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TLDR; there are two problems with tip4commit: 1. The obvious, that they are collecting funds on behalf of other people's work and then keeping them when the fu

by wdewind 12y ago

TLDR; there are two problems with tip4commit: 1. The obvious, that they are collecting funds on behalf of other people's work and then keeping them when the funds go 'unclaimed' 2. Even if you do want to claim it, they don't make it easy, and for someone in a complicated tax country (like the author, Austria) there is almost no way he could accept the money without incurring some kind of risk. So basically when they are keeping money that goes unclaimed it's very problematic because they don't make the money easy to claim in the first place. Obvious incentives issues. Point 2 is what this article is about.

mike_hearn 12y ago
I'm not sure it is. I'm not a huge fan of tip4commit either, I agree that it's opt-out model is bogus, but the fact that it uses Bitcoin seems irrelevant. The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. Obviously people make and accept tips using euros all the time, this is not illegal, so why it would be different using Bitcoin isn't obvious. You can declare tips as income, no problem. The real cause of his discomfort is revealed later in the post: Personally I believe that Bitcoin is a terrible currency ... If you have a completely broken piece of country then I can imagine that you are suspicious of regulation and this sort of thing, but for me regulation is what keeps my world running and working. Also, Bitcoin for me feels like a cult. The vocal people in the community seem like they don't actually care about Bitcoin, but they want to see it succeed so that their "investment" makes a profit So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. I do not consider myself particularly libertarian, though I do use and work on Bitcoin. Regardless, this doesn't seem like a great set of arguments. Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin.
- pdonis 12y ago
  > The author seems to believe he cannot accept tips, because of tax and regulation That's not what he said. He said that he doesn't want to deal with a system for accepting tips if the cost to him of the system (not just in money but in time and effort) is greater than the benefit. He mentioned two tipping systems (gratipay and bountysource) that, to him, don't have this problem.
- the_mitsuhiko 12y ago
  > author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. JFTR: "accepting tips" for software is something that is not at all straightforward. The way bountysource and others get around that is through invoices once a large enough amount has accumulated. I have no idea how that works in other countries. Gratipay/bountysource solve this problem, no bitcoin service I have seen does. > Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin. I think you misunderstand something there: I am pointing out why Bitcoin is something that does not solve problems for me and I doubt I am the only one. The premise of tip4commit is that it helps Open Source projects. It's not just not helping me, it's making my life more complicated. In fact, right now, pretty much anything that has bitcoin involved makes it harder for me.
  - mike_hearn 12y ago
    Could you explain why accepting tips is so complicated? What specific law means you cannot do it? Let me put this another way. If your friends give you money for your birthday, do you give it back to them and tell them you can't accept their gift because of tax and regulation? I doubt it! You may well declare the gifts on your tax return if it's big enough to bother with, but if Austria makes it hard to accept cash gifts of small amounts then something is seriously wrong with Austrian law and this is not something to be defended.
    - geofft 12y ago
      Even supposing something was seriously wrong with Austrian law, it's a little presumptuous to expect everyone affected to try to fight that. Maybe they're already under careful watch by the national tax agency after getting audited because of some honest mistake the past year. Maybe they're under probation under a law you and I would call unjust, but triggering further law-enforcement attention lands them in jail regardless of whether they were justified. (This scenario happens a lot in America, incidentally.) If someone says "I want to stay out of this", that should be their right.
- djur 12y ago
  This may have changed in the last 24 hours, but last I checked tip4commit's opt-out model is "get stuffed". The original controversy was over their refusal to remove projects from the site on request. I agree that Bitcoin is more or less irrelevant to the controversy, but like the OP says, the tip4commit defenders seem to have intentionally made it a pro/anti-Bitcoin conflict. Bitcoin advocates were mobilized to support the site.
  - cbsmith 12y ago
    > I agree that Bitcoin is more or less irrelevant to the controversy It's relevant insofar that tip4commit likely couldn't get away with what it was doing without it.
- geofft 12y ago
  > The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. I'm in the US, not Austria, but from what little I've seen of even the US's legal and tax system, doing something with money that you don't fully understand is a risk. I am glad that there are people who are willing to take that risk in the name of improving society, and pioneer the use of Bitcoin and other alternative currencies. But nobody should be obligated to take that risk if they don't want to. I would be completely unsurprised if some emergent behavior between the US tax code and other laws meant that if you were merely aware of people accepting tips on your behalf using your name, even if you didn't ask them to, there are tax or legal obligations. I would be completely unsurprised if the law says, if you ask them to stop and they don't, you're _obligated_ to initiate legal process to make them stop. I don't think the law says that, but it's certainly way less crazy than lots of funny corners of US tax and commerce law. I would also be completely unsurprised if US tax code got complicated when you're accepting Bitcoin as payment. I'm dimly aware that the IRS or FinCEN or someone issued guidance recently that Bitcoin doesn't count as a currency but instead counts as a something-else... and not being a cryptocurrency user, I haven't bothered to learn what that something-else is and how you're supposed to report taxes on it. If someone is willing to figure out how the law works, or pay their lawyer to, more power to them. But nobody should be _obligated_ to.
- pron 12y ago
  > So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. The only (or at least, the main) argument we ever hear in favor of Bitcoin is that it's unregulated, and therefore it's liked by people who dislike regulation. Why, then, is it surprising or illogical for someone to dislike Bitcoin because they're in favor of regulation? Being in favor, or against, regulation is a matter of personal political opinion, and that, in turn, shapes one's opinion of Bitcoin. This argument makes just as much sense as those for Bitcoin.
  - vegedor 12y ago
    The way I read it, the GP mocks the idea that a self-regulated system would be unregulated. AFAICT It's at least regulated by convention with regards to the pay out for mining.
- cbsmith 12y ago
  > The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. I should think that would be pretty obvious. Go ahead and try collecting regular currency for a charity of your choice without ever getting sign off from that charity and only ever giving them the proceeds if they ask. It will end very badly for you. > You can declare tips as income, no problem. No, there are a lot of potential problems that stem from this. In particular, it raises lots of flags about whether those tips are accurate, whether it is some form of money laundering, and whether they are really tips or something more nefarious. Unlike in the US, in a lot of other 1st world countries, handling taxes is incredibly straightforward (less than an hour of your time a year and zero risk of liability), but once you throw tips in to the equation now it's as difficult as it is for many people in the US. > So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. No, he's pointing out that its vocal fans have a distorted perspective and often don't really buy in to its virtues... but those problems are not why Bitcoin is a terrible currency.
- beagle3 12y ago
  It is very far from simple anywhere, especially in the US: It isn't perfectly clear if you should treat bitcoins as commodity or currency. See [0] for more details. As a general rule, if anyone tells me "but taxes aren't complicated" or "but what's the complication", I know they are talking from ideals and not experience. The Federal US tax code, last time I looked at it (2009) was over 71,000 pages (add a few more thousands per state). It doesn't get shorter with time. Of those, "only" 20,000 or so apply to every individual (not the same 20,000). Other countries are better, but the shortest country tax code I've had the pleasure (?) of dealing with was only 4,000 pages of printed text. Intrastate/intracountry transactions are usually complicated, but somewhat tractable. Cross-border transactions are usually ill-specified, can be classified in multitude of ways all technically legal - and yet, if the tax authorities in either country things you've done it wrong, you are assumed guilty until proven innocent. Anyone who is not scared of the tax code has not had to wrestle it. You may win some battles after working hard. But you never want to go into this war. [0] https://en.bitcoin.it/wiki/Tax_compliance https://en.bitcoin.it/wiki/Tax_compliance
lnanek2 12y ago
I don't have any use for tip4commit, personally, and couldn't care less if it succeeds either way. I did read the GitHub site, though, and your case 1) is incorrect. They return the money if it isn't claimed.
- japhyr 12y ago
  Are you sure about that? They said they return it to "the project", but that in no way guarantees that the money will go to any developer. The tip4commit people are clearly putting growth of their product above everything else, and that's generously assuming honorable intentions on their part. I couldn't see any clear strategy for getting money back to the original donors if a developer or project does not end up claiming the donation.
tzs 12y ago
In addition to tax issues, I'd also worry at least a bit about whether or not accepting money for your software might affect warranty disclaimers. I would not be surprised if in some jurisdictions it is harder for a commercial project to disclaim warranties, and for accepting money to cause a project to be classified as commercial.

by wdewind 12y ago

mike_hearn 12y ago

I'm not sure it is. I'm not a huge fan of tip4commit either, I agree that it's opt-out model is bogus, but the fact that it uses Bitcoin seems irrelevant. The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. Obviously people make and accept tips using euros all the time, this is not illegal, so why it would be different using Bitcoin isn't obvious. You can declare tips as income, no problem. The real cause of his discomfort is revealed later in the post: Personally I believe that Bitcoin is a terrible currency ... If you have a completely broken piece of country then I can imagine that you are suspicious of regulation and this sort of thing, but for me regulation is what keeps my world running and working. Also, Bitcoin for me feels like a cult. The vocal people in the community seem like they don't actually care about Bitcoin, but they want to see it succeed so that their "investment" makes a profit So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. I do not consider myself particularly libertarian, though I do use and work on Bitcoin. Regardless, this doesn't seem like a great set of arguments. Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin.

pdonis 12y ago
> The author seems to believe he cannot accept tips, because of tax and regulation That's not what he said. He said that he doesn't want to deal with a system for accepting tips if the cost to him of the system (not just in money but in time and effort) is greater than the benefit. He mentioned two tipping systems (gratipay and bountysource) that, to him, don't have this problem.
the_mitsuhiko 12y ago
> author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. JFTR: "accepting tips" for software is something that is not at all straightforward. The way bountysource and others get around that is through invoices once a large enough amount has accumulated. I have no idea how that works in other countries. Gratipay/bountysource solve this problem, no bitcoin service I have seen does. > Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin. I think you misunderstand something there: I am pointing out why Bitcoin is something that does not solve problems for me and I doubt I am the only one. The premise of tip4commit is that it helps Open Source projects. It's not just not helping me, it's making my life more complicated. In fact, right now, pretty much anything that has bitcoin involved makes it harder for me.
- mike_hearn 12y ago
  Could you explain why accepting tips is so complicated? What specific law means you cannot do it? Let me put this another way. If your friends give you money for your birthday, do you give it back to them and tell them you can't accept their gift because of tax and regulation? I doubt it! You may well declare the gifts on your tax return if it's big enough to bother with, but if Austria makes it hard to accept cash gifts of small amounts then something is seriously wrong with Austrian law and this is not something to be defended.
  - geofft 12y ago
    Even supposing something was seriously wrong with Austrian law, it's a little presumptuous to expect everyone affected to try to fight that. Maybe they're already under careful watch by the national tax agency after getting audited because of some honest mistake the past year. Maybe they're under probation under a law you and I would call unjust, but triggering further law-enforcement attention lands them in jail regardless of whether they were justified. (This scenario happens a lot in America, incidentally.) If someone says "I want to stay out of this", that should be their right.
djur 12y ago
This may have changed in the last 24 hours, but last I checked tip4commit's opt-out model is "get stuffed". The original controversy was over their refusal to remove projects from the site on request. I agree that Bitcoin is more or less irrelevant to the controversy, but like the OP says, the tip4commit defenders seem to have intentionally made it a pro/anti-Bitcoin conflict. Bitcoin advocates were mobilized to support the site.
- cbsmith 12y ago
  > I agree that Bitcoin is more or less irrelevant to the controversy It's relevant insofar that tip4commit likely couldn't get away with what it was doing without it.
geofft 12y ago
> The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. I'm in the US, not Austria, but from what little I've seen of even the US's legal and tax system, doing something with money that you don't fully understand is a risk. I am glad that there are people who are willing to take that risk in the name of improving society, and pioneer the use of Bitcoin and other alternative currencies. But nobody should be obligated to take that risk if they don't want to. I would be completely unsurprised if some emergent behavior between the US tax code and other laws meant that if you were merely aware of people accepting tips on your behalf using your name, even if you didn't ask them to, there are tax or legal obligations. I would be completely unsurprised if the law says, if you ask them to stop and they don't, you're _obligated_ to initiate legal process to make them stop. I don't think the law says that, but it's certainly way less crazy than lots of funny corners of US tax and commerce law. I would also be completely unsurprised if US tax code got complicated when you're accepting Bitcoin as payment. I'm dimly aware that the IRS or FinCEN or someone issued guidance recently that Bitcoin doesn't count as a currency but instead counts as a something-else... and not being a cryptocurrency user, I haven't bothered to learn what that something-else is and how you're supposed to report taxes on it. If someone is willing to figure out how the law works, or pay their lawyer to, more power to them. But nobody should be _obligated_ to.
pron 12y ago
> So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. The only (or at least, the main) argument we ever hear in favor of Bitcoin is that it's unregulated, and therefore it's liked by people who dislike regulation. Why, then, is it surprising or illogical for someone to dislike Bitcoin because they're in favor of regulation? Being in favor, or against, regulation is a matter of personal political opinion, and that, in turn, shapes one's opinion of Bitcoin. This argument makes just as much sense as those for Bitcoin.
- vegedor 12y ago
  The way I read it, the GP mocks the idea that a self-regulated system would be unregulated. AFAICT It's at least regulated by convention with regards to the pay out for mining.
cbsmith 12y ago
> The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. I should think that would be pretty obvious. Go ahead and try collecting regular currency for a charity of your choice without ever getting sign off from that charity and only ever giving them the proceeds if they ask. It will end very badly for you. > You can declare tips as income, no problem. No, there are a lot of potential problems that stem from this. In particular, it raises lots of flags about whether those tips are accurate, whether it is some form of money laundering, and whether they are really tips or something more nefarious. Unlike in the US, in a lot of other 1st world countries, handling taxes is incredibly straightforward (less than an hour of your time a year and zero risk of liability), but once you throw tips in to the equation now it's as difficult as it is for many people in the US. > So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad. No, he's pointing out that its vocal fans have a distorted perspective and often don't really buy in to its virtues... but those problems are not why Bitcoin is a terrible currency.
beagle3 12y ago
It is very far from simple anywhere, especially in the US: It isn't perfectly clear if you should treat bitcoins as commodity or currency. See [0] for more details. As a general rule, if anyone tells me "but taxes aren't complicated" or "but what's the complication", I know they are talking from ideals and not experience. The Federal US tax code, last time I looked at it (2009) was over 71,000 pages (add a few more thousands per state). It doesn't get shorter with time. Of those, "only" 20,000 or so apply to every individual (not the same 20,000). Other countries are better, but the shortest country tax code I've had the pleasure (?) of dealing with was only 4,000 pages of printed text. Intrastate/intracountry transactions are usually complicated, but somewhat tractable. Cross-border transactions are usually ill-specified, can be classified in multitude of ways all technically legal - and yet, if the tax authorities in either country things you've done it wrong, you are assumed guilty until proven innocent. Anyone who is not scared of the tax code has not had to wrestle it. You may win some battles after working hard. But you never want to go into this war. [0] https://en.bitcoin.it/wiki/Tax_compliance https://en.bitcoin.it/wiki/Tax_compliance

lnanek2 12y ago

I don't have any use for tip4commit, personally, and couldn't care less if it succeeds either way. I did read the GitHub site, though, and your case 1) is incorrect. They return the money if it isn't claimed.

japhyr 12y ago
Are you sure about that? They said they return it to "the project", but that in no way guarantees that the money will go to any developer. The tip4commit people are clearly putting growth of their product above everything else, and that's generously assuming honorable intentions on their part. I couldn't see any clear strategy for getting money back to the original donors if a developer or project does not end up claiming the donation.

tzs 12y ago

In addition to tax issues, I'd also worry at least a bit about whether or not accepting money for your software might affect warranty disclaimers. I would not be surprised if in some jurisdictions it is harder for a commercial project to disclaim warranties, and for accepting money to cause a project to be classified as commercial.