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That's not an issue at all, for large transactions. The real issue is each payment being a taxable event, due to IRS treating it as property, rather than curren

by cft 7y ago

That's not an issue at all, for large transactions. The real issue is each payment being a taxable event, due to IRS treating it as property, rather than currency. You literally have to report each payment on schedule D and calculate its cost basis! This burden kills any legal US adoption.

marcus_holmes 7y ago
I thought the Bitcoin community were publicly stating that Bitcoin is optimised as a "Store of value" rather than a currency to be used for transactions? Which is it?
- blotter_paper 7y ago
  It's properties are more in line with a store of value, especially the deflationary aspect, but the line between a store of value and a currency is blurry. Gold also has more properties of a store of value than a currency, and it's used more as a store of value globally, yet some parts of North Africa and the Middle East are using the gold dinar as a currency. It can be both.
  - marcus_holmes 7y ago
    not in a modern tax regime, not really. If it's a store of value, like say bonds, then it's property. You have to report gold transactions, too, after all.
    - blotter_paper 7y ago
      If you wanted to know how it's taxed, you could've asked that directly. I didn't see anything in your question about how it was taxed. Short answer specific to the US (IANAL): capital gains on every transaction, counting transactions between different cryptocurrencies as if you'd sold your original currency for USD and then bought the other cryptocurrency using USD. These are just arbitrary laws though, they have nothing to do with the actual properties of a given cryptocurrency.
      - marcus_holmes 7y ago
        the comment I was replying to was specifically about tax (https://news.ycombinator.com/item?id=21443141 https://news.ycombinator.com/item?id=21443141)
- alwillis 7y ago
  According to the Austrian School of economics, a thing has to be valuable or seen as a store of value before it can be used as a medium of exchange. This podcast has a great explanation of this: https://stephanlivera.com/episode/76/ https://stephanlivera.com/episode/76/. Why would you spend bitcoin if you didn't have to if you believed it’s going to be a lot more valuable 5 or 10 years from now? Famously, a guy spent 10,000 BTC to buy two pizzas during the early days; that’s over $94 million USD at today's prices.

by cft 7y ago

marcus_holmes 7y ago

I thought the Bitcoin community were publicly stating that Bitcoin is optimised as a "Store of value" rather than a currency to be used for transactions? Which is it?

blotter_paper 7y ago
It's properties are more in line with a store of value, especially the deflationary aspect, but the line between a store of value and a currency is blurry. Gold also has more properties of a store of value than a currency, and it's used more as a store of value globally, yet some parts of North Africa and the Middle East are using the gold dinar as a currency. It can be both.
- marcus_holmes 7y ago
  not in a modern tax regime, not really. If it's a store of value, like say bonds, then it's property. You have to report gold transactions, too, after all.
  - blotter_paper 7y ago
    If you wanted to know how it's taxed, you could've asked that directly. I didn't see anything in your question about how it was taxed. Short answer specific to the US (IANAL): capital gains on every transaction, counting transactions between different cryptocurrencies as if you'd sold your original currency for USD and then bought the other cryptocurrency using USD. These are just arbitrary laws though, they have nothing to do with the actual properties of a given cryptocurrency.
    - marcus_holmes 7y ago
      the comment I was replying to was specifically about tax (https://news.ycombinator.com/item?id=21443141 https://news.ycombinator.com/item?id=21443141)
alwillis 7y ago
According to the Austrian School of economics, a thing has to be valuable or seen as a store of value before it can be used as a medium of exchange. This podcast has a great explanation of this: https://stephanlivera.com/episode/76/ https://stephanlivera.com/episode/76/. Why would you spend bitcoin if you didn't have to if you believed it’s going to be a lot more valuable 5 or 10 years from now? Famously, a guy spent 10,000 BTC to buy two pizzas during the early days; that’s over $94 million USD at today's prices.