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Like most modern regulation problems, we suffer from two things. 1. We are trying to fit new concepts to old systems 2. We lack sufficient clear and agreed up

Like most modern regulation problems, we suffer from two things. 1. We are trying to fit new concepts to old systems 2. We lack sufficient clear and agreed upon terminology and definitions. You could see this in the privacy argument for files when they are uploaded to the cloud and if they were free to access by law enforcement. You can see this now in the blanket statement of "crypto" that fails to acknowledge that it contains projects that act like equities, others like currency, and some like both.

loeg 2y ago
> blanket statement of "crypto" that fails to acknowledge that it contains projects that act like equities, others like currency, and some like both. It's kind of an inverse relationship, isn't it? The ones with the most capital gains are the least currency-like; anything that behaves like a currency (perhaps USDC or USDT) has no appreciable capital gains to tax anyway.
- Lerc 2y ago
  Bitcoin has interacting forces that work in opposite directions. The increase in value makes it provide income as capital gains, but reduces its ability to be a currency. Reduced ability as a currency inhibits its value, reducing it's ability to provide income as capital gains. It's hard to assess what this would mean over time when you already know the history of the price biasing your viewpoint. Especially when you have to modulate that value by the effects of media coverage and public opinion contributing to a boom/bust cycle. I could see how it could be consistent with the price history with stepped increases in value as its long term potential as a currency is reassessed as being more likely, each step triggers an oscillation as the opposing forces react to the change in value and change in stability respectively. I think spread latency (not everyone reacts to the forces at the same rate) would have a dampening effect causing things to flatten out over time. Worst case scenario would be if the competing forces cause an ever increasing oscillation. I think that should mean that the end state for Bitcoin should be relatively stable, but at a value that we just don't yet know $0, $100, $1,000,000 could all happen. If it turns out to be $1,000,000, I'm completely ok with people paying tax on the increase in value if they bought at $10. On the other hand if the price remains stable around there, then people who used it as a currency would not generate much taxation income, but cause a considerable amount of paperwork to keep track of everything. Perhaps in that instance A percentage capital gain threshold would be in order. Perhaps something like, if the gain over a period is more than inflation_rate*1.1 capital gains tax kicks in.
ozim 2y ago
IANAL but everything that is supposed to be “new concept” is covered by existing laws. People mostly are not aware of what is there really written in law and second and maybe more important don’t want to know because if they would apply existing law they would not earn as much. Ignoring laws just like Uber or Airbnb doesn’t make law not applicable or a new concept. Driving people around for money was regulated, the same with renting apartments. The same with cryptocurrency stuff and coin offerings - something being a meme coin doesn’t magically make law not applicable if dozens of people buy it with hope for its value increasing and people selling it making funny pictures about going to “the moon” instead of promising future returns.

loeg 2y ago

> blanket statement of "crypto" that fails to acknowledge that it contains projects that act like equities, others like currency, and some like both. It's kind of an inverse relationship, isn't it? The ones with the most capital gains are the least currency-like; anything that behaves like a currency (perhaps USDC or USDT) has no appreciable capital gains to tax anyway.

Lerc 2y ago
Bitcoin has interacting forces that work in opposite directions. The increase in value makes it provide income as capital gains, but reduces its ability to be a currency. Reduced ability as a currency inhibits its value, reducing it's ability to provide income as capital gains. It's hard to assess what this would mean over time when you already know the history of the price biasing your viewpoint. Especially when you have to modulate that value by the effects of media coverage and public opinion contributing to a boom/bust cycle. I could see how it could be consistent with the price history with stepped increases in value as its long term potential as a currency is reassessed as being more likely, each step triggers an oscillation as the opposing forces react to the change in value and change in stability respectively. I think spread latency (not everyone reacts to the forces at the same rate) would have a dampening effect causing things to flatten out over time. Worst case scenario would be if the competing forces cause an ever increasing oscillation. I think that should mean that the end state for Bitcoin should be relatively stable, but at a value that we just don't yet know $0, $100, $1,000,000 could all happen. If it turns out to be $1,000,000, I'm completely ok with people paying tax on the increase in value if they bought at $10. On the other hand if the price remains stable around there, then people who used it as a currency would not generate much taxation income, but cause a considerable amount of paperwork to keep track of everything. Perhaps in that instance A percentage capital gain threshold would be in order. Perhaps something like, if the gain over a period is more than inflation_rate*1.1 capital gains tax kicks in.

ozim 2y ago

IANAL but everything that is supposed to be “new concept” is covered by existing laws. People mostly are not aware of what is there really written in law and second and maybe more important don’t want to know because if they would apply existing law they would not earn as much. Ignoring laws just like Uber or Airbnb doesn’t make law not applicable or a new concept. Driving people around for money was regulated, the same with renting apartments. The same with cryptocurrency stuff and coin offerings - something being a meme coin doesn’t magically make law not applicable if dozens of people buy it with hope for its value increasing and people selling it making funny pictures about going to “the moon” instead of promising future returns.