end/ https://www.callmegwei.com/2017/11/24/crypto-price-isnt-an-e...

alecco 9y ago

If you are sure Bitcoin is going to crash get a short position in futures and become rich.