Topic: Be careful what you wish for, it might happen - page 3. (Read 887 times)

If we were to have a Decentralized society, I don't think that would be a good intention or system in every country to do this thing just to avoid paying taxes. Because if there is no tax to be levied by the government of each country, it is likely that such a country will fall further into poverty and its economy will also collapse. Then the saying is true that the rich get richer and the poor get poorer.


That's correct, cryptocurrency is not design for that matter, isntead it was design to help the community and also the economy
of each government of the country that will adopt the system of the cryptocurrency, besides, not all crypto's also are unregulated,
instead, there are some regulated too that exist in this business industry.

The government only thinks about their profit, because they can't fully regulate bitcoin. Bitcoin is decentralized, not centralized and not regulated by anyone. What the government can only do is provide regulations in the form of prohibitions or only allowed as commodity assets and many other regulations, depending on the government.
crypto does continue to grow and nothing will stop it, even in a state of inflation or in a state of war though.

The government is currently applying taxes to crypto users, because the government is aware that crypto users have started to multiply and the transactions in crypto are very large. Some major exchanges even get a lot of action in the form of tax actions that must be paid and if they don't pay they will be blocked.

But despite all the counter-attacks that the government does like banning, we could still see that crypto is growing. I'd see that nobody can stop this. The only thing they can do is to give support and asking holders to pay their taxes can be easy if there is a good relationship between them. The problem with the government is just abruptly implementing rules that are not fair enough and not considerate to the community, they are just selfish to think about their own.

And not surprising that most government doesnt really like its existence on the first place because as you do mention on where they cant really able to execute those things if ever that everything is really that having some transparency where those corruption and misused of funds would really be that known or obvious and also we do know that government doesnt really like on things that they cant able
to control thats why its not really surprising that they would really be going against it on the first place.

There might be some considerations on some places in the world but of course it would really be still following on regulated procedure or arrangement which speaking of total decentralization with a mix
of regulation on some particular areas which do really sucks but not really that bad.

Sadly many wouldn't want that to happen because they wouldn't be able to do their usual fouls like favouritism, the corruption they called networking and cheating. I see nothing wrong with being taxed from your income, the only problem I see is how these taxes are allocated, spent, and get stolen by some groups. However, I think decentralization will solve this because you can't manipulate a public ledger that is visible to everyone, you see why decentralization will be massively rejected.

Indeed I also don’t think it’s intention of Bitcoin to avoid taxes but it is created to remove central authority over the payment system. Removing authority implies a more direct contact between people interacting financially. Therefore an impact (applied by central organs) on tax collection seems logic.

It did happen already because cryptos are finally there but I think cryptos are not invented for this (to dodge the tax system) but there might be other reasons. Many people especially those who want to avoid tax and as well as those criminals who want to launder money are now being involved in cryptos. Not to be selfish but sometimes it's good to not pay tax than the tax will just go on the wrong hands because in our modern world today, corruption are now very rampant.

There are those who are not corrupt but the other problem is the lazy people that only depend on the government to provide their basic needs. It's a kind of abusive.

If they just printed money in emergencies like this, it would be fine and justified. The real problem is that entire nation states are dependent on close to 0 interest rates and would go bankrupt if some normality would come back and higher rates came back. The complete reliance on printed money is dangerous in my opinion and requires central planning, which we know cant work in the long term.

Also its questionable that private institutions like banks have been given to power to basically create money out of nowhere, with fractional reserving and just 1% in minimum reserve requirements. In the beginning this concept might generate more economic growth, but what were seeing now is that the purchasing power of the population is lowering trough constant devaluation of money, and that in times where production is low, inflation creeps in too, the effects are catastrophic, we are going into a living cost crisis.

This system cant be fixed in itself anymore, that is the problem. It always requires more planning and policies, instead of being sustainable in itself.

Bitcoin is just decentralized in itself, to ensure its properties will stay like it is and that it cant be controlled by a minority of people, for money this is huge.

I get your concern. I think full decentralization will fail in practice, it was here before centralization and got replaced for a reason. We need police, hospitals, firefighters, courts etc. Who will protect an average persons property? Who will build roads and infrastructure? Who will pick you up in an accident? Who will treat you when youre sick? Who will help you if youre out of a job? There is so many things Bitcoin cant solve, its just money. States formed for a reason, many people might be frustrated currently, but having no social security net is even more damaging. And lawlessness wont ever work or come back on a big scale. There just needs to be some checks on the state again and we need to push bad monetary policy and central planning a little back, only decentralized money can compete against states. The government will just have to compete against it, this is not a replacement question, this dynamic comes in handy more than ever now.

Maybe my view is different here, because in the country i live you can get the same doctors and universities any rich person can afford, at barely any cost. There is no difference in the quality/ access of the service no matter if youre rich or poor. This might differ from country to country, but my concern is that when theres no real rules here, then poorer people might get priced out of healthcare and education, this is catastrophic for society. Getting a degree or going to a hospital shouldnt mean high debts like in the U.S.

Rich people can always afford better teachers and doctors privately, the state should offer the best quality schools and hospitals they can for everyone, this is the best case scenario for a society in my opinion. Rich people just use private insurances here to get out of public insurances, as it can save them some money, but then when theyre actually sick it becomes expensive and was pointless.

It's great you have a great Government there in the UK but the thing is each country has its own leaders.  Often times the supposed to be weak-protecting government chooses to protect those who amassed great wealth.  One of example is the labor contractual system where employees are changed or have to renew every 5-6 months removing several benefits that a permanent employee has. Aside from that, my government is unable to solve the problem of telecom monopolization and electrical overcharge where the electric company charges their users for generation loss.  


It is rampant in a developing country, I am one of those who were declined by the banks due to not having a steady source of income (was a free agent before I found out about Bitcoin).

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Not if the transaction is done through P2P.

The government is finding ways to limit Bitcoin decentralization through third-party services but I think Government will not able to limit Bitcoin if we are to talk about its network procedure or on-chain transactions.

Bitcoin was created for sending money p2p without a third party and faster. Our traditional banking system isn't instant and has to use a third party. Although fiat transactions become faster now but not for all countries. Bitcoin stands here, its borderless currency can transfer within minutes without involving a third party. Just decentralization won't solve everything here. Everything won't be decentralized in a centralized world. There are advantages and disadvantages in both sides.

Yes, and that's why only a very small percentage of people can actually live with bitcoin decentralization. Meanwhile, we are still dealing with centralization and strict government regulations. KYC and tax fee are some of the things that keep us from completely have financial freedom with bitcoin especially for countries that don't legalize it as legal tender. In the end it's true as you said, the decentralization that bitcoin brings will be limited because we can't completely keep it decentralized when it comes to government and its regulations.

Inequality growth is indeed universal and will never change but I’m just afraid some of the inequalities will grow since blockchain is all about removing the middle man and this middle man (government) is currently protecting the weakest ones. Dont see them grasping opportunities now to be honest. Could be wrong its just a feeling.

Again I dont know anybody that ever had issues with a bank. Over here nobody is refused a bank and most transactions are free of charge. Instant payments in Europe : faster and cheaper compared to Bitcoin. Probably not similar in the whole world but thats my personal experience

These two things, in fact, work much better without the government. I agree that law and order can be kept by the state, but many people already choose private education. In fact education that is decentralized is much better for both teachers and students. Students get better teachers because they get to choose. Schools that are good get more students and more money, while worse shools get less money and cannot afford the best teachers. It creates a clear set of rules for everyone which says: you are the best teacher, you get the most money. For students, those who can afford the best teachers will get them, the rest will have to go with schools they can afford.

Nowadays in centralized school system you get mediocre schools with mediocre wages and the best teachers work in the private sector anyway.

It's very similar in healthcare. Public hospitals offer low wages, so they only allow young doctors to get more experience and once they're done they move to the private sector.

No good deed goes unpunished and all things have unintended consequences both good and bad but at some point you either make the move or you don't.  Therefore it is wise to properly examine things and do due diligence.  Decentralization can be positive and improve some things but unfettered decentralization would be anarchy and disastrous.  

I have been into supporting the government with taxes because it is the bread and butter of the government in funding its social responsibilities.  Having decentralization is a good thing because it gives more options to the people.


I can have a simple answer to this.  There are people who are declined by banks in having an account due to some personal validation and source of income reason. So these people can't do online transactions since they don't have any bank accounts to process their transactions.  With Bitcoin, these people are able to do online transactions without the need for banks.  So basically, Bitcoin brings convenience to people.  Bitcoin is able to bridge the gap created by banks between unbanked people and online purchases, and online remittances.

the problem with society is this

when it comes to helping those in need. the government take the most basic low number they can find as the survival line. and give that as social security payments/unemployment allowance.

then they set another slightly higher number as the minimum wage..
but both of these are way below the 'cost of living' true number

so even having a job at min wage isnt going to cut it. and instead of fighting for an increase of minimum wage some people argue that the social security is too high..


the problem is not the poor. its that min wage is not at living cost!!!. so blame the low min wage. not the social security
..
what could be done because technology allows it...
is an actual measure.
EG they say 5 fruit-veg a day, X amount of protein,fat sugar... actually cost out a real healthy diet, instead of the meanial rice and instant mash with beans budget diet. the actual average electricity bill. not the cheapest ineffective energy supplier.
the actual housing costs not the government supplemented/discounted housing cost.
actually work out a true living cost and make that the minimum wage.
 where by the social security is ofcourse below that. but there is no crying about minimum wage being like unemployment. but instead a fair minimum wage. that people want to work to get(for those that can)

the technology is there to codify all of this and automate it. like taking values from all retailers and auditing them to certify prices and then calculate fair min incomes for different 'laws'(min wage/social security) to be put into code and voted in by citizens. (no politicians required)

where for instance how to get social security funded, it can be less of a "tax regime". but more of a system of voluntary contributions. where some people can 'stake' the coin(already earned savings) and where by a certain amount of PROFIT of the stake  then funds the basic social securities and thats where 'money creation(via staking)' goes towards instead of current system where money creation is debt/loans.
so where the staking system (money creation) funds social security. and people earn savings interest by staking too.

completely separate from their real life employment earnings of coins..


all without a politician decision maker. and without blaming the poor

Now you’re starting to ask the right questions.

We have to look further than just buyer/ seller related issues, this is about monetary system design. Current payment methods are less relevant, as we have two competing currencies in circulation, Fiat(soft money) and Bitcoin(hard money), the payment stuff comes later. If we follow Greshams law, soft money drives out hard money from circulation, as people would rather keep hold onto something more valuable, than to use it daily. In the initial phase Fiat will still be the primary payment method, this doesn’t matter for Bitcoin now.

The first practical issue is Store of Value related. The money supply from last the financial crisis(2008) since now already increased by 182%, sure this isn’t direct inflation, but debasement still has long term impacts. Now you have already correctly analysed that it is necessary to hedge against this with long term investments. But we also gotta ask ourselves is this option open to everyone and can this economical model work forever? If the answer is no, we might consider, if it would make sense to invest something that could be a fix to the current issues. They are:

• Loss of purchasing power.
• Fragility of the banking sector.
• Fraudulent activities by central authorities.
• Failing fiat system that needs more and more authoritarianism to keep alive.
• Risk of censorship and confiscation.
• Lowered trust in financial institutions.

Also hedging against inflation doesn’t solve the problem of inflation in the first place. The whole approach has ever been let’s debase our currency to fix all problems, yet there’s no evidence of any betterment being the result of this approach. It’s the opposite actually.

To make it even more clear, let’s just compare different forms of money with the common criteria:

Most saleable good(easiness of tradebility with a good) - this changes over time.

• 1. Fiat
• 2. Bitcoin
• 3. Gold

Store of value - Scarcity(Supply relative to other goods), Durability(No loss in functionality with repeated use)

• 1. Bitcoin (limited; durable)
• 2. Gold (unlimited, but scarce; durable)
• 3. Fiat (unlimited, increasing rapidly; not durable, as debt-based money creation makes it a weaker form of money over time, with repeated use)

Medium of Exchange -

Acceptability(Used and accepted by others)

• 1. Fiat(most accepted and used)
• 2. Bitcoin(gaining more and more popularity and usage, but less accepted)
• 3. Gold(accepted in special locations, probably only usable by overpaying in daily commerce currently)

Portability(Easily moveable across distances)

• 1.Bitcoin(extremly easy and fast, can move faster than the person itself, least costly solution for high amounts today, most secure option)
• 2. Fiat(Banking system is slow + costly, and even slower + costlier over long distances; No guaranteed security, because there’s always a counterparty risk(No matter if you use Credit Cards, Paypal or wire) or transportation risk/ cost when transporting physical bills; Also makes currency conversion necessary over longer distances)
• 3. Gold(terribly hard, expensive and dangerous to transport)

Unit of Account -

Divisibility(Easily dividable into smaller units)

• 1. Bitcoin(Easy, 8 decimal places)
• 2. Fiat(Good, 2 decimal places)
• 3. Gold(terrible, needs a lot of work)

Fungibility(1 unit is the same as the other)

• 1. Bitcoin(All units are the same, altough some people argue that the history of coins can affect its desirability for others, cant be counterfeited, can easily be verified)
• 2. Fiat(Bills are the same, but higher ones arent accepted everywhere, can be counterfeited, less relevant for digital fiat, but harder to verify overall)
• 3. Gold(theres different coins/ bars with different degrees of desirability, also its not easy to verify real gold for everyone)

The only outlook we got from central banks to repair fiat would be to introduce digital currencies, but we all know this whole construct needs more and more complexity and control to keep functioning.

This is contradicting the basic task of money: enabling a system of indirect trade. Which of these 3 currencies can potentially do it the best, where would free trade flourish the most? And thus benefit society, because we can all agree that the well-being of society is in decline everywhere, it’s just obvious. We’re discussing social reforms, without trying to get to the root of problem. Fiat robbed money it’s beneficial function for most people, otherwise the opposite trend would be true, and we would see financial well-being in societies rise, the technological progress is there. But it’s just not the case.

Bitcoin is a money that is superior in all aspects listed above, except acceptability, but this is already on an upwards trend. We have the first money that works without a middleman. Where you can’t actually change the properties listed above easily. Where transactions can’t be censored, where wealth can’t be confiscated. Which money would benefit society the most, if we put our political biases aside and look at this from a neutral economical perspective.

To me the answer is obvious.

There is no current solution by fiat economists to protect an average individual from inflation, bank failures, confiscation risks, loosing your money with absolute certainty. Bitcoin is a unique solution to whole problem, so people simply choose this, instead of going the more inefficient route to hedge into other assets that don’t have the potential to fix the system.

You have a point on the taxation per earnings but it should be like a fixed percentage for everybody. If you would overdo it the highest class would look for alternatives.

The unemployment is a bit more difficult. Over here unemployment support is 1500-1600€ while minimum wage is like 1800€. The difference is just not worth it. Lots of people are doing some cash jobs on top to end up much higher. According to me working should be much more rewarded. We have enough jobs they dont get filled. Disclaimer : im not targetting people not able to work…

I think that progressive taxation and universal basic income are great ideas. If someone is just getting by, taxes should be low for this person because the money they give to the state can make a difference for them. If people are quite well-off, they should pay more because they already live a comfortable life, and it's not like they don't use public services (they use roads, they probably used public education, medicine or something like that, they rely on the safety and judicial system provided by the state etc.). If  a person is very rich, then giving more to society makes even more sense. This person won't really benefit from this money, but there are those who will. And there are services that will benefit as well. Also, chances are, this person is either wealthy because of some family legacy stuff (which also leads to better opportunities because of people you meet through family that can help you get rich) or because of paving their own way in a certain community (which means that this community had people who recognized their talent, potential or appreciated their product or whatever, and that also justifies giving back). Not to mention the moral commitment to help those in need, those who were less fortunate. And unemployment is usually NOT because of a good social support system; it's when people WANT to work, but the job market doesn't have enough demand for them to work.