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> I bet you wish you hadn't spent those hundreds of bitcoin, don't you? No - not really. The point of them wasn't to hold them with an expectation that they w

> I bet you wish you hadn't spent those hundreds of bitcoin, don't you? No - not really. The point of them wasn't to hold them with an expectation that they would become unreasonably valuable (speculation). The point of them was to make an exchange for a good that was otherwise hard to acquire (in this case - weed, before legalization). You'll notice that's not something most of you "crypto advocates" ever actually do. You know, the sole purpose of a currency - exchanging it for goods and services. Usually you treat it purely as a speculative asset, to be exchanged for another currency that actually can be traded for goods and services. > Neither do gold, silver, copper, or greenbacks, and they work pretty well as currencies. Of fucking course they do - the government taxes exchanges on them at unreasonably high rates (gold has a 28% long term capital gains tax, vs the normal 15-20%.) precisely because they understand that they're used as value stores (proxies for currency). And that's precisely my point, really - the government WILL NOT protect you from fraud in the crypto space if it doesn't have a way to regulate and mediate the costs of doing so (such as tax derived income from the exchange). In which case - all of your above points become moot, because now you're right back to asking the government to enforce your contract or bill of sale. Remind me again how crypto is going to protect me from that government...? --- edit - if you're actually interested, you can read more of my thoughts here: https://news.ycombinator.com/item?id=29330879&p=2#29331460 https://news.ycombinator.com/item?id=29330879&p=2#29331460 I was there when MTGox blew up, I'm acutely aware of the risks of fraud in this space, outside of the current pump and dump fraud that's frankly rampant in the crypto world. Your finance 2.0 looks a whole lot like cooked books and bankers who run away with the cash once they have it, with an unhealthy dose of gambling tossed on top - it's not pretty.

DonHopkins 5y ago
Please support your local union artisanal farm-to-bong marijuana farmers! https://www.youtube.com/watch?v=V2CU1cdTlQE https://www.youtube.com/watch?v=V2CU1cdTlQE
kragen 5y ago
> Of fucking course [gold, silver, copper, and greenbacks work pretty well as currencies] - the government taxes exchanges on them at unreasonably high rates (gold has a 28% long term capital gains tax, vs the normal 15-20%.) Gold, silver, and copper have worked pretty well as currencies for 2700 years under a variety of taxation schemes, of which by far the most common was "no taxation", which I believe is the case here. Exchanges of greenbacks are not taxed at unreasonably high rates anywhere I know of. Moreover, it isn't clear how taxing the exchange of capital gains on certain commodities at an unreasonably high rate would help it function as a currency; perhaps you mean that it stabilizes their value? But the value of the metals we're talking about is primarily determined by the world market. It is of course correct that some governments will refuse to referee disputes without imposing what you describe as "unreasonably high" taxes. Historically, though, many governments have successfully resolved disputes without imposing confiscatory taxes or demanding far-reaching extrajudicial powers against people outside their jurisdiction, and we have every reason to believe that such governments will continue to exist, even if you don't have the luck of having one yourself. You can always emigrate, you know. But possibly not if you need your government's permission to take your savings with you. I agree with you about the risks of fraud and the dismaying ubiquity of pump-and-dump scams, and I agree that if you do not hold your bitcoins yourself they are just as vulnerable as if you left them in a bank—a lesson missed by most current "crypto advocates," who keep their coins in their Binance accounts. I am sorry to hear about your loss to the MtGox theft.
- horsawlarway 5y ago
  Unless you can find a contractor who will remodel your bathroom for gold (or god help them, bitcoin), or a food vendor who will take gold instead of your local currency (at an equivalent rate) then when you actually need goods and services, you convert to a local currency, which is taxed. In exchange for that taxation, you can write a contract that says "I will give you X gold for Y dollars" and expect the government to back that contract. It will provide legal avenues for you to use the services they have available to recoup funds in the event of fraud (up to and including physical force and imprisonment, which almost all governments keep a tight monopoly on). They tax you because providing those services incurs a cost, and they need a way to continue offering them. Historically, you could make exchanges in those assets, but there was often zero governmental protection for doing so (sometimes things considered morally harmful were punished by the government, such as theft, but they certainly wouldn't agree to do things like enforce contract disputes for free - at best you get a legal wager [see: https://en.wikipedia.org/wiki/Compurgation https://en.wikipedia.org/wiki/Compurgation] where you both pay up front to be heard. At other times courts were reserved to disputes above a certain value, or lower classes were prohibited from making a legally valid contract in the first place, precisely because enforcement was expensive) If bitcoin makes that taxation impossible (or even unreasonably difficult), and it's possible to freely trade without recourse (no freezing, no transaction reversal, no monetary control at all) two options are present: 1) Stop resolving disputes for bitcoin (ex: China). 2) Add taxation, while adding back forms of control to make the costs reasonable and predictable, to match taxes. --- Long point short - Sure, 2700 years ago you could trade shiny metal for things without taxes, but it was "at your own risk", under a governmental structure that had more leeway for you enforcing it yourself (no prohibition or monopoly on violence and imprisonment). Those are not the conditions we find ourselves in today.
  - Karrot_Kream 5y ago
    > Unless you can find a contractor who will remodel your bathroom for gold (or god help them, bitcoin), or a food vendor who will take gold instead of your local currency (at an equivalent rate) then when you actually need goods and services, you convert to a local currency, which is taxed. I'm not sure if you've spent any time hanging around in the world of illegal immigrants, but in my family's circles, there _are_ contractors that are loose family friends of ours who _do_ take gold in order to perform services. Often the gold is repurposed into jewellery or otherwise sold to other immigrant-owned businesses. Eventually someone in the immigrant network can wash the gold clean. Members of our extended family fled civil war by holding jewellery on their person , and there are stories of others who melted their jewellery down and travelled with it, and used these to fund their lives in Western nations they emigrated to. Now that my family's country has politically stabilized this is a lot rarer and as such I don't know, at least in our extended network, anyone who still washes gold clean.

DonHopkins 5y ago

Please support your local union artisanal farm-to-bong marijuana farmers! https://www.youtube.com/watch?v=V2CU1cdTlQE https://www.youtube.com/watch?v=V2CU1cdTlQE

kragen 5y ago

> Of fucking course [gold, silver, copper, and greenbacks work pretty well as currencies] - the government taxes exchanges on them at unreasonably high rates (gold has a 28% long term capital gains tax, vs the normal 15-20%.) Gold, silver, and copper have worked pretty well as currencies for 2700 years under a variety of taxation schemes, of which by far the most common was "no taxation", which I believe is the case here. Exchanges of greenbacks are not taxed at unreasonably high rates anywhere I know of. Moreover, it isn't clear how taxing the exchange of capital gains on certain commodities at an unreasonably high rate would help it function as a currency; perhaps you mean that it stabilizes their value? But the value of the metals we're talking about is primarily determined by the world market. It is of course correct that some governments will refuse to referee disputes without imposing what you describe as "unreasonably high" taxes. Historically, though, many governments have successfully resolved disputes without imposing confiscatory taxes or demanding far-reaching extrajudicial powers against people outside their jurisdiction, and we have every reason to believe that such governments will continue to exist, even if you don't have the luck of having one yourself. You can always emigrate, you know. But possibly not if you need your government's permission to take your savings with you. I agree with you about the risks of fraud and the dismaying ubiquity of pump-and-dump scams, and I agree that if you do not hold your bitcoins yourself they are just as vulnerable as if you left them in a bank—a lesson missed by most current "crypto advocates," who keep their coins in their Binance accounts. I am sorry to hear about your loss to the MtGox theft.

horsawlarway 5y ago
Unless you can find a contractor who will remodel your bathroom for gold (or god help them, bitcoin), or a food vendor who will take gold instead of your local currency (at an equivalent rate) then when you actually need goods and services, you convert to a local currency, which is taxed. In exchange for that taxation, you can write a contract that says "I will give you X gold for Y dollars" and expect the government to back that contract. It will provide legal avenues for you to use the services they have available to recoup funds in the event of fraud (up to and including physical force and imprisonment, which almost all governments keep a tight monopoly on). They tax you because providing those services incurs a cost, and they need a way to continue offering them. Historically, you could make exchanges in those assets, but there was often zero governmental protection for doing so (sometimes things considered morally harmful were punished by the government, such as theft, but they certainly wouldn't agree to do things like enforce contract disputes for free - at best you get a legal wager [see: https://en.wikipedia.org/wiki/Compurgation https://en.wikipedia.org/wiki/Compurgation] where you both pay up front to be heard. At other times courts were reserved to disputes above a certain value, or lower classes were prohibited from making a legally valid contract in the first place, precisely because enforcement was expensive) If bitcoin makes that taxation impossible (or even unreasonably difficult), and it's possible to freely trade without recourse (no freezing, no transaction reversal, no monetary control at all) two options are present: 1) Stop resolving disputes for bitcoin (ex: China). 2) Add taxation, while adding back forms of control to make the costs reasonable and predictable, to match taxes. --- Long point short - Sure, 2700 years ago you could trade shiny metal for things without taxes, but it was "at your own risk", under a governmental structure that had more leeway for you enforcing it yourself (no prohibition or monopoly on violence and imprisonment). Those are not the conditions we find ourselves in today.
- Karrot_Kream 5y ago
  > Unless you can find a contractor who will remodel your bathroom for gold (or god help them, bitcoin), or a food vendor who will take gold instead of your local currency (at an equivalent rate) then when you actually need goods and services, you convert to a local currency, which is taxed. I'm not sure if you've spent any time hanging around in the world of illegal immigrants, but in my family's circles, there _are_ contractors that are loose family friends of ours who _do_ take gold in order to perform services. Often the gold is repurposed into jewellery or otherwise sold to other immigrant-owned businesses. Eventually someone in the immigrant network can wash the gold clean. Members of our extended family fled civil war by holding jewellery on their person , and there are stories of others who melted their jewellery down and travelled with it, and used these to fund their lives in Western nations they emigrated to. Now that my family's country has politically stabilized this is a lot rarer and as such I don't know, at least in our extended network, anyone who still washes gold clean.