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You could pay your taxes. And all the others who need to pay their taxes, would need to trade valuable things to you for the dollars they need to pay their tax

You could pay your taxes. And all the others who need to pay their taxes, would need to trade valuable things to you for the dollars they need to pay their taxes. Also, almost all world trade is ultimately settled in dollars. And so, if you want to buy oil/food/fertilizer/machine tools/etc. on the world market, you need those dollar bills again.

thesz 4y ago
The concentration of money in one hand means it is worthless for any other hand. You can't pay taxes with worthless money.
- selectodude 4y ago
  It’s not worthless. The United States, which happens to be the largest economy in the world, requires taxes to be paid in dollars, regardless of how you’ve settled your transaction. If you and I trade a car for 40,000 chocolate bars, the IRS demands we figure out the dollar cost and pay them their due.
  - 9864250 4y ago
    If I owned all the dollars, the US would simply decide to start demanding taxes in something else because it could not use those dollars for anything. If it refused to switch to another currency, it would not be able to pay the people who would force me to pay taxes, so there would be no reason for me to pay taxes.
    - dragontamer 4y ago
      The US Debt is denominated in dollars. The USA has promised to pay its entire $24+ Trillion debt, in dollars.
      - 9864250 4y ago
        But that would not make any sense if one person held all the dollars. The creditors would have no use for dollars, and the US would need to switch to another currency in order to be able to pay its employees. They could print however many dollars they wanted, and could pay back the debt that way, but that would not solve the problem of the dollar no longer being useful as a currency. The government's employees would have no reason to accept the dollar because nobody else would accept it. The dollar is primarily valuable because it's used as a currency. If it stopped being used as a currency, its value would be zero. This is no different from Bitcoin.
    - selectodude 4y ago
      The United States can print more dollars. Hell, they can declare all your dollars not real and throw you in jail. Every dollar is owned by the US Government. You’re just borrowing them.
- shkkmo 4y ago
  If you had all the dollars and people still had to pay their taxes in dollars. You would be able to get a LOT of stuff for those dollars because everyone would need them. The actual concern with this argument is that "You can only pay your taxes in US dollars" is a backing that is contingent on the policy of the US Government. The strength of that backing depends on your view about the likelihood that such a policy will stay in place. (Edit: granted, if all USD were owned by a single entity, the likelihood that such a policy would be revoked is much, much higher.)
  - est31 4y ago
    It does depend on the policy, yes, but note that government backed (local) monopolies exist in other areas too. Like for example with hospitals, or with phone network operators.
    - shkkmo 4y ago
      I'm not sure how this comment relates to the topic as we aren't discussing any sort of monopoly.
      - est31 4y ago
        If you have all the dollars then you have a monopoly on them. If the government forces people to pay their taxes in dollars you have a government supported monopoly. It stands and falls with the government's support for it, the connected regulations, etc.
  - WorldMaker 4y ago
    > (Edit: granted, if all USD were owned by a single entity, the likelihood that such a policy would be revoked is much, much higher.) If all of USD were owned by a single entity, the US Government just prints more. They will always have that power. That may cause inflation effects that they would be concerned about in the long term, but they have an immediate reaction lever to increase the monetary supply in such a (weird) hypothetical. (Though the correspondence between monetary supply and long-term inflation has always been much more theoretical "cause-and-effect" rather than showing practical, real world correlation much less "cause-and-effect". Especially this side of the Gold Standard the practical relationship between monetary supply and inflation is incredibly complex, and while you will find many people still presume an inflationary relationship the practical effects have been much weirder. [There are times in recent US history where USD monetary supply was at all time highs and inflation at all time lows.]) (Unless you hypothesizing an even weirder hypothetical where the monetary supply is increased by the US Government just handing the dollars to the single USD dollar holder and hoping that provides incentive to "trickle down" dollars back to everyone, but there's very little anyone can do with the onion of dumb in that weird hypothetical.)
notch656a 4y ago
Bitcoin is legal currency for taxes in El Salvador. And someone there will always be someone in el salvador needing to pay taxes.
- davidweatherall 4y ago
  Yes, but Warren Buffer doesn't live in El Salvador, so the only thing he could do with BTC is sell it to someone for USD so the point still stands
- est31 4y ago
  So Bitcoin should be priced according to the size of the El Salvadorian economy. Not all of the economy, but the economy conducted in bitcoin. Bitcoin can't take credit for people using alternative currencies to pay their taxes in El Salvador, or using it to buy groceries, pay rent, etc.
- nikanj 4y ago
  But it’s not the only one, unlike the USD
  - olalonde 4y ago
    So do you believe USD would be worth zero if the US accepted foreign currencies for tax payment? Or abolished taxes?
- pessimizer 4y ago
  > And someone there will always be someone in el salvador needing to pay taxes. 1) You don't need bitcoin to pay taxes in El Salvador. You need dollars to pay taxes in the US. 2) Why would people in El Salvador give you their USD for bitcoin when you can pay taxes there in USD?
psychlops 4y ago
In other words, a government mandate is necessary to arrogate value to paper.
olalonde 4y ago
It is now possible to pay for stuff and pay taxes in BTC in multiple jurisdictions.
- nradov 4y ago
  It is only possible to pay taxes with BTC in a few failed states like El Salvador. So that's hardly a positive. And I expect that little experiment will probably be terminated soon after Bukele leaves office.
  - olalonde 4y ago
    Sure, but the argument wasn't that BTC was merely overpriced, but that it was mathematically worth zero.
  - plsbenice34 4y ago
    Zermatt in Switzerland is a failed state how?
  - prds_lost 4y ago
    Hey now, Colorado has started accepting Crypto payments recently. Per the CO Dept of Revenue - "Starting September 1, 2022, the Colorado Department of Revenue (DOR) will now accept Cryptocurrency as an additional form of payment for all state taxpayers. This includes individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax."
    - nradov 4y ago
      The state is not actually accepting cryptocurrency tax payments. Tax liabilities are still denominated in dollars. All that they have done is partner with a third party payment processor which will sell you dollars for cryptocurrency at the current market price (minus fees), and then forward those dollars to the tax authorities.

thesz 4y ago

The concentration of money in one hand means it is worthless for any other hand. You can't pay taxes with worthless money.

selectodude 4y ago
It’s not worthless. The United States, which happens to be the largest economy in the world, requires taxes to be paid in dollars, regardless of how you’ve settled your transaction. If you and I trade a car for 40,000 chocolate bars, the IRS demands we figure out the dollar cost and pay them their due.
- 9864250 4y ago
  If I owned all the dollars, the US would simply decide to start demanding taxes in something else because it could not use those dollars for anything. If it refused to switch to another currency, it would not be able to pay the people who would force me to pay taxes, so there would be no reason for me to pay taxes.
  - dragontamer 4y ago
    The US Debt is denominated in dollars. The USA has promised to pay its entire $24+ Trillion debt, in dollars.
    - 9864250 4y ago
      But that would not make any sense if one person held all the dollars. The creditors would have no use for dollars, and the US would need to switch to another currency in order to be able to pay its employees. They could print however many dollars they wanted, and could pay back the debt that way, but that would not solve the problem of the dollar no longer being useful as a currency. The government's employees would have no reason to accept the dollar because nobody else would accept it. The dollar is primarily valuable because it's used as a currency. If it stopped being used as a currency, its value would be zero. This is no different from Bitcoin.
  - selectodude 4y ago
    The United States can print more dollars. Hell, they can declare all your dollars not real and throw you in jail. Every dollar is owned by the US Government. You’re just borrowing them.
shkkmo 4y ago
If you had all the dollars and people still had to pay their taxes in dollars. You would be able to get a LOT of stuff for those dollars because everyone would need them. The actual concern with this argument is that "You can only pay your taxes in US dollars" is a backing that is contingent on the policy of the US Government. The strength of that backing depends on your view about the likelihood that such a policy will stay in place. (Edit: granted, if all USD were owned by a single entity, the likelihood that such a policy would be revoked is much, much higher.)
- est31 4y ago
  It does depend on the policy, yes, but note that government backed (local) monopolies exist in other areas too. Like for example with hospitals, or with phone network operators.
  - shkkmo 4y ago
    I'm not sure how this comment relates to the topic as we aren't discussing any sort of monopoly.
    - est31 4y ago
      If you have all the dollars then you have a monopoly on them. If the government forces people to pay their taxes in dollars you have a government supported monopoly. It stands and falls with the government's support for it, the connected regulations, etc.
- WorldMaker 4y ago
  > (Edit: granted, if all USD were owned by a single entity, the likelihood that such a policy would be revoked is much, much higher.) If all of USD were owned by a single entity, the US Government just prints more. They will always have that power. That may cause inflation effects that they would be concerned about in the long term, but they have an immediate reaction lever to increase the monetary supply in such a (weird) hypothetical. (Though the correspondence between monetary supply and long-term inflation has always been much more theoretical "cause-and-effect" rather than showing practical, real world correlation much less "cause-and-effect". Especially this side of the Gold Standard the practical relationship between monetary supply and inflation is incredibly complex, and while you will find many people still presume an inflationary relationship the practical effects have been much weirder. [There are times in recent US history where USD monetary supply was at all time highs and inflation at all time lows.]) (Unless you hypothesizing an even weirder hypothetical where the monetary supply is increased by the US Government just handing the dollars to the single USD dollar holder and hoping that provides incentive to "trickle down" dollars back to everyone, but there's very little anyone can do with the onion of dumb in that weird hypothetical.)

notch656a 4y ago

Bitcoin is legal currency for taxes in El Salvador. And someone there will always be someone in el salvador needing to pay taxes.

davidweatherall 4y ago
Yes, but Warren Buffer doesn't live in El Salvador, so the only thing he could do with BTC is sell it to someone for USD so the point still stands
est31 4y ago
So Bitcoin should be priced according to the size of the El Salvadorian economy. Not all of the economy, but the economy conducted in bitcoin. Bitcoin can't take credit for people using alternative currencies to pay their taxes in El Salvador, or using it to buy groceries, pay rent, etc.
nikanj 4y ago
But it’s not the only one, unlike the USD
- olalonde 4y ago
  So do you believe USD would be worth zero if the US accepted foreign currencies for tax payment? Or abolished taxes?
pessimizer 4y ago
> And someone there will always be someone in el salvador needing to pay taxes. 1) You don't need bitcoin to pay taxes in El Salvador. You need dollars to pay taxes in the US. 2) Why would people in El Salvador give you their USD for bitcoin when you can pay taxes there in USD?

psychlops 4y ago

In other words, a government mandate is necessary to arrogate value to paper.

olalonde 4y ago

It is now possible to pay for stuff and pay taxes in BTC in multiple jurisdictions.

nradov 4y ago
It is only possible to pay taxes with BTC in a few failed states like El Salvador. So that's hardly a positive. And I expect that little experiment will probably be terminated soon after Bukele leaves office.
- olalonde 4y ago
  Sure, but the argument wasn't that BTC was merely overpriced, but that it was mathematically worth zero.
- plsbenice34 4y ago
  Zermatt in Switzerland is a failed state how?
- prds_lost 4y ago
  Hey now, Colorado has started accepting Crypto payments recently. Per the CO Dept of Revenue - "Starting September 1, 2022, the Colorado Department of Revenue (DOR) will now accept Cryptocurrency as an additional form of payment for all state taxpayers. This includes individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax."
  - nradov 4y ago
    The state is not actually accepting cryptocurrency tax payments. Tax liabilities are still denominated in dollars. All that they have done is partner with a third party payment processor which will sell you dollars for cryptocurrency at the current market price (minus fees), and then forward those dollars to the tax authorities.