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there is over $1 trillion held in Bitcoin, which represents a lot of people and companies. how exactly do you unwind that without generating a massive backlash

there is over $1 trillion held in Bitcoin, which represents a lot of people and companies. how exactly do you unwind that without generating a massive backlash and other secondary effects? would the government buy out everyone's position or what?

innagadadavida 6y ago
How about capping the maximum amount you can withdraw to something like 100k and taxing the rest at 99%?
TuringNYC 6y ago
They can do it indirectly by changing the tax treatment.
- gruez 6y ago
  In what way? You already have to pay capital gains on it.
  - ben_w 6y ago
    Governments have as much control over tax codes as developers have over source code (literally — a tax code is just some written instructions, so it can be any computable function if you really want to do that). Governments can break entire sectors accidentally, doing so deliberately is trivial. For example, they could make a special cryptocurrency tax which is 100%. And/or a heavy tax on all currency exchanges “expect for the national currencies of the nations in Annex D”, and Annex D turns out to be a list of countries that they have a specific trade agreement with.
  - TuringNYC 6y ago
    They can have things like Transfer Taxes (https://en.wikipedia.org/wiki/Transfer_tax https://en.wikipedia.org/wiki/Transfer_tax) to reduce liquidity and hence desirability They can remove long-term capital gains on it and make it all short term treatment or partly short term treatment (I think that is how it works for futures IIRC.) They could create different categories of taxes (e.g., what we have for dividends), except with higher categories.
creato 6y ago
I can't put my finger on it but I doubt the valuation of bitcoin/other crypto assets when converted to USD. Look at NFTs: there's no way those prices would hold if someone were actually paying USD. Those prices are only possible because people are exchanging one funny-money cryptocurrency for another. I think the basic issue is there is huge amounts of cryptocurrency that can't be converted to USD for one reason or another (proceeds of ransomware, inability to pass KYC checks, etc.), and that is causing some crypto assets to be worth far less USD than others, and inflating the price of assets when purchased with those coins. But that isn't stopping people from pricing them just the same.
- solosoyokaze 6y ago
  > I can't put my finger on it but I doubt the valuation of bitcoin/other crypto assets when converted to USD. That valuation is based on what you can, right now, exchange crypto for USD on the exchanges.
  - NickNameNick 6y ago
    Sure, but only so long as most holders of bitcoin don't actually do it.
    - solosoyokaze 6y ago
      The amounts tied to NFTs should be easily exchangeable without having an impact on the price.
- Havoc 6y ago
  >Look at NFTs: there's no way those prices would hold if someone were actually paying USD. Those prices are only possible because people are exchanging one funny-money cryptocurrency for another. Not really - because you could exchange you crypto for USD easily & reliably enough. The second that's true it stops being "funny-money" as you put it. Contrast that with monopoly money where nobody will give you USD for it. NFTs - either people are doing it for the giggles or they're betting on greater fool theory
yumraj 6y ago
Aren't majority of bitcoin held by a small majority, that is both international (read China) and anonymous. So, who will participate in this massive backlash in the US besides Elon Musk and Dorsey whose companies have public positions in bitcoin, and a few others?
- jsutton 6y ago
  1. It's a false narrative that majority of bitcoin is held by a small majority, as this doesn't account for custodianship services, funds, lost coins, etc. [1] 2. Many companies and citizens and even the US gov itself have over $1M in bitcoin, to name a few: Square, Microstrategy/Michael Saylor, Greyscale, Tim Draper, Winklevoss/Gemini, etc [2] Safe to say, Bitcoin and crypto is Big Business now in the US, with hundreds of companies and startups in the space based in the US. [1] https://insights.glassnode.com/bitcoin-supply-distribution/ https://insights.glassnode.com/bitcoin-supply-distribution/ [2] https://www.kevinrooke.com/bitcoin https://www.kevinrooke.com/bitcoin

innagadadavida 6y ago

How about capping the maximum amount you can withdraw to something like 100k and taxing the rest at 99%?

TuringNYC 6y ago

They can do it indirectly by changing the tax treatment.

gruez 6y ago
In what way? You already have to pay capital gains on it.
- ben_w 6y ago
  Governments have as much control over tax codes as developers have over source code (literally — a tax code is just some written instructions, so it can be any computable function if you really want to do that). Governments can break entire sectors accidentally, doing so deliberately is trivial. For example, they could make a special cryptocurrency tax which is 100%. And/or a heavy tax on all currency exchanges “expect for the national currencies of the nations in Annex D”, and Annex D turns out to be a list of countries that they have a specific trade agreement with.
- TuringNYC 6y ago
  They can have things like Transfer Taxes (https://en.wikipedia.org/wiki/Transfer_tax https://en.wikipedia.org/wiki/Transfer_tax) to reduce liquidity and hence desirability They can remove long-term capital gains on it and make it all short term treatment or partly short term treatment (I think that is how it works for futures IIRC.) They could create different categories of taxes (e.g., what we have for dividends), except with higher categories.

creato 6y ago

I can't put my finger on it but I doubt the valuation of bitcoin/other crypto assets when converted to USD. Look at NFTs: there's no way those prices would hold if someone were actually paying USD. Those prices are only possible because people are exchanging one funny-money cryptocurrency for another. I think the basic issue is there is huge amounts of cryptocurrency that can't be converted to USD for one reason or another (proceeds of ransomware, inability to pass KYC checks, etc.), and that is causing some crypto assets to be worth far less USD than others, and inflating the price of assets when purchased with those coins. But that isn't stopping people from pricing them just the same.

solosoyokaze 6y ago
> I can't put my finger on it but I doubt the valuation of bitcoin/other crypto assets when converted to USD. That valuation is based on what you can, right now, exchange crypto for USD on the exchanges.
- NickNameNick 6y ago
  Sure, but only so long as most holders of bitcoin don't actually do it.
  - solosoyokaze 6y ago
    The amounts tied to NFTs should be easily exchangeable without having an impact on the price.
Havoc 6y ago
>Look at NFTs: there's no way those prices would hold if someone were actually paying USD. Those prices are only possible because people are exchanging one funny-money cryptocurrency for another. Not really - because you could exchange you crypto for USD easily & reliably enough. The second that's true it stops being "funny-money" as you put it. Contrast that with monopoly money where nobody will give you USD for it. NFTs - either people are doing it for the giggles or they're betting on greater fool theory

yumraj 6y ago

Aren't majority of bitcoin held by a small majority, that is both international (read China) and anonymous. So, who will participate in this massive backlash in the US besides Elon Musk and Dorsey whose companies have public positions in bitcoin, and a few others?

jsutton 6y ago
1. It's a false narrative that majority of bitcoin is held by a small majority, as this doesn't account for custodianship services, funds, lost coins, etc. [1] 2. Many companies and citizens and even the US gov itself have over $1M in bitcoin, to name a few: Square, Microstrategy/Michael Saylor, Greyscale, Tim Draper, Winklevoss/Gemini, etc [2] Safe to say, Bitcoin and crypto is Big Business now in the US, with hundreds of companies and startups in the space based in the US. [1] https://insights.glassnode.com/bitcoin-supply-distribution/ https://insights.glassnode.com/bitcoin-supply-distribution/ [2] https://www.kevinrooke.com/bitcoin https://www.kevinrooke.com/bitcoin