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Bitcoin isn't regulated, there is no oversight or regulation. There is oversight and regulation over the car industry, just like there is over the financial ind

Bitcoin isn't regulated, there is no oversight or regulation. There is oversight and regulation over the car industry, just like there is over the financial industry. It doesn't stop all fraud or loss, but it does stop some. I can't redeem my fiat currency for gold bars, but I can and must pay taxes for it, and that creates a demand floor. It means there will always be someone willing to trade dollars for something so that they can pay their taxes.

zAy0LfpBZLC8mAC 13y ago
As for bitcoin being regulated: Well, first of all, that's not an inherent property of bitcoin, but of how it is currently handled politically. And actually, I would argue it isn't actually true. In lots of places, regulation of financial services applies to bitcoin just as it does to dollars, euros, stock, funds, insurance, ... - it may not necessarily consider the specifics of how bitcoin works, but it's not like you could legally operate an unregulated retirement fund in most countries just because you are using bitcoin, and all the general laws regarding fraud and stuff obviously still apply when bitcoin is involved. As for needing dollars to pay taxes: That doesn't really make much sense, does it? If people didn't want to use it for anything but for paying taxes, how much taxes would they have to pay? If noone wants to actually have dollars, its market value would be zero, so if you measure the income that you want to tax in dollars, it would also be zero, and any percentage of that would still be zero, and so you would not have to pay any taxes at all, and thus would not need any dollars at all in order to pay them (and the government wouldn't even care, as dollars that noone wants to exchange for goods and services are completely useless for the government to have, so why collect them). The only way for the government to actually force the creation of a demand floor would be to force people to sell certain goods and services at government-mandated prices - in which case what you need in order to pay your taxes ultimately are those goods and services and not dollars.
- dragonwriter 13y ago
  > As for needing dollars to pay taxes: That doesn't really make much sense, does it? If people didn't want to use it for anything but for paying taxes, how much taxes would they have to pay? As long as taxes are collected other than based on just income in the form of dollars, just as much (or possibly, quite a bit more in real terms) as if they wanted dollars for everything else as well as paying taxes. > If noone wants to actually have dollars, its market value would be zero, so if you measure the income that you want to tax in dollars, it would also be zero Wrong, if the market value of dollars was near zero, and you have a tax system that has taxes other than on cash income (e.g., ad valorem property taxes, income taxes that include as income the cash value of non-cash goods and services received in place of cash income, etc.) but demands taxes in dollars, than the tax in dollars will be very large numbers, which will require you to acquire very large numbers of dollars to pay. (If the value of dollars was actually zero, the tax would be infinite, but then, the value of dollars won't actually be zero, because as the value of dollars declines, the number of them needed to meet tax obligations increases, which shores up the value.)
  - zAy0LfpBZLC8mAC 13y ago
    If I was paid in bananas, what would be the value of those bananas that I would have to declare for taxes in dollars when the market value of dollars was zero? And how many dollars would I need in order to pay taxes on that income? edit: forget that, you are right, of course - I guess it's not a good idea to treat infinity as a number ;-)

zAy0LfpBZLC8mAC 13y ago

As for bitcoin being regulated: Well, first of all, that's not an inherent property of bitcoin, but of how it is currently handled politically. And actually, I would argue it isn't actually true. In lots of places, regulation of financial services applies to bitcoin just as it does to dollars, euros, stock, funds, insurance, ... - it may not necessarily consider the specifics of how bitcoin works, but it's not like you could legally operate an unregulated retirement fund in most countries just because you are using bitcoin, and all the general laws regarding fraud and stuff obviously still apply when bitcoin is involved. As for needing dollars to pay taxes: That doesn't really make much sense, does it? If people didn't want to use it for anything but for paying taxes, how much taxes would they have to pay? If noone wants to actually have dollars, its market value would be zero, so if you measure the income that you want to tax in dollars, it would also be zero, and any percentage of that would still be zero, and so you would not have to pay any taxes at all, and thus would not need any dollars at all in order to pay them (and the government wouldn't even care, as dollars that noone wants to exchange for goods and services are completely useless for the government to have, so why collect them). The only way for the government to actually force the creation of a demand floor would be to force people to sell certain goods and services at government-mandated prices - in which case what you need in order to pay your taxes ultimately are those goods and services and not dollars.

dragonwriter 13y ago
> As for needing dollars to pay taxes: That doesn't really make much sense, does it? If people didn't want to use it for anything but for paying taxes, how much taxes would they have to pay? As long as taxes are collected other than based on just income in the form of dollars, just as much (or possibly, quite a bit more in real terms) as if they wanted dollars for everything else as well as paying taxes. > If noone wants to actually have dollars, its market value would be zero, so if you measure the income that you want to tax in dollars, it would also be zero Wrong, if the market value of dollars was near zero, and you have a tax system that has taxes other than on cash income (e.g., ad valorem property taxes, income taxes that include as income the cash value of non-cash goods and services received in place of cash income, etc.) but demands taxes in dollars, than the tax in dollars will be very large numbers, which will require you to acquire very large numbers of dollars to pay. (If the value of dollars was actually zero, the tax would be infinite, but then, the value of dollars won't actually be zero, because as the value of dollars declines, the number of them needed to meet tax obligations increases, which shores up the value.)
- zAy0LfpBZLC8mAC 13y ago
  If I was paid in bananas, what would be the value of those bananas that I would have to declare for taxes in dollars when the market value of dollars was zero? And how many dollars would I need in order to pay taxes on that income? edit: forget that, you are right, of course - I guess it's not a good idea to treat infinity as a number ;-)