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You're describing one trip through "the loop". Remember, the state will react to crypto growth too. There's a transitivity aspect to it. Ultimately taxes need

You're describing one trip through "the loop". Remember, the state will react to crypto growth too. There's a transitivity aspect to it. Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control. On the second trip through the loop, you have crypto which can be used for small (in a sense, black market) transactions and fiat which can be used to pay things like utility bills or buy stuff from companies which must accept fiat. Individuals will provide exchange services (buy iphones with crypto!) at their own risk, basically by subverting KYC with small transactions. [We are already here]. What's the nth trip through the loop? I'm personally not sure, but interested in your views.

themusicgod1 12y ago
> Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control. Ultimately global trade will have to occur in the global currency, and governments large and small will eventually get stomped on for accepting only their local currency if it subverts international consensus.
- GregorStocks 12y ago
  The current global currency is the US dollar. Most countries do not allow you to pay taxes in dollars. Why are Bitcoins different?
  - jasonisalive 12y ago
    The USD is a pretty lousy global currency. You can't exactly use it anywhere in any sort of transaction. I've only ever heard of a handful of places outside of the States where the local currency is terrible enough that local people prefer to hold and transact in USD over long periods of time. A true global currency would be one that you could use to buy practically anything, anywhere, whether it was a very large or very small transaction. Regardless, Bitcoin has several advantages. For one thing, you're not dependent upon continually obtaining a flow of paper notes from a foreign country that may lie halfway around the world. For another, you can divide Bitcoin to extremely small and precise quantities - the dollar on the other hand doesn't scale as well to economies where a penny may start to approach a significant individual unit of money. There are of course many other advantages of Bitcoin that make it attractive for people in many different countries to adopt. The fact that you can transmit and receive it to and from anywhere in the world, with the same certainty of transaction confirmation as cash in hand, without the need to either physically ship cash or rely on a network of physical cash shipment, is a pretty good one, especially as the world grows ever smaller. A final advantage would be that you are never hostage to the political dangers of a nation-state controlled currency (i.e. a small group of rich white men can at any point decide to devalue your savings, to the point of destruction, by printing an unlimited amount of the currency.)
narrator 12y ago
I am so glad people are starting to realize that what gives currency its values is that it, and only it, can be used to pay taxes, which are incurred in many transactions that don't even have to involve money.
- chriswarbo 12y ago
  At least in the UK[1], the value of currency is that it's backed by the courts, and therefore enforced by police: > Legal tender... means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. In other words, any transaction not involving fiat currency can be legally transformed into a transaction involving fiat currency (which makes "backed by gold/silver/whatever" currencies like Liberty Dollar[2] meaningless). Any transaction involving fiat currency which isn't settled can lead to legal punishment, ie. fines, prison, etc. Any punishment which isn't legal (eg. taking the gold which is 'rightfully yours') also leads to legal punishment, so there's no way to "escape" the system. [1] http://www.royalmint.com/aboutus/policies-and-guidelines/legal-tender-guidelines http://www.royalmint.com/aboutus/policies-and-guidelines/leg... [2] http://en.wikipedia.org/wiki/Liberty_Dollar http://en.wikipedia.org/wiki/Liberty_Dollar

themusicgod1 12y ago

> Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control. Ultimately global trade will have to occur in the global currency, and governments large and small will eventually get stomped on for accepting only their local currency if it subverts international consensus.

GregorStocks 12y ago
The current global currency is the US dollar. Most countries do not allow you to pay taxes in dollars. Why are Bitcoins different?
- jasonisalive 12y ago
  The USD is a pretty lousy global currency. You can't exactly use it anywhere in any sort of transaction. I've only ever heard of a handful of places outside of the States where the local currency is terrible enough that local people prefer to hold and transact in USD over long periods of time. A true global currency would be one that you could use to buy practically anything, anywhere, whether it was a very large or very small transaction. Regardless, Bitcoin has several advantages. For one thing, you're not dependent upon continually obtaining a flow of paper notes from a foreign country that may lie halfway around the world. For another, you can divide Bitcoin to extremely small and precise quantities - the dollar on the other hand doesn't scale as well to economies where a penny may start to approach a significant individual unit of money. There are of course many other advantages of Bitcoin that make it attractive for people in many different countries to adopt. The fact that you can transmit and receive it to and from anywhere in the world, with the same certainty of transaction confirmation as cash in hand, without the need to either physically ship cash or rely on a network of physical cash shipment, is a pretty good one, especially as the world grows ever smaller. A final advantage would be that you are never hostage to the political dangers of a nation-state controlled currency (i.e. a small group of rich white men can at any point decide to devalue your savings, to the point of destruction, by printing an unlimited amount of the currency.)

narrator 12y ago

I am so glad people are starting to realize that what gives currency its values is that it, and only it, can be used to pay taxes, which are incurred in many transactions that don't even have to involve money.

chriswarbo 12y ago
At least in the UK[1], the value of currency is that it's backed by the courts, and therefore enforced by police: > Legal tender... means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. In other words, any transaction not involving fiat currency can be legally transformed into a transaction involving fiat currency (which makes "backed by gold/silver/whatever" currencies like Liberty Dollar[2] meaningless). Any transaction involving fiat currency which isn't settled can lead to legal punishment, ie. fines, prison, etc. Any punishment which isn't legal (eg. taking the gold which is 'rightfully yours') also leads to legal punishment, so there's no way to "escape" the system. [1] http://www.royalmint.com/aboutus/policies-and-guidelines/legal-tender-guidelines http://www.royalmint.com/aboutus/policies-and-guidelines/leg... [2] http://en.wikipedia.org/wiki/Liberty_Dollar http://en.wikipedia.org/wiki/Liberty_Dollar