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> Very few people want bitcoin for itself, most are in it purely to get rich through speculation, and even those who use it to transact will find it less attrac

> Very few people want bitcoin for itself, most are in it purely to get rich through speculation, and even those who use it to transact will find it less attractive if it can't easily be converted. From an outside perspective, it might seem that way. There is a plentiful, and growing crowd who understand Bitcoin as a means of saving and avoiding state interference in their finances. Conversion of fiat to Bitcoin is highly desirable because people want to save over long periods. The conversion of Bitcoin back to Fiat is less desirable because it is trading good money for bad money. People only do the latter when they have a liquidity crisis. The bulk of bitcoin users are HODLers, as can be seen through the UTXO ages on the blockchain. Market speculators are a minor subset of bitcoiners. > Your Heath-Robinson process of money laundering there is hilarious, and reads like a how-to for lengthy jail terms. I wasn't talking about money laundering at all. What are you reading? Not sure you know what money laundering means. I'm referring to people taking their legitimate earnings and storing them in Bitcoin for the purpose of avoiding devaulation by inflation and illegal surveillance without warrant. People pay their income taxes when they earn (Usually with no choice because it will be deducted fromn their wage via a PAYE scheme). They also pay their sales taxes when the purchase any items from outside of the black markets. The Bitcoin saver who merely interacts with this black market as a means of exchanging fiat money for bitcoin is not engaging in illegal activity. It is the black market vendors who provide the services who are. Consider this: You go to a shop and purchase an item which costs $0.99 (inc. sales tax). The owner of that shop decides to pocket the sales tax and does not pass it on to the tax authority. Have you engaged in illegal activity by purchasing this item? It has nothing to do with you whether the shop owner pays his sales tax - you paid yours. Ok, it might be possible to dodge sales taxes by purchasing within black markets, but the black market doesn't necessarily provide all the commodities one would want. The most common use case will be converting back to fiat cash to use at local stores, where every purchase has a sales tax. If money laundering is a concern, then a government would really want to deregulate bitcoin and encourage its use in paying taxes. By utilizing the blockchain and its auditability, they could largely automate the process of tax collection and save significant amounts of money. People will still be paying their income taxes via PAYE, but the process can be fully automated by every participant involved (employer, employee and tax authority). By attempting to overregulate, they push most of the activity underground, where they are no longer collecting sales taxes on the transactions.

Nursie 6y ago
> I wasn't talking about money laundering at all. All that stuff about clean coins, joins and mixers. Money laundering. > The bulk of bitcoin users are HODLers Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that.
- sparkie 6y ago
  > All that stuff about clean coins, joins and mixers. Money laundering. The use of a CoinJoin does not imply money laundering. Launderers can and do use these tools. Merely using the tool does not make you a launderer. If you are suspected of laundering, you can prove your money movements to a law enforcement body which offers a warrant to search them. This is how things should be. Innocent until proven guilty. CoinJoins are necessary to evade warrantless surveillance, because transactions on the blockchain can be linked to your person when the state obtains parts of that information from KYC exchanges. Since you have a right to secure against unreasonable searches, you have a right to thwart these efforts to illegally monitor your financial activity. > Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that. They expect the price to go up because they understand the subjective value of commodities, Gresham's law, and human self-interest. It has nothing to do with regulation. Bitcoin will grow with or without state involvement because it solves real problems that governments and others have created. More people are becoming aware of this, and Bitcoin has propelled some of the issues into the spotlight. The role of the state could slow down or accelerate Bitcoin adoption, but it cannot stop the inevitable - particularly when their own policy of infinite inflation is the major driver of Bitcoin adoption. As said above, a government would be unwise to attempt to push the activity underground, where they can no longer monitor and collect taxes on it. If the regulatory burden on exchanges ends up making it more difficult for me to obtain bitcoin through a KYC exchange than via the black market, then I will end up doing the latter, and by doing the latter, I might then potentially increase my interaction with the black market (reduced sales tax), hide my earnings (less income tax), hide my profits (less capital gains tax), hide my wealth (bye bye inheritance tax). Isn't going well for the government, who will see a reduced tax income. The government just wants people to pay taxes. It shouldn't really care much about whether people are using dollars or bitcoin - only that Bitcoin can potentially make it easier for people to dodge tax. The best option for a government is to make it easier to use bitcoin for legitimate services than the black market so as to discourage black market involvement. A government should be working on ways for it to utilize Bitcoin for the purpose of tax collection, and then encourage its widespread use in retail and in PAYE, such that it can have an almost live view of the economy and can see who is paying their taxes. Any delays in mobilizing such systems will ensure that superior, more privacy preserving systems will instead be adopted, and will give limited benefits to the government.

Nursie 6y ago

> I wasn't talking about money laundering at all. All that stuff about clean coins, joins and mixers. Money laundering. > The bulk of bitcoin users are HODLers Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that.

sparkie 6y ago
> All that stuff about clean coins, joins and mixers. Money laundering. The use of a CoinJoin does not imply money laundering. Launderers can and do use these tools. Merely using the tool does not make you a launderer. If you are suspected of laundering, you can prove your money movements to a law enforcement body which offers a warrant to search them. This is how things should be. Innocent until proven guilty. CoinJoins are necessary to evade warrantless surveillance, because transactions on the blockchain can be linked to your person when the state obtains parts of that information from KYC exchanges. Since you have a right to secure against unreasonable searches, you have a right to thwart these efforts to illegally monitor your financial activity. > Who are doing so because they expect the price in fiat to go up, so regulating on/off ramps would likely kill that. They expect the price to go up because they understand the subjective value of commodities, Gresham's law, and human self-interest. It has nothing to do with regulation. Bitcoin will grow with or without state involvement because it solves real problems that governments and others have created. More people are becoming aware of this, and Bitcoin has propelled some of the issues into the spotlight. The role of the state could slow down or accelerate Bitcoin adoption, but it cannot stop the inevitable - particularly when their own policy of infinite inflation is the major driver of Bitcoin adoption. As said above, a government would be unwise to attempt to push the activity underground, where they can no longer monitor and collect taxes on it. If the regulatory burden on exchanges ends up making it more difficult for me to obtain bitcoin through a KYC exchange than via the black market, then I will end up doing the latter, and by doing the latter, I might then potentially increase my interaction with the black market (reduced sales tax), hide my earnings (less income tax), hide my profits (less capital gains tax), hide my wealth (bye bye inheritance tax). Isn't going well for the government, who will see a reduced tax income. The government just wants people to pay taxes. It shouldn't really care much about whether people are using dollars or bitcoin - only that Bitcoin can potentially make it easier for people to dodge tax. The best option for a government is to make it easier to use bitcoin for legitimate services than the black market so as to discourage black market involvement. A government should be working on ways for it to utilize Bitcoin for the purpose of tax collection, and then encourage its widespread use in retail and in PAYE, such that it can have an almost live view of the economy and can see who is paying their taxes. Any delays in mobilizing such systems will ensure that superior, more privacy preserving systems will instead be adopted, and will give limited benefits to the government.