Pages:
Author

Topic: Why Bitcoin will collapse in price. - page 14. (Read 24607 times)

member
Activity: 98
Merit: 10
December 09, 2013, 06:54:50 AM
#70
What paper work are you talking about?
As of now, you just have to declare your capital gains at the end of the fiscal year; that at least in Italy.

I don't see why things should be made more complicated in the future only for bitcoins.

Regarding the banning of bitcoin tout court by a single country (already been discussed as just pointed out), I think that that would be a big mistake for the country that is making such a decision, because its businesses would be damaged internationally with respect to other businesses that can accept bitcoins.

Best regards,
ilpirata79

For merchants its complicated as they have to track the prices of bitcoin for each bitcoin they hold and sell. Why would a merchant want this? Again you keep assuming bitcoin will be adopted despite it being more complicated than government currency.

Why isnt gold used as money? Why is everybody using government money. Think about it. You are in love with bitcoin.
If this was the main stumbling block to failure for bitcoin I'm fairly certain someone would write some software for businesses that track your wallets and customer's BTC purchases to calculate this for you and then pre-fill whatever form you need at the end of whatever period this needs to be paid (yearly I'm assuming).

Remember one of the things that makes bitcoin such a leap forward is that it is programmable money.  As long as there is sufficient incentive these light technological hurdles will be coded for in due time.

Nobody will ever pay their taxes because there is too much paperwork... oh wait actually I do it all by myself with no training thanks to turbo tax every year.

I'm sorry but I think you'll have to hang your hat on something else other than paperwork as far as Bitcoin's doom.

If the transaction costs are not cheaper than digital gold we have no reason to accept bitcoin. Again capital gains paperwork is soft force to make bitcoin uncompetitive vs the dollar. If that does not work because economy of scale has reduced the cost of transacting in bitcoin government will find other methods. You are confusing my argument (government wants to protect its money monopoly) with one example of how it does that (taxing the medium of exchange).

Bitcoin already has problems with acceptance and transaction costs are the only plus factor. I explain it in more detail in this thread: https://bitcointalksearch.org/topic/can-bitcoin-replace-the-dollar-364207
sr. member
Activity: 410
Merit: 250
December 09, 2013, 06:52:49 AM
#69
Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?
No.
1) This is where you lost me.  The merchants don't have to hold onto the BTC for bitcoin to have been used as a medium of exchange.  The BTC purchaser exchanged their bitcoins for a product regardless of the actions of the merchant after the fact.

2) The idea is that at first most merchants immediately convert 100% to fiat currencies as hopefully more and more merchants adopt bitcoin (users of bitcoin driving the economy forward).  At some point enough players are accepting bitcoins for payment that some merchants can afford to keep some percentage of sales in BTC to then pay suppliers or for services necessary for their business (merchants driving the economy forward).  This then cycles and continues to grow the bitcoin economy in a positive re-inforcement loop that ideally ends with majority of participants only converting small percentages to fiat or none at all.  It all has to start where we are now though.

Not to say that things will actually evolve like that, nobody knows how far this new economy will grow.  However I think it's a bit myopic to completely rule out fiat convert merchant adoption today as any sort of potential progress and conclude it's game over.  This is the first part of the process, we'll know if it works or not with time.

1) If you sold your bitcoin for dollars and used dollars to buy from the merchant would you qualify bitcoin as a media of exchange? Of course not. Now if the merchant does it for you because he does not want your bitcoins but dollars its the same scenario.

The merchant accepts bitcoin not because he wants bitcoin (again he dumps for dollars) but because he knows that bitcoiners are wealthy customers that would like to transact in bitcoin and that there is little competition for these customers at the moment.

The dumping of bitcoins by the merchant creates transaction costs (spread) that makes transacting in bitcoins expense.
Except that it's NOT the same scenario.  In one scenario there is a merchant that a bitcoin holder can buy from using bitcoins (thereby increasing the perceived value of holding bitcoins), in the other there isn't.  More merchants accepting bitcoin should attract more bitcoin users, thus likely convincing more merchants to accept bitcoins thus potentially leading to the positive reinforcement cycle I've laid out in my last comment.

On top of that coinbase converts first million in sales for free so no "spread".  From what I've seen even the other services that charge do it for fees lower than CC processors anyway.

2) No its not a gradual thing. You either hold onto bitcoin or you dont. Again the merchant can profit by having wealthy customers with no competition. He has not endorsed the use of bitcoin as currency unless he holds onto it.

There is a huge psychological hurdle to accept bitcoin, because bitcoin itself is not valuable. I explain this in more detail in this thread https://bitcointalksearch.org/topic/can-bitcoin-replace-the-dollar-364207.

Of course it's a gradual thing.  It's taken years to go from 0 merchant adoption to where we are now.  Are you telling me that assuming continued growth and popularity of bitcoin people won't continue to feel more and more comfortable holding on to it?  It's what has been happening so far.  Some merchants didn't accept or hold bitcoins that do now, it's only a question of whether this trend continues or not.

Also the decision to convert sales to fiat or not is not a binary one.  You can set a sliding scale of whatever percentage you want converted for each transaction.
sr. member
Activity: 410
Merit: 250
December 09, 2013, 06:41:00 AM
#68
What paper work are you talking about?
As of now, you just have to declare your capital gains at the end of the fiscal year; that at least in Italy.

I don't see why things should be made more complicated in the future only for bitcoins.

Regarding the banning of bitcoin tout court by a single country (already been discussed as just pointed out), I think that that would be a big mistake for the country that is making such a decision, because its businesses would be damaged internationally with respect to other businesses that can accept bitcoins.

Best regards,
ilpirata79

For merchants its complicated as they have to track the prices of bitcoin for each bitcoin they hold and sell. Why would a merchant want this? Again you keep assuming bitcoin will be adopted despite it being more complicated than government currency.

Why isnt gold used as money? Why is everybody using government money. Think about it. You are in love with bitcoin.
If this was the main stumbling block to failure for bitcoin I'm fairly certain someone would write some software for businesses that track your wallets and customer's BTC purchases to calculate this for you and then pre-fill whatever form you need at the end of whatever period this needs to be paid (yearly I'm assuming).

Remember one of the things that makes bitcoin such a leap forward is that it is programmable money.  As long as there is sufficient incentive these light technological hurdles will be coded for in due time.

Nobody will ever pay their taxes because there is too much paperwork... oh wait actually I do it all by myself with no training thanks to turbo tax every year.

I'm sorry but I think you'll have to hang your hat on something else other than paperwork as far as Bitcoin's doom.
member
Activity: 98
Merit: 10
December 09, 2013, 06:39:14 AM
#67
Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?
No.
1) This is where you lost me.  The merchants don't have to hold onto the BTC for bitcoin to have been used as a medium of exchange.  The BTC purchaser exchanged their bitcoins for a product regardless of the actions of the merchant after the fact.

2) The idea is that at first most merchants immediately convert 100% to fiat currencies as hopefully more and more merchants adopt bitcoin (users of bitcoin driving the economy forward).  At some point enough players are accepting bitcoins for payment that some merchants can afford to keep some percentage of sales in BTC to then pay suppliers or for services necessary for their business (merchants driving the economy forward).  This then cycles and continues to grow the bitcoin economy in a positive re-inforcement loop that ideally ends with majority of participants only converting small percentages to fiat or none at all.  It all has to start where we are now though.

Not to say that things will actually evolve like that, nobody knows how far this new economy will grow.  However I think it's a bit myopic to completely rule out fiat convert merchant adoption today as any sort of potential progress and conclude it's game over.  This is the first part of the process, we'll know if it works or not with time.

1) If you sold your bitcoin for dollars and used dollars to buy from the merchant would you qualify bitcoin as a media of exchange? Of course not. Now if the merchant does it for you because he does not want your bitcoins but dollars its the same scenario.

The merchant accepts bitcoin not because he wants bitcoin (again he dumps for dollars) but because he knows that bitcoiners are wealthy customers that would like to transact in bitcoin and that there is little competition for these customers at the moment.

The dumping of bitcoins by the merchant creates transaction costs (spread) that makes transacting in bitcoins expense.

2) No its not a gradual thing. You either hold onto bitcoin or you dont. Again the merchant can profit by having wealthy customers with no competition. He has not endorsed the use of bitcoin as currency unless he holds onto it.

There is a huge psychological hurdle to accept bitcoin, because bitcoin itself is not valuable. I explain this in more detail in this thread https://bitcointalksearch.org/topic/can-bitcoin-replace-the-dollar-364207.

sr. member
Activity: 410
Merit: 250
December 09, 2013, 06:25:03 AM
#66
Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?
No.
This is where you lost me.  The merchants don't have to hold onto the BTC for bitcoin to have been used as a medium of exchange.  The BTC purchaser exchanged their bitcoins for a product regardless of the actions of the merchant after the fact.

The idea is that at first most merchants immediately convert 100% to fiat currencies as hopefully more and more merchants adopt bitcoin (users of bitcoin driving the economy forward).  At some point enough players are accepting bitcoins for payment that some merchants can afford to keep some percentage of sales in BTC to then pay suppliers or for services necessary for their business (merchants driving the economy forward).  This then cycles and continues to grow the bitcoin economy in a positive re-inforcement loop that ideally ends with majority of participants only converting small percentages to fiat or none at all.  It all has to start where we are now though.

Not to say that things will actually evolve like that, nobody knows how far this new economy will grow.  However I think it's a bit myopic to completely rule out fiat convert merchant adoption today as any sort of potential progress and conclude it's game over.  This is the first part of the process, we'll know if it works or not with time.
member
Activity: 98
Merit: 10
December 09, 2013, 06:00:47 AM
#65
Do you imagine "them" as this cohesive group of people plotting to make your life miserable?  The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them...Bitcoin forces governments to be accountable.  This is better for everyone.  
I think you are totally off base. Politicians care about power and maintaining their power. Control over money and inflation is one of politicians most powerful instruments to finance their operation. Is it bad for the economy? Yes.

Exactly! "Politicians care about power and maintaining their power," in order to make a better life for themselves and those close to them.  We're saying the same thing, porc, you just need to think bigger: bitcoin is a disruptive technology that will eventually break certain social/political alliances.  


Yes we are have the same premise, that politicians will act in order to increase their power which is their main motivation.

However, you believe that  politicians cant stop bitcoin and thus will embrace it. I believe that politicians can and will stop bitcoin in order to defend their money monopoly. I have already explained to you in detail, why the power over money is such an enormously powerful tool for politicians.

You have not explained to me 1) why bitcoin is more valuable to a politician than a money monopoly 2) If 1) is not the case why you think politicians cant or wont stop bitcoin in order to protect their money monopoly.

I never said bitcoin might not be useful for society. I am saying that the value judgement of the politicians is different than our value judgement.
sr. member
Activity: 353
Merit: 253
December 09, 2013, 04:21:27 AM
#64
Another idiotic thread .... Roll Eyes

If i could have 1 BTC for every thread like this when the price crashes, i would be banging Kimdarshian and driving a Maserati.

 Grin Grin Grin Grin Grin Grin Grin Grin Grin Grin
legendary
Activity: 1162
Merit: 1007
December 08, 2013, 10:16:26 PM
#63
Do you imagine "them" as this cohesive group of people plotting to make your life miserable?  The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them...Bitcoin forces governments to be accountable.  This is better for everyone.  
I think you are totally off base. Politicians care about power and maintaining their power. Control over money and inflation is one of politicians most powerful instruments to finance their operation. Is it bad for the economy? Yes.

Exactly!  "Politicians care about power and maintaining their power," in order to make a better life for themselves and those close to them.  We're saying the same thing, porc, you just need to think bigger: bitcoin is a disruptive technology that will eventually break certain social/political alliances.  

Bitcoin gives politicians the opportunity to "opt out" too.  If they see bitcoin as the inevitable winner, what are they going to do?  They are going to buy it privately while towing the party line that it should be regulated!  But since they have a vested interested in the success of bitcoin, all regulation will be watered down in a way that actually strengthens bitcoin.  When bitcoin is strong enough, they will jump ship and be welcomed with open-arms.  
hero member
Activity: 658
Merit: 500
December 08, 2013, 09:15:21 PM
#62
Another idiotic thread .... Roll Eyes

If i could have 1 BTC for every thread like this when the price crashes, i would be banging Kimdarshian and driving a Maserati.
sr. member
Activity: 252
Merit: 250
December 08, 2013, 03:17:14 PM
#61
U.S give most BTC to China and takes most real money of the Chinese people.  Give nothing for real money !!!
It is tactical general impoverishment of China.

http://fiatleak.com/

I bet that if bitcoins are nothing you must have a lot of them right?
sr. member
Activity: 406
Merit: 250
December 08, 2013, 02:11:04 PM
#60
U.S give most BTC to China and takes most real money of the Chinese people.  Give nothing for real money !!!
It is tactical general impoverishment of China.

http://fiatleak.com/
copper member
Activity: 1498
Merit: 1528
No I dont escrow anymore.
December 08, 2013, 12:41:34 PM
#59
a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains.

I dont know where you are from, but where Im from you pay taxes if you gain money commercially no matter if its BTC, USD, AUD or EUR. If I buy something private I dont pay taxes, wether I pay with BTC, USD, a local currency or chicken. So this point is invalid.
member
Activity: 98
Merit: 10
December 08, 2013, 12:25:13 PM
#58

1) Are implying that all citizens would be required to track their entry and exit points into bitcoin in dollar terms and pay capital gains on the difference?  This is a worthwhile debate and I look forward to seeing guidance issued by various tax authorities on issues like these.  Here's my take:

2) Bitcoin makes VAT easier to collect but capital gains tax much harder to collect.  If you attempt to collect tax on bitcoin gains, then you must also allow taxpayers to write-off bitcoin capital losses.   This system would be very easy to cheat in favour of the tax payer and very hard to police by the tax authority.  People hoping to minimize their capital gains on bitcoin could easily obfuscate their trail (in fact it would be hard not to): how is anyone going to know what exactly Sam bought with her bitcoins, or the exact price she bought them off of Joe?  


1) Yes. The need to pay capital gains tax is one of the main reasons we don't have competition in the media of exchange market. If there would be competition, people would already be using digital gold or silver. However, the need to pay capital gains tax on every transaction makes the legal use of such media incredibly complicated and expensive. Some countries do not allow losses to be written off. This, however, is not the main point: Even if you are allowed to write of losses the sheer amount of paperwork needed to document every bitcoin increase and decrease effectively kills off any competition to the dollar. The dollar is the only media of exchange which is not taxed (at least in the US, same for other countries, its always the government currency).

Real world example: If an individual buys something for his bitcoin he will have to pay capital gains tax. For example, one stewardess was an early adopter of bitcoin and bought a ticket to space from Richard Bransons Virgin Galactic. Now the government could find out her identity (via virgin galactic) and ask her if she paid capital gains on her bitcoin stake she used to pay Virgin Galactic. Same goes for Virgin Galactic. Now you could make an example of her (show trial) in order to scare off individuals who might have used bitcoin and evaded taxes. You can also make an example of businesses who are easy to track.

However, this is only part of the argument I made in the OP. Other ways (new laws not yet on the book) of killing off the media of exchange competition (like bitcoin, gold, silver etc.), is to prohibit their use or acceptance by merchants (GoldMoney, Liberty Dollar for example; the creator  of Liberty Dollar (Nothaus) was labelled a domestic terrorist, real world example of a public show trial btw.). Thus, bitcoin will not function as a media of exchange.

2) You have to remember being a successful business and having lots of customers is a public act. Every company files tax returns and balance sheet statements. Now if you show lots of revenue you have to show lots of transactions to justify this revenue and pay capital gains taxes if these transactions are in bitcoin. The government can simply look at your bank account to see if you have corresponding transactions in its government currency. If your bank account does not show transactions because you used your bitcoin account they know whats up. So, again they will want to see a huge amount of paperwork regarding capital gains and bitcoin that must in their view go along with your revenue.

Again, its not about the tax you pay, but about making it annoying for merchants to transact in bitcoin. If current capital gains law is not annoying enough they will find other methods like out right prohibiting bitcoin use (labelling anyone who does transact in bitcoin a terrorist, see Liberty Dollar) or use "soft force" via paperwork regulation to make bitcoin uncompetitive (like capital gains tax law).

>> You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem.

Do you imagine "them" as this cohesive group of people plotting to make your life miserable?  The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them.  I agree that the system in place steals purchasing power through inflation--most people do. But to imply that everyone in government drools over the thought of stealing your purchasing power is juvenile.  Everyone knows there is corruption in places, but still most people in government are just like you or I. They dislike crazy banking fees and they worry about reckless government spending affect their purchasing power in retirement.  

Bitcoin forces governments to be accountable.  This is better for everyone.  


I think you are totally off base. Politicians care about power and maintaining their power. Control over money and inflation is one of politicians most powerful instruments to finance their operation. Is it bad for the economy? Yes. However, price increases can be blamed on evil business men who are greedy. Printed money can be used to pay off debt, to finance close buddies who will give you special privileges, dolling out money to important voter segments needed for reelection without raising taxes and so forth. So, your statement that they like low transaction fees more than this enormous power is false. Read history and you will know. Protecting oneself against inflation is easy, its only the people saving in dollars that are affected (thats why they want you to hold dollars so they can steal your wealth if need be). Politicians know how to buy land, stocks and other hards assets to protect their savings.

Again, thinking Bitcoin will replace the dollar monopoly is naive. Now if it does replace the dollar monopoly, we still have to ask the question if it will be the dominant media of exchange and store of value, after all there are alternatives.

Now my thesis again is that it will be prohibited to use bitcoin as a media of exchange just like they closed down Liberty Dollar or Gold Money and in China this other alternative currency (forgot its name). China made a move on bitcoin already.

Bitcoin will be outcompeted by Gold regarding the store of value aspect.


member
Activity: 98
Merit: 10
December 08, 2013, 09:32:23 AM
#57
Reread the thread: They force us by expecting us to pay capital gains taxes on every media of exchange thats not government currency.

Why is that a problem? If bitcoin value increases compared to local fiat it's good for the merchant. They will pay capital gains which are ONLY a fraction of such gain. If they lose value or stay the same, no problem.

That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often

Personally, I don't believe him but have no experience in this field to refute with competence...

Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day....

After a week you then cash out 50%. You will need to calculate the average rate USD rate you received the coins, to determine the profit you have made by accepting them.

A week later you will need to cash out another 10%. You have had another 100 transactions, meaning your average price has changed again....

I would not want to do this unless this is automated.... This can be very messy. And if you do one mistake the taxman will surely come around and will have a look at all transactions you have done...


Finally someone understands. Exactly! Its enormously messy and increases cost considerably. Taxing the medium of exchange is one of the main reasons we dont have competition in the medium of exchange market. If everyone was free to use what ever medium of exchange he wanted we would have already switched to more desirable alternatives like digital gold. One of the main reasons we use the dollar is because it is the only medium of exchange that is not taxed.
copper member
Activity: 7
Merit: 0
December 08, 2013, 07:47:13 AM
#56
Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered.

I didn't get that point. If you buy something for dollars and then sell it for dollars, you still have to pay taxes. What am I missing here and what is the difference between dollars and bitcoins then?

The difference is that the "medium of exchange" is taxed.

For example: If the merchant accepts dollars and holds onto them and eventually uses them to buy new supply (i.e. sells dollars), he doesnt have to pay capital gains taxes on a possible increase in the dollars value. If the dollar trades higher versus the euro, the government does not force you to pay taxes on these exchange rate "gains".

However if the merchant accepts bitcoin and holds on them and eventually uses them to buy new supply (i.e. sells bitcoins), he will have to pay capital gains taxes.

The same is true for your average bitcoin holder. If he buys one bitcoin for 100 dollars and eventually buys products with the same bitcoin (which is now worth 500 dollars) he will have to pay capital gains taxes on the 400 dollar increase. He wont have to do this if dollars increase in value in comparison to bitcoins, euros or any other currency.

My (layman) understanding of capital gain tax laws is that you have to pay capital gain taxes only if you buy the asset for a certain amount of dollars, then sell it for a bigger amount of dollars. In the example above it is not the case since the asset (bitcoins) is not sold for dollars but spent directly for buying goods. If this understanding is wrong, I am interested by sourced rebuttals.
newbie
Activity: 37
Merit: 0
December 08, 2013, 06:32:22 AM
#55
A merchant, i.e. someone who is selling, must buy from their suppliers.

If the merchant takes BTC and their supplier does NOT, then thy must convert to another currency, one which their supplier will accept.

As more business and people take BTC as payment, a self-reinforcing process begins, in which BTC will become more accepted, as it is more accepted.

See how that works. We call it positive feedback.

This is why you see what you seen now.

K
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
December 08, 2013, 05:54:20 AM
#54
That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often

Personally, I don't believe him but have no experience in this field to refute with competence...

Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day....

What you say are the problems we already have today (and had yesterday), there is nothing new. Then how do we handle them right now and how is Bitcoin different from any other foreign currency we have to work with? These problems are technical issues only. If such a need does arise, they will be fixed pretty soon through automation and what not. Do you think that payment systems like Visa or MasterCard or whatever are less intricate inside?
sr. member
Activity: 826
Merit: 250
CryptoTalk.Org - Get Paid for every Post!
December 08, 2013, 02:24:55 AM
#53
porc:  Governments do not gain from inflation.  Governments borrow money at interest like everyone else (though they generally have excellent credit) and the Bond rates reflect the inflation rate, what ever desire investors have for the security of a Treasury bond, they will subtract the rate of inflation from their offer.  So while the government pays back every Treasury bill with dollars that are reduced in purchasing power they pay MORE dollars then they collected so it is a WASH at best.

People need to get off this idiotic belief that inflation (particularly at <2%) is a huge Wealth transfer mechanic.  It is not, but INTEREST IS, the average working man pays HALF his salary to pay for Interest embedded in the cost of everything he consumes, he loses mere pennies to Inflation and it's not even the government that even gets thouse pennies.  The Inflation-is-theft meme is quite literately the MATRIX that has been pulled over your eyes to conceal the truth, that you are a slave to USURY, a usury so pervasive that most of you people would fight to defend it.
legendary
Activity: 2450
Merit: 1076
keybase.io/fallingknife/
December 07, 2013, 06:41:51 PM
#52
These are tired arguments from the point of view of First World Westerners.




1) Medium of exchange.

"Bitcoin is only a medium of exchange when merchants accept it and hold onto it."

Not true. It' a medium of exchange when ANYONE accepts it. Not just businesses.  Bitcoin was already an effective medium of exchange before anyone even knew what btc was.


"a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered."

Maybe, some governments.  Not ALL governments. Your argument assumes that all governments will collude to scheme to preserve the status quo. I doubt that this will ever happen, as evidenced by the world's tax havens holding out to provide a shelter for wayward wealth.


"b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money."

Maybe, maybe not. Some countries, such as Ecuador, don't even have their own currency. WTF do they care.  And the governments may not have a choice, as Cyprus hinted at.  If people think a local currency is shit or untrustworthy, they will flee to a different asset. Why not a digital asset that can be banked in the blockchain and retrieved from anywhere on earth?  Beat's taping 100 ounces of gold to you body and then trying to get through an airport metal detector.

"2) Store of Value

After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely."

Your whole argument seems to hinge on ALL merchants failing to adopt, and ALL governments colluding to ban bitcoin.  BTC has spectacularly collapsed 6 times in 2013, and will probably collapse 6 more in 2014.  It's risky, yet people are drawn to it like, well, gold!  Yet it's easier to manage than gold/silver, easier to trade, more private, more fun, more interesting, and it's in a limited quantity unlike Fiat and even Gold/Silver (they keep digging up more of that shit after all!).

Regarding miners.... yes, Governments might be able to threaten miners, but they can mine over a proxy. Or they can ship their miners to North Korea if necessary and operate from there. There are technological ways around the problem. And again, your argument hinges on ALL countries getting together to prohibit mining everywhere in the world.  Miners could be located on international waters, if necessary.  The problem is not insurmountable.

If Governments are as succesfull in stopping btc as they are in collecting internet taxes, then btc should be safe for a long time.
I don't think the entire future of BTC hinges on it replacing the dollar. There are many benefits it can provide even if that doesn't happen. 

I think BTC will continue to rise, and will easily surpass $2000 in 2014 as these benefits are discussed and understood, even against the backdrop of posturing by a few big bully governments.
sr. member
Activity: 361
Merit: 250
December 07, 2013, 06:04:34 PM
#51
Reread the thread: They force us by expecting us to pay capital gains taxes on every media of exchange thats not government currency.

Why is that a problem? If bitcoin value increases compared to local fiat it's good for the merchant. They will pay capital gains which are ONLY a fraction of such gain. If they lose value or stay the same, no problem.

That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often

Personally, I don't believe him but have no experience in this field to refute with competence...

Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day....

After a week you then cash out 50%. You will need to calculate the average rate USD rate you received the coins, to determine the profit you have made by accepting them.

A week later you will need to cash out another 10%. You have had another 100 transactions, meaning your average price has changed again....

I would not want to do this unless this is automated.... This can be very messy. And if you do one mistake the taxman will surely come around and will have a look at all transactions you have done...




 
Pages:
Jump to: