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Also, many cryptos' primary use case is a replacement for fiat that isn't centrally controlled. Saying that you shouldn't pay taxes on crypto to crypto is simi

by kmkemp 9y ago

Also, many cryptos' primary use case is a replacement for fiat that isn't centrally controlled. Saying that you shouldn't pay taxes on crypto to crypto is similar to saying that you shouldn't pay taxes at all.

Cyberdog 9y ago
Tax avoidance is one of the benefits of using cryptocurrency as a currency. Yeah, I'll say it. But what is bitcoin except a database plus some math equations? By "owning" bitcoin, you have a cryptographic key which lets you do certain operations on the database. At what point does this all get abstracted far enough from real money that it becomes ludicrous to tax it? Obviously, the US government and most cryptocurrency users have widely differing opinions on that.
- tehlike 9y ago
  Most cryptocurrency users are chasing their own moon. I agree that it's not practical to do book keeping if you want to buy real world goods with crypto (you cannot keep calculating capital gains everytime you buy a coffee with it), but that's not the common use today _anyway_. This is also the exact reason why it's taxed the way its taxed. There's no way government is gonna let you build wealth without paying taxes. Private key is surely a database password that lets you do certain operations, but that exact feature make it an asset. As long as you can buy "things" that has value with it, it's a capital you need to pay taxes on. It's hard, but it's what it is.
  - Cyberdog 9y ago
    I personally think cryptocurrency is more interesting as a currency than as an investment. I want "Satoshi's vision" to catch on. But you're right, the reality is that many are using it as an investment instead, so now, I suppose, it's being regulated like one. Unfortunately, at the same time that we solve some of the problems making usage as a currency impractical (even if one of those solutions is just Bitcoin Core becoming an outdated relic), regulations treating it as an investment will hamper its adoption. Oh well. I have faith the tech will win in the end.
    - tehlike 9y ago
      I am all for parts of satoshis vision. I wish it was somehow universally accepted, so i could give my dollars and get them burned (legally, somehow), and can keep transacting with my digital coin.
- tehlike 9y ago
  With the same logic, my stocks in my brokerage is an entry in the database where i hold the password. I don't ever recall owning a paper stock, for example. If i keep it in the brokerage, without withdrawing the cash, why do i pay taxes? That sounds stupid right? Then the next thing you know, people sell each other stocks in exchange for goods. "Plumbing service stock" on a broker, if you buy it, you get legal right to have plumbing service at your house free of charge. This way you can keep everything in brokerages. Of course there are flaws with the argument, but saying "crypto to crypto isn't taxable" ignores the fact that USD taxation happens based on USD. PS: while i said usd, i mistakenly wrote USDT, which was very ironic haha.

by kmkemp 9y ago

Cyberdog 9y ago

Tax avoidance is one of the benefits of using cryptocurrency as a currency. Yeah, I'll say it. But what is bitcoin except a database plus some math equations? By "owning" bitcoin, you have a cryptographic key which lets you do certain operations on the database. At what point does this all get abstracted far enough from real money that it becomes ludicrous to tax it? Obviously, the US government and most cryptocurrency users have widely differing opinions on that.

tehlike 9y ago
Most cryptocurrency users are chasing their own moon. I agree that it's not practical to do book keeping if you want to buy real world goods with crypto (you cannot keep calculating capital gains everytime you buy a coffee with it), but that's not the common use today _anyway_. This is also the exact reason why it's taxed the way its taxed. There's no way government is gonna let you build wealth without paying taxes. Private key is surely a database password that lets you do certain operations, but that exact feature make it an asset. As long as you can buy "things" that has value with it, it's a capital you need to pay taxes on. It's hard, but it's what it is.
- Cyberdog 9y ago
  I personally think cryptocurrency is more interesting as a currency than as an investment. I want "Satoshi's vision" to catch on. But you're right, the reality is that many are using it as an investment instead, so now, I suppose, it's being regulated like one. Unfortunately, at the same time that we solve some of the problems making usage as a currency impractical (even if one of those solutions is just Bitcoin Core becoming an outdated relic), regulations treating it as an investment will hamper its adoption. Oh well. I have faith the tech will win in the end.
  - tehlike 9y ago
    I am all for parts of satoshis vision. I wish it was somehow universally accepted, so i could give my dollars and get them burned (legally, somehow), and can keep transacting with my digital coin.
tehlike 9y ago
With the same logic, my stocks in my brokerage is an entry in the database where i hold the password. I don't ever recall owning a paper stock, for example. If i keep it in the brokerage, without withdrawing the cash, why do i pay taxes? That sounds stupid right? Then the next thing you know, people sell each other stocks in exchange for goods. "Plumbing service stock" on a broker, if you buy it, you get legal right to have plumbing service at your house free of charge. This way you can keep everything in brokerages. Of course there are flaws with the argument, but saying "crypto to crypto isn't taxable" ignores the fact that USD taxation happens based on USD. PS: while i said usd, i mistakenly wrote USDT, which was very ironic haha.