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> No VAT on bitcoin transactions Sounds like a defect in the technology to me. A good currency should be able to support the full range of social policies (li

by xapata 6y ago

> No VAT on bitcoin transactions Sounds like a defect in the technology to me. A good currency should be able to support the full range of social policies (like VAT). One of the problems of the Euro is not being able to inflate different countries within the Eurozone at different rates. If Bitcoin were ever to become popular for regular transactions within many countries, it'd be a fiscal policy disaster. Pretty soon you'd hear Portugal, Italy, Spain, and Greece banning its use, along with similarly wobbly countries in other parts of the world. I remember Malaysia catching flak for halting foreign currency exchange during the Asian Financial Crisis, but it turned out to be a really smart move. It turns out that a globally integrated economy isn't always best for the smaller economies. They need to be able to adjust the spigot. Edit: I suppose this suggests a feature request for Bitcoin: namespacing, of a sort. If the currency were able to support cross-namespace conversion controls, like a tax determined by a function of the velocity and acceleration of exchange ... that'd be pretty darn cool. Each country could pick its namespace, and have control over its exchange tax function. Taking it further, you could tax intra-namespace transactions. VAT with no bureaucracy. Each account could be tied to a citizen, transactions taxed at some progressive schedule, and then uniformly distributed to every account daily. The transaction tax could be dynamic, to encourage currency flow in bad times, and to add some friction when things are overheating.

sunshinerag 6y ago
You are confused. There is nothing in Bitcoin that prevents VAT. It's just Germany's policy. Elsewhere they charge VAT on it like any other currency. I have paid VAT on all my bitcoin transactions like any other currency. I am not in Germany.
- deleted 6y ago
  [deleted]
- xapata 6y ago
  That's good to hear. What about exchange controls? How do you see governments adjusting inflation with widespread international Bitcoin usage?
  - jt2190 6y ago
    My understanding is that the inability to control inflation is a “feature” of BTC, not a “bug”. I strongly suspect that this will eventually make BTC too rare for owners to trade very often, and not practical as a day-to-day currency.
    - dsterry 6y ago
      There's no theoretical limit to it's divisibility. The total supply is known ahead of time but the world will never run out of Bitcoin to transact.
      - xapata 6y ago
        The comment describes a liquidity crisis, when the market clams up and price begins to fluctuate wildly. It's not that things aren't tradeable, but that very few people want to.
      - TheReveller 6y ago
        All currencies are infinitely dividable I've never understood this supposed advantage of Bitcoin.
        ric2b 6y ago
        How do I pay 0.005 USD to my friend?
        jt2190 6y ago
        If useful, the US Department of the Treasury can issue a coin or bill with a value of any denomination, including .005 USD, and so is “infinitely divisible”. Bitcoin divisibility is limited, by design, to 0.00000001 BTC (1 Satoshi) Whether this is “enough” is very difficult to answer definitively. If the demand for BTC is greater than the supply, the value of BTC will rise until supply and demand reach equilibrium. If the demand outpaces supply, holders (“HODLERS”) have less incentive to trade and more incentive to keep their BTC, because the value of their BTC increases. If demand gets too great, few to no holders trade, because they get more value by doing nothing, and trades involving BTC slow or stop completely. (We can think of this as kind of a “consensus attack” by “store of value” advocates on the “medium of exchange” advocates.) The demand doesn’t go away, though, so supply and demand can’t reach equilibrium. Eventually this would lead people to start using something else as a medium of exchange, perhaps just bartering at first, eventually settling on something common. So now we have a problem: BTC demand has been satisfied by another “medium of exchange”. But what happens to the “store of value” part of BTC if it is no longer the “medium of exchange”? Do coins become like works of art, traded infrequently for great sums? Or do they become worthless?
DeafSquid 6y ago
Your post disgusts me
- xapata 6y ago
  > Your post disgusts me I'm happy to hear reasons to change my mind. What's disgusting?
  - cyphertruck 6y ago
    I can’t see the flagged post, so don’t attack me here, I’m just going to explain the bitcoiner view. Your presumption that inflation is good and that bitcoin needs to be able to support whatever “social policies” governments decide is antithetical to the purpose of bitcoin. Bitcoin was created to escape currency debasement because it is how the people are impoverished. Currency debasement is the engine that creates wealth inequality. The Catillion effect means that people who get the newly printed money (eg wall street) benefit from it, while the regular people only pay the cost via reduced purchasing power. Bitcoin is really a savings technology that allows people to escape debased currencies, like the zimbabwe dollar or the Venezuelan peso. It also has censorship features and other useful properties, but this is the aspect most at odds with the assumptions in your post that the other user apparently disliked.
    - xapata 6y ago
      > currency debasement ... is how the people are impoverished I agree that's the heart of the Bitcoin thesis, but I am convinced the evidence does not support that claim. In fact, quite the opposite. Much of the original Bitcoin discussion had its roots in von Mises' theories and beliefs, one of which was the rejection of empiricism. It's tough to fruitfully discuss a topic when the conversants disagree over epistemology. We can try nonetheless. > Currency debasement ... creates wealth inequality. I see it the other way. The government can print money and distribute it uniformly, such as with this year's CARES act (which is about as uniform as one can ask for in this political climate). Regardless of government policy for how it distributes newly created currency, inflation is fundamentally beneficial for debtors and bad for creditors. Are "the people" predominantly creditors or debtors?
Siira 6y ago
> A good currency should be able to support the full range of social policies This is not true. An infrastructure that does not even support oppressive policies can be (and often is) better. It’s similar to how it’s better that you can’t plug the USB wrongly.

by xapata 6y ago

sunshinerag 6y ago

You are confused. There is nothing in Bitcoin that prevents VAT. It's just Germany's policy. Elsewhere they charge VAT on it like any other currency. I have paid VAT on all my bitcoin transactions like any other currency. I am not in Germany.

deleted 6y ago
[deleted]
xapata 6y ago
That's good to hear. What about exchange controls? How do you see governments adjusting inflation with widespread international Bitcoin usage?
- jt2190 6y ago
  My understanding is that the inability to control inflation is a “feature” of BTC, not a “bug”. I strongly suspect that this will eventually make BTC too rare for owners to trade very often, and not practical as a day-to-day currency.
  - dsterry 6y ago
    There's no theoretical limit to it's divisibility. The total supply is known ahead of time but the world will never run out of Bitcoin to transact.
    - xapata 6y ago
      The comment describes a liquidity crisis, when the market clams up and price begins to fluctuate wildly. It's not that things aren't tradeable, but that very few people want to.
    - TheReveller 6y ago
      All currencies are infinitely dividable I've never understood this supposed advantage of Bitcoin.
      - ric2b 6y ago
        How do I pay 0.005 USD to my friend?
        jt2190 6y ago
        If useful, the US Department of the Treasury can issue a coin or bill with a value of any denomination, including .005 USD, and so is “infinitely divisible”. Bitcoin divisibility is limited, by design, to 0.00000001 BTC (1 Satoshi) Whether this is “enough” is very difficult to answer definitively. If the demand for BTC is greater than the supply, the value of BTC will rise until supply and demand reach equilibrium. If the demand outpaces supply, holders (“HODLERS”) have less incentive to trade and more incentive to keep their BTC, because the value of their BTC increases. If demand gets too great, few to no holders trade, because they get more value by doing nothing, and trades involving BTC slow or stop completely. (We can think of this as kind of a “consensus attack” by “store of value” advocates on the “medium of exchange” advocates.) The demand doesn’t go away, though, so supply and demand can’t reach equilibrium. Eventually this would lead people to start using something else as a medium of exchange, perhaps just bartering at first, eventually settling on something common. So now we have a problem: BTC demand has been satisfied by another “medium of exchange”. But what happens to the “store of value” part of BTC if it is no longer the “medium of exchange”? Do coins become like works of art, traded infrequently for great sums? Or do they become worthless?

DeafSquid 6y ago

Your post disgusts me

xapata 6y ago
> Your post disgusts me I'm happy to hear reasons to change my mind. What's disgusting?
- cyphertruck 6y ago
  I can’t see the flagged post, so don’t attack me here, I’m just going to explain the bitcoiner view. Your presumption that inflation is good and that bitcoin needs to be able to support whatever “social policies” governments decide is antithetical to the purpose of bitcoin. Bitcoin was created to escape currency debasement because it is how the people are impoverished. Currency debasement is the engine that creates wealth inequality. The Catillion effect means that people who get the newly printed money (eg wall street) benefit from it, while the regular people only pay the cost via reduced purchasing power. Bitcoin is really a savings technology that allows people to escape debased currencies, like the zimbabwe dollar or the Venezuelan peso. It also has censorship features and other useful properties, but this is the aspect most at odds with the assumptions in your post that the other user apparently disliked.
  - xapata 6y ago
    > currency debasement ... is how the people are impoverished I agree that's the heart of the Bitcoin thesis, but I am convinced the evidence does not support that claim. In fact, quite the opposite. Much of the original Bitcoin discussion had its roots in von Mises' theories and beliefs, one of which was the rejection of empiricism. It's tough to fruitfully discuss a topic when the conversants disagree over epistemology. We can try nonetheless. > Currency debasement ... creates wealth inequality. I see it the other way. The government can print money and distribute it uniformly, such as with this year's CARES act (which is about as uniform as one can ask for in this political climate). Regardless of government policy for how it distributes newly created currency, inflation is fundamentally beneficial for debtors and bad for creditors. Are "the people" predominantly creditors or debtors?

Siira 6y ago

> A good currency should be able to support the full range of social policies This is not true. An infrastructure that does not even support oppressive policies can be (and often is) better. It’s similar to how it’s better that you can’t plug the USB wrongly.