Topic: Why Bitcoin is doomed to fail, and there's nothing you can do about it. - page 7. (Read 39330 times)

I know what the initial discussion was about. But there are other aspects to it, and I chose to discuss those that were not yet discussed, which you happily replied to and now you suggest we don't go on with that? Sure, I don't mind, we can quit right here, if you're out of arguments.

BTC is also backed by nothing, that's true, but BTC has no liabilities behind it, and that's a big difference. However, BTC has other disadvantages, which I won't mention here. I agree that governments wil try to tax trades done in BTC, no reason for them not to.

Thank goodness The Foundation is working on the problems.

Even though they may all be in prison soon like Charlie, they have sworn to continue their work on the problems.

This is a forum, not a battlefield. There is no sides to be take. Bitcoin is a software, not a weapon. I have no qualms about USD being the most utilized reserve currency as have no qualm for BTC being purely virtual. Both could disappear from existence and I would rest peacefully.

You are missing the point again. The initial discussion was about why trades with BTC can be taxed. You are going off the topic. Go back and read the posts again, locate yourself. BTC is also "backed by nothing". This fact alone do not hinders in any way the capacity of elected governments to collect tax from trades done with BTC.  

The United States of America constitute less than 5% of the people on this planet.  Who cares what the IRS consider barter to be?
They have a whole bunch of stupid rules, capital gains taxes, gift taxes, the list goes on.  The short answer is yes, they consider barter to be a 'taxable event'.  Where I live, we do not, nor do we have capital gains taxes or gift taxes.
Here is a link to the information you requested
http://www.irs.gov/taxtopics/tc420.html
"Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber exchanging plumbing services for the dental services of a dentist. You must include in gross income in the year of receipt the fair market value of goods or services received from bartering."

If you live on the same planet as me, reserve currency (the one that international trade is settled in) of this planet is still USD (although there's been steps by other countries in the last 2 years, especially China, to move away from USD), which is a fiat currency. We don't need to theorize here of what reserve currency can or cannot be. We're talking about what it is now. USD, which is a reserve currency of this planet, is fiat now, backed by nothing, unless you count aircraft carriers, of course.

By the way, I didn't say what you quote me to say, it was someone else. And I never said everyone will use BTC only to trade, because that'd be utter nonsense to say. Cryptos will have their place as supplementary currencies, but I don't believe they will ever be universally accepted, or even by any significant number of people.


For all practical purposes depreciation of reserve currency that other fiats are pegged to in one way or another = price inflation of goods, both in that reserve currency and pegged local fiats. Again, if you ever did groceries, especially over the past 2-3 years, you'd notice either higher prices or smaller packages per serving for the same price.

To my understanding, in the USA, the IRS considers barter a taxable event upon both parties to the barter transaction. If anyone has a citation proving otherwise, I'd certainly appreciate it if you'd share.

@Augusto Croppo
There is a war going on man.  Time to pick a side.
What was the quote from that buffoon George W. Bush?
"you're either with us, or against us"

LOL (Again).

No.

Reserve currency ≠ Fiat currency

This whole conversation started with you stating that "until Bitcoin is recognized legally as a currency, all trades done with Bitcoin are to be considered bartered trades, no tax applies" bullshit. Your doom's day scenario where all world economies will destabilize at the same time and everyone will suddenly only use only BTC to trade is far fetched. 


Depreciation of reserve currency ≠ Price inflation of goods

I can read it again for you.  I will even quote it for you.
"Virtual currency bitcoin has been recognized by the German Finance Ministry as a “unit of account”, meaning it is now legal tender and can be used for tax and trading purposes in the country."

Perhaps you do not know the meaning of "legal tender"

http://en.wikipedia.org/wiki/Legal_tender
"Legal tender is a medium of payment allowed by law or recognized by a legal system"

You cannot argue that it is not legal tender.  Private money = Legal Tender (is that clear enough for you).
Bitcoin is a medium of payment allowed by law and recognized by a legal system.  Bitcoin = Legal Tender
What you fail to understand is that it does not have to be a recognized foreign currency to be legal tender.  

For it to be a "currency" it would need to meet another criteria of being "Generally accepted and widely used", which it is not yet.

So far in history we've only witnessed cases of certain countries' currencies going to dustbin and resurrected with the loans from international financial organizations willing to provide those loans to countries, but what I am talking about in my previous post is the situation when the reserve currency itself is going to dustbin, who would back up other countries' currencies then? That's when your fiat wouldn't buy you a cabbage, actually you might even get your face punched for offering to pay in fiat for that cabbage

I don't even want to comment on your 'responsible central banks' phrase, it's too funny, I wouldn't know where to start.


It's actually been decades now that the reserve currency has been depreciating in real purchase power terms, since Nixon canceled the Bretton Woods system in 1971. Since then all currencies have been living on borrowed time.

When I said 'a few years', I meant the final accelerating hyperinflation period, when hyperflation becomes noticeable to everyone, who goes shopping for groceries.

More like a few decades.

LOL!

No.

Keep in mind, as more and more layers of service are necessary to optimize the utilization of BTC as payment method, more and more fees will be aggregated over one single transaction.


Paypal ≠ Private Money

You are completely confused. Read the article again.

Fiat money ≠ Private money


Yeah, I would like a situation like that, however you forgot one thing: diversity. What makes you think that a considerable number of business in many sectors of different economies will only choose BTC? Why not LTC? Or even DOGE? (ROFL!)

BTC is not the only "private money" available in the list of options that all business have. They could even do they own "private money".

Once a certain currency becomes "worthless", the responsible central banks under the respective government directions will issue another.Have you even been aware that countries like Brazil changed they fiat currency many times when one became "worthless"?

Thank you for spelling it out for me, your position was unclear and now it isn't.
Tell me, since you argue that bitcoin isn't money:
1. What is it
2. What about all the governments that have declared it is, in fact, money?

Well done New York.  I agree, Bitcoin will continue to be accepted by more merchants as time goes on.  One of the biggest motivators for merchants to adopt Bitcoin is the lower fees.  For those of you on this forum that do not own a business, you probably would not understand.  Most businesses will pay hundreds of dollars a month to have credit and debit card facilities, then there are additional fees if the customer purchases with a credit card.
Imagine this scenario, a customer walks into a retail store to buy a television for 1000 dollars.  He pays with his credit card, and the store loses 3.5% to VISA, that is 35 dollars (for one transaction). That is the Real World.
Now imagine the same man, in the same store, buying the same television, with Bitcoin.  The store pays 0.0001 BTC (10 cents) in fees.
@Augusto Croppo
That is why most businesses will want to accept Bitcoin and not money.  Because money costs them too much to accept.
It is almost 'Game Over' for cash and money in the traditional sense.

Overstock is using them now, Zynga is taking a good look at it, facebook is showing interest, Singapore seems to have paved the way for tax regulations which further confirms the perpetual survival of bitcoin, New York City has gotten its first Bitcoin ATM.

Basically, the way I see it, bitcoin will gradually be accepted as the norm. It will be an alternative payment method for your daily lives. The day will come when we can enter a shop or a supermarket, get our stuff, just place our phones  over the bitcoin payment processor counter, tap accept, bitcoin gets transferred to the company or to a payment processor company, say BitPay, you walk away with the purchases you have just bought.

When paypal first came out, no one thought much about it either. Now it's already a market leader.

Do not be so sure, Bitcoin has already been recognized as legal tender in Germany.  It cannot be considered a currency yet because by definition, as well as being a "medium of exchange", a currency must have "General acceptance or use".  Although we are not there yet, Bitcoin's acceptance will continue to grow.
Bitcoin Is Recognized As "Legal Tender" In Germany - http://www.zerohedge.com/node/477785
Bitcoins are now "legal tender" in germany - http://www.reddit.com/r/Bitcoin/comments/1r6716/
Bitcoin now LEGAL Currency in Germany - http://www.youtube.com/watch?v=okNhH7EoV6I
Bitcoin recognized by Germany - http://www.cnbc.com/id/100971898
Who said anything about tax evasion, there is no tax on bartered trades, if you want bartered trades to be a 'taxable event' you need to lobby your local politicians, and get the law changed.  Until then swapping Bitcoin for any other good is not a 'taxable event'.  Why do you think they are not taxing Bitcoin right now?

Wrong. BitPay is a merchant gateway, they provide tools for businesses to accept Bitcoin.  That does not mean they necessarily convert to fiat money.
Option 1: Forward to My Bitcoin Wallet
"BitPay will forward your bitcoins to your wallet address on file."
https://bitpay.com/bitcoin-direct-deposit
When I mentioned BitPay in my previous post I was trying to illustrate that the number of merchants that know about Bitcoin, and are prepared to accept Bitcoin is growing. When there are enough manufactures, wholesalers and retailers that accept Bitcoin, there will be no need to convert Bitcoin into fiat money.
If you read my previous post again, you will see I agreed with you.