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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 pai

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?
        ric2b 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”. And how much does that cost? I bet it's more than 5 cents. > Bitcoin divisibility is limited, by design, to 0.00000001 BTC (1 Satoshi) Not by design, that's an implementation details that can easily be changed in the future if 1 sat starts to become valuable enough to make a difference. > and trades involving BTC slow or stop completely. Do you have an example of a single commodity in the history of humanity that simply stopped being traded because it became "too valuable"? I can't even understand how that makes sense, if it's valuable some people will want to sell it and get something that is more useful to them, like a house, a car, whatever. People don't commonly decide to hold an asset until their death bed. > But what happens to the “store of value” part of BTC if it is no longer the “medium of exchange”? What happened to Gold?
- stale2002 6y ago
  Government can do whatever inflation adjustments that it wants. What it can't do, though, is force people to accept them. If you want your money to inflate, you are free to use any infatuation currency that you want. But other people, who prefer to not be subject to inflation, are now free to not be subject to it.
  - xapata 6y ago
    Can't the government force taxes to be paid in the currency of its choice, thereby making taxpayers (residents, visitors, and their counter-parties) subject to its currency?
    - stale2002 6y ago
      > thereby making taxpayers (residents, visitors, and their counter-parties) subject to its currency? It does not make them subject to inflation, no. If you hold entirely cryptocurrency, you are not subject to the inflation of holding the currency. Instead, you can simply convert to that currency, only when you need to pay taxes. This avoids the inflation, in the same way that hold stock in a company, and not holding any dollars, avoids you from being subject to inflation.
      - xapata 6y ago
        Suppose you had a particular debt, denominated in currency A, owed at the end of the year. Would you want to hold some amount of currency A throughout the year to ensure you could pay that debt? I suppose you could argue that you'd buy some currency swaps or somesuch, but most people would just hold that currency. Remember the Asian Financial Crisis, when a bunch of the "tigers" had loans denominated in USD, Francs, etc., and then there was a big capital outflow, tanking their local currencies against those debts? People will want to make sure they don't float against the currency they owe.
        stale2002 6y ago
        Holding enough currency to have a small amount of hedged safety against risk of that currency changing in value is not really a good enough reason to say that a country would be able to "force" "taxpapers to be subject to its currency". Even if we say that people would hold some of that original currency, there could still be a significant benefit to transferring most of your wealth to a deflationary currency. Therefore, people would still be able to avoid being subject to that original currency to a large degree.

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?
        ric2b 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”. And how much does that cost? I bet it's more than 5 cents. > Bitcoin divisibility is limited, by design, to 0.00000001 BTC (1 Satoshi) Not by design, that's an implementation details that can easily be changed in the future if 1 sat starts to become valuable enough to make a difference. > and trades involving BTC slow or stop completely. Do you have an example of a single commodity in the history of humanity that simply stopped being traded because it became "too valuable"? I can't even understand how that makes sense, if it's valuable some people will want to sell it and get something that is more useful to them, like a house, a car, whatever. People don't commonly decide to hold an asset until their death bed. > But what happens to the “store of value” part of BTC if it is no longer the “medium of exchange”? What happened to Gold?
stale2002 6y ago
Government can do whatever inflation adjustments that it wants. What it can't do, though, is force people to accept them. If you want your money to inflate, you are free to use any infatuation currency that you want. But other people, who prefer to not be subject to inflation, are now free to not be subject to it.
- xapata 6y ago
  Can't the government force taxes to be paid in the currency of its choice, thereby making taxpayers (residents, visitors, and their counter-parties) subject to its currency?
  - stale2002 6y ago
    > thereby making taxpayers (residents, visitors, and their counter-parties) subject to its currency? It does not make them subject to inflation, no. If you hold entirely cryptocurrency, you are not subject to the inflation of holding the currency. Instead, you can simply convert to that currency, only when you need to pay taxes. This avoids the inflation, in the same way that hold stock in a company, and not holding any dollars, avoids you from being subject to inflation.
    - xapata 6y ago
      Suppose you had a particular debt, denominated in currency A, owed at the end of the year. Would you want to hold some amount of currency A throughout the year to ensure you could pay that debt? I suppose you could argue that you'd buy some currency swaps or somesuch, but most people would just hold that currency. Remember the Asian Financial Crisis, when a bunch of the "tigers" had loans denominated in USD, Francs, etc., and then there was a big capital outflow, tanking their local currencies against those debts? People will want to make sure they don't float against the currency they owe.
      - stale2002 6y ago
        Holding enough currency to have a small amount of hedged safety against risk of that currency changing in value is not really a good enough reason to say that a country would be able to "force" "taxpapers to be subject to its currency". Even if we say that people would hold some of that original currency, there could still be a significant benefit to transferring most of your wealth to a deflationary currency. Therefore, people would still be able to avoid being subject to that original currency to a large degree.