I'm mad as hell. And I have the IRS to thank for it. Either they are utterly incompetent or they are the worst kind of creeps and thugs. I'm inclined to think the latter, but I suppose we can give them the benefit of the doubt on the former.
So, since they've decided that bitcoin is property, not a legitimate currency, every time one uses it as a consumer, every cup of coffee, restaurant meal, book, piece of computer hardware, you buy with it, you have to pay capital gains tax. In other words, bitcoin has been elevated to the prestigious position of gold: scary competitor to whom we will give no quarter.
That's about the shape of things. In a world where governments suppress and make a mockery of free markets through their coercive enforcement of fiat currency, nothing less should have been expected.
What does this mean for bitcoin? Well, the whole situation just got much more interesting. I'm amused by those in the bitcoin community I hear talking up the need to lobby the IRS for a policy change. Such an attitude strikes me as peculiarly blind to the realities of why nation states are so determined to exclude competitors with their fiat currency.
For me, the writing has always been on the wall for some time (and I've been perplexed by those who can't or won't read it). Bitcoin can only thrive as a competitor to fiat currencies. It can only provide such competition, however, outside the good graces of the nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you're referring to peaceful people voluntarily exchanging goods and services among themselves, while causing no trespass upon the life or liberty of anyone else...if that's what you mean by "criminals." Yes, I guess so.
Do remember though, that the real criminals, the ones who use violence and extortion to get their way - the narcotics cartels, the human traffickers, the professional murderers - have long used the U.S. dollar as their coin of the realm. Whose money is the real bank roll of gangsters?
No, this is all just about criminalizing people who want to choose their own currency. I would say "shame on you IRS", but you can't shame conscienceless thugs, can you? And it's with just such people that we are dealing.
So, since they've decided that bitcoin is property, not a legitimate currency, every time one uses it as a consumer, every cup of coffee, restaurant meal, book, piece of computer hardware, you buy with it, you have to pay capital gains tax. In other words, bitcoin has been elevated to the prestigious position of gold: scary competitor to whom we will give no quarter.
That's about the shape of things. In a world where governments suppress and make a mockery of free markets through their coercive enforcement of fiat currency, nothing less should have been expected.
What does this mean for bitcoin? Well, the whole situation just got much more interesting. I'm amused by those in the bitcoin community I hear talking up the need to lobby the IRS for a policy change. Such an attitude strikes me as peculiarly blind to the realities of why nation states are so determined to exclude competitors with their fiat currency.
For me, the writing has always been on the wall for some time (and I've been perplexed by those who can't or won't read it). Bitcoin can only thrive as a competitor to fiat currencies. It can only provide such competition, however, outside the good graces of the nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you're referring to peaceful people voluntarily exchanging goods and services among themselves, while causing no trespass upon the life or liberty of anyone else...if that's what you mean by "criminals." Yes, I guess so.
Do remember though, that the real criminals, the ones who use violence and extortion to get their way - the narcotics cartels, the human traffickers, the professional murderers - have long used the U.S. dollar as their coin of the realm. Whose money is the real bank roll of gangsters?
No, this is all just about criminalizing people who want to choose their own currency. I would say "shame on you IRS", but you can't shame conscienceless thugs, can you? And it's with just such people that we are dealing.
About the Author:
Wallace Eddington is a leading writer on financial and monetary events and a regular contributor to the Bitcoin Profit Calculator blog, where he's written about the Mt. Gox fiasco and other hot bitcoin topics. Check out his hard hitting piece on inflation at the Fiat Currency Review.
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