"Previous attempts at parallel online digital currencies, like e-Gold and Liberty Reserve, were shut down by the US government before even making it to $10 billion in market capitalization. Bitcoin now has a market cap north of $1 trillion."
I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples? Forgive my naive question as I'm not into crypto, but is it even technically possible for them to shut down Bitcoin if they wanted to? I lived through the P2P file sharing era in the 2000s where ISPs were forced to block access to various things at the behest of the RIAA/MPAA, so it seems like they could just go after the P2P blockchain in similar ways if they cared. No consensus; no Bitcoin, yeah?
If that were the case then I also wouldn't trust Tor to provide any privacy from the US government considering NRL created it. My assumption is that reality is probably somewhere in the middle, where the existence of Bitcoin doesn't harm the government's interests too much while also convincing the occasional egotistical giraffe that it would be safe to stick their neck out.
If it turned out that BTC was a primary vector of money laundering and means to pay for illegal stuff, the US could declare it illegal which would crash it instantly. EU and China probably and everyone else probably would as well if that were the case, and then it would be wiped out.
Specific kinds of regulations might kill it as well - though most regulations probably validate it, there could be certain things that make it impossible to survive. Maybe some kind of regulation regarding asset size + value certification, or something about the security of the BTC numbers. Or possibly something about disclosure - since BTC allows you to keep 10 Billion in your drawer at home ... it creates a problem similar to offshore financing.
Musk was maybe smart to buy BTC because he's the kind of guy who can give it hype and 'cred' ... but either 1) he doesn't realize what it actually is and is unknowingly pushing Ponzi or 2) he knows what he's doing and happy to take money from dupes and rubes. I suggest it's the former, as everything Musk says leads me to believe he has never opened a finance text. The paradoxes of great leader: their giant blind spots outside the realms of their interest. Gates, Musk, Jobs, Bezos, Soros ... they can be big visionary in some areas and insufferable fools in others.
The worst thing the US government would do is regulate tainted Bitcoin by keeping a database of all Bitcoin that were connected to a specific crime. If your Bitcoins randomly become worthless because the US government prevents trading of tainted Bitcoin it could easily cause a long term price decline as more and more crimes are being uncovered and more Bitcoin become tainted. A global agreement with the EU and China could strengthen the potency of this database.
The Nigerian central bank banned crypto and now bitcoin is twice the price. All the US banning crypto will do is make the United States fall even further behind in the space. Also banning it cause of crime normal money is used for crime why isn’t that banned. If they are doing it for a power thing then it’s a disgusting display of rights being denied.
"All the US banning crypto will do is make the United States fall even further behind in the space"
The US will fall further behind in fraud, ponzi schemes, tax avoidance, and wasted electricity?
And so ...
Cryptos have demonstrated zero value to society as of yet, and there are some drawbacks, least of which is wasted electricity.
If they ever become useful as a medium of exchange, all the same regulatory rules have to apply, ergo, the frictionless hope is gone, in other words, they are pointless, and serve no purpose other than as a distraction.
You'd think that, wouldn't you, but surprisingly doing payment processing doesn't necessarily involve any fundamental understanding of the nature of currency, how it's backed, Fed operations, how they related to the Treasury.
Elon makes a lot of questionable statements about BTC and currency.
A few weeks ago:
"Having some bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company ... When fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is 'almost.'"
His concerns about the funny money nature of the Fed etc. are reasonable - no doubt, but at the same time, almost everything he says about BTC undermines his credibility on those things.
BTC is not a currency or a 'store of value' just because a bunch of people say it is. It's just list of numbers people are trading because they want to. The Fed has problems, but BTC is a populist fiction.
>I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples?
>is it even technically possible for them to shut down Bitcoin if they wanted to?
You've almost answered your own question there. It's not more difficult to shut down due to a change in government behavior, it's difficult to shut down because it's highly decentralized, unlike earlier digital currencies
"But the reality is Bitcoin is a political project that threatens to fundamentally disrupt the Davos-led economic system, with everyone from Janet Yellen to Christine Lagarde expressing fear about its rise and demanding it be regulated."
Enough with the inanity.
BTC's are numbers traded between speculators for no reason other than speculation.
Aside from the potential for money laundering, just ignore it, it's irrelevant.
It's power is it's own PR, generated through ever more ridiculous claims to valuation.
It certainly helps Bitcoin that the press makes no effort to contextualize let alone dissect the crude dimensions by which the success of Bitcoin is measured, namely price and market cap.
Bitcoin's market cap is like a building erected specifically to claim an astonishing height record for skyscrapers, but in which the base of the structure consists of a dozen or so real floors topped by a constantly unspooling wire antenna held aloft by a weather balloon 5km up.
This is what worries me about Bitcoin. Right now total exposure to Bitcoin is a tiny fraction of the exposure to derivatives in 2008, but that could change as Bitcoin mania grows. Eventually a sudden drop in the price of Bitcoin could trigger a general economic collapse like in 2008
True but most derivatives are based on an asset of some sort with real world value. It is not speculation based solely on the speculation that others will continue to speculate.
Bitcoin is no threat to government or fiat currency. All government has to do to stop Bitcoin is --- nothing.
Simply wait and allow reality to sink in. Under no circumstances should government move to regulate the Bitcoin "market". Nor should they allow government insurance programs (FDIC, NCUA) to be applied to Bitcoin in any way.
Regulation would do nothing but add respect and credibility --- things that are otherwise sorely lacking.
This is not to say that the fraud that is occurring with so called "stable coins" should not be prosecuted. Exposing this will directly impact the Bitcoin market but it is not regulating the market.
My understanding is that it is publicly verifiable that Dai is over-collateralized , and positions can be closed or whatever it is called without requiring any organization to do anything.
I don’t know what smaller details there might be about the oracle information or other outside input things there are that people might complain about, but my impression is that it is a sound setup? The reason I say “impression” is because I’m not familiar with the details. I think all the details are publicly verifiable though.
Would an attack on stablecoins indirectly cause the value of Bitcoin to go down? The government could even turn itself into the good guy by letting people cash out at a favorable rate once they go bust.
The fact that you said that about DAI shows you don't know enough about the ecosystem and have just read articles about tether then drawn a conclusion about every single stablecoin
I drew no conclusion. I said, "if it can be shown ...".
It's true that I haven't studied DAI --- because I haven't felt any need to. I know how to buy currency that is every bit as stable as DAI and much more widely accepted and easily redeemable --- just buy USD.
Have you studied DAI? Are you sure that their algorithmic trading works the way they claim it does? How did you verify this?
Most "stablecoins" are built on trust of some sort at some level. Until someone audits them, you really have no idea if that trust is warranted.
Who knows how long it will take for people to realize that fraud is being openly conducted in the Bitcoin market.
Example: Famous wealthy entrepreneur loudly and publicly announces a large purchase of bitcoin. The price of bitcoin jumps 20% as a result. Famous wealthy entrepreneur sells bitcoin and realizes a 20% gain.
This is called a "pump and dump" scam and if done in any "regulated" market, famous wealthy entrepreneur would be in legal trouble.
Regulating Bitcoin mining is definitively something that is doable, but Bitcoin itself? Completely fruitless unless you can pit Bitcoin users against each other.
I'm not sure what country you're referring to. In most jurisdictions I'm familiar with, if you exchange cash currencies and buy something (classic example; a cup of coffee), you are not expected to enumerate that transaction in your tax statement and calculate acquisition cost and liquidation P&L for each individual transactions.
For bitcoin, you do (again, highly depending on country).
This is the difference between classifying it as an asset or a currency. You may still be liable for taxes on your forex trading, but it's not the same kind of capital gains as for other asset classes.
In every place with an income tax, there are rules for taxing income. If you made money, don't expect to think you're so clever that the IRS or equivalent will say "Well, you got us! Enjoy your income without paying taxes."
I'll give you an example that pre-dates bitcoin:
There are U.S. Gold coins that have denominations, for example $50
People have tried to pay others with these coins arguing that the face value is $50, so the income tax should be $50, and not the $1500 or whatever an ounce of gold was worth at the time. Guess what? They didn't get away with it. See:
The comment you’re replying to is not implying that profits should be exempt from taxes, or have them lowered.
It’s the mechanisms around capital gains tax (which is a particular kind of tax) compared to the requirements around profit made from appreciation of, say, fiat currencies. In fact, it’s completely different from income tax that you’re talking about.
It’s not so much about having to pay taxes but on what amounts and overhead in how reporting is made.
The hampering of growth (in terms of e.g. retail payments) and adoption is not due to the monetary cost of taxation, but on the mechanisms of them. Hell, you could keep or even increase the tax rate, but make it liable even just by holding cryptocurrency and having it appreciate (as opposed to “at liquidation”) and it would have the complete opposite effect.
Now if only more governments would accept taxes paid in bitcoin (:
Yeah, the problem is that you cannot spend your Bitcoin directly. If you could use your dollars to buy Bitcoin and then proceed to buy a pizza you wouldn't have to pay taxes.
In practice the only ones who are actively using their Bitcoin for consumer spending use a credit card where they deposit their cryptocurrency. Since the credit card company is automatically converting your cryptocurrency back to dollars you have to pay taxes on the gains.
Actually, no, that’s exactly the problem. Directly spending your bitcoin to buy a pizza would trigger a taxable event for the buyer. Enforcement of this might be weak so far, but technically that’s the case.
Why would they even need to stop it? They are already suing Tether and it will drop afterwards, because manipulation stopped.
History has already shown that during normal days, the value of BTC drops ( 20 k -> 4 k.). So it's definitely not a store of value or a replacement for gold.
I'm not really sure why Musk is promoting it though. Does he hate regulations this much ( = subjective) or does he really have some good opinions about it ? His tweets about it doesn't seem to prove anything except memes.
And risk? What risk? With crypto, there is no risk because the market is "unregulated". There are dozens (probably hundreds, maybe thousands) of "pump and dump" crypto scams operating openly on the internet. Here is one.
This article took a more holistic view than
BTC Endgame (https://news.ycombinator.com/item?id=26198210) but the author doesn't seem to have landed on a position only enumerated "maybe, maybe not"
I wonder if the different treatment is due to Bitcoin coming of age in the Obama era instead of the GWB era like those other examples? Forgive my naive question as I'm not into crypto, but is it even technically possible for them to shut down Bitcoin if they wanted to? I lived through the P2P file sharing era in the 2000s where ISPs were forced to block access to various things at the behest of the RIAA/MPAA, so it seems like they could just go after the P2P blockchain in similar ways if they cared. No consensus; no Bitcoin, yeah?
If that were the case then I also wouldn't trust Tor to provide any privacy from the US government considering NRL created it. My assumption is that reality is probably somewhere in the middle, where the existence of Bitcoin doesn't harm the government's interests too much while also convincing the occasional egotistical giraffe that it would be safe to stick their neck out.