Bitcoin Forum

There are a lot of threads about taxation and FinCEN regulation on this forum. Now you can pay taxes, register yourself as Money Service Business (MSB) and sleep well, but... The state won't stop and will continue to strangle Bitcoin. One day it will make Bitcoin illegal.

Now the state collects data who uses Bitcoin, so in the future (when Bitcoin becomes illegal) they'll pay very close attention to those who declared that they "touched" bitcoins. It's a well known trick:
1. Pretend you are just going to regulate something.
2. Collect data about users.
3. Make it illegal.
4. Spy the users.
5. Prosecute those who violate the law.

Keep this in mind...

Yes but i dont really care. We can always change government. Dont forget about this too. And i hope they wont forget about this also. People are real power and nobody ever won with people.

U r lucky one. Most of ppl unable to change their government.

I said WE not me. And i understand that people THINK they cant change anything. But its false statement.

The biggest problem governments will have with bitcoin is the anonymity involved in transactions. They will point to money laundering and criminals using it as an untraceable  medium of wealth as the reason to shut it down. Without that they won't have leg to stand on in a court of law. You'd think there aren't any real money laundering operations to warrant gov scrutiny.

People should pay taxes on bitcoins. It's probably the only thing that can prevent a complete shutdown.

I hope you are not refering to voting, because then we are all doomed.

No one owns Bitcoins. Bitcoins are represented n the blockchain which is distributed free of charge to anyone willing to download it.

Some may claim ownership of private keys, however.

Wasn't there a ruling by FinCen not too long ago stating something to the effect of declaring what is converted back to fiat for capital gains purposes, meaning it's semi-legit in the US?

How can a nation tell who's using crypto currency? Isn't there a level of anonymity that will make it cumbersome trying to pinpoint who to tax?

All the information is public isn't it? All transactions are recorded in the blockchain which anyone can view. All governments have to do is develop a computer program to track those transactions and match them to individuals and businesses. If you've ever published a bitcoin address in public the govt. could use that information to track your transactions. It may not be able to get a complete picture but a partial one is definitely possible.

Bitcoin is NOT anonymous. It's pseudonymous. If at some point u reveal ur name then ALL transactions can be tied to it. Even if u use "shared" wallets.

More info that proves that Bitcoin is not anonymous - http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf.

Yes. That is why this news just makes me smile.

I'm looking forward to the failures, trials and salty tears of so many politicians in coming years.

Do you have any idea how long time, I have hated these ignorant lying bastards? Finally we get to f*ck them back.

Lets be realistic, bitcoin is not really anonymous as the humans using it are leaving traces all over the place.
That was shown at  28c3 in 2011 http://www.youtube.com/watch?v=-FaQNPCqG58 (http://www.youtube.com/watch?v=-FaQNPCqG58)  00:42:35

Do no fear your government.  Your government should be pissing their pants with the thought of you.

Maybe should, but they surely don't.

Means it's time for a revolution ;D  They really don't fear us anymore.  We need to remind them why they should.

rofl i didnt even think about that, i just assumed he meant moving away. But now that you point it out, im sure thats exactly what he meant. ::)

That is a valid point.
Whatever you say that you have bitcoins or not both can be truth in the same time from a different point of view.
However best if you don't say to the police both on the same day because you will confuse them.

Yeah, they get angry when they don't understand something.  :D

Right now there is a debate about a law to make internet service give goverment information about what are people watching on internet.

Anyway, nobody wants this law, but it is been debated. Thought it was a democracy, am I wrong?

A democracy is just a front; really, you elect a few jerkoffs to decide how you live your life, and most of them are jerking each other off already.  If CISPA passes into law, there should be no doubt in anyone's mind that the government is actively working against its citizens (though many of us already know this to be the case), and I doubt people will put up with it for long.

You know the straw that broke the camel's back?  CISPA might be that straw.

It is not a valid point. It is the same as saying that no one owns dollars. You possess a private key that signifies ownership of the bitcoins it represents.

lol worst advice ever is to say dont declare bitcoins. especially when the reasons of not declaring them is advice from a person that has not read the regulations, does not understand fincen and then goes on a power trip thinking they will cripple the world at some point.

major face palm.

i don't advise not declaring bitcoins. in as much as tins of baked beans. if the government ask how many you have.. just say what you have. so far governments are not asking. so there is nothing to worry or think about right now... but by lying for any reason if they ever do start asking can cost you alot more in the long run, instead of just telling the truth.

this is where exchanges go wrong, they dont read regulations, they don't follow the rules they lie when questioned.. and then everyone wonders why they get shut down

I believe my advice is a good one. I may be wrong.

I suppose it's not real
paying transactions on btc means all governmental transactions become transparent
they won't do this

you guys seriously need to atleast read the regulations and know how fincen/sec/fsa work.. they are not pro-active. they are reactive.

meaning if they get a complaint then they will act. if when acting they find something iffy, they will enforce.

so as long as you learn the rules and use them wisely to your advantage, so that if EG
a scammer tries to do a charge back, which triggers the banks to internally investigate and ask you questions. and you give them satisfactory information. they wont then make a SARS report to then cause fincen/FSA/SEC to come looking at you in detail.

fincen rules are for financial institutions to do internal investigations first. and only file a SARS report if the institutions own investigations dont end in complete satisfaction.

so the simple solution is to not lie, not hide details. comply with the rules and the snowball of headaches does not start rolling. it stops early on and you get to continue with business.

The implications of this kind of issue fascinate me.

For example, a private key is ultimately a string of digits - a number. People can now own such numbers, it seems, and it is potentially a crime for me to know "your" number or you to know "mine". The simple act of counting incrementally 1-2-3... can eventually make us all criminals - tax-dodging criminals at that. (Hehe - don't you dare say THAT number - it's mine, all mine - muhaaaa).

Furthermore, governments want to tax people because they have access to some of these numbers, through tax rules not yet determined (but I'll go out on a limb and predict they will be clumsy and invasive).

If you have other numbers in your possession - binary strings constituting data governments don't approve of when processed by some algorithm (such as a jpg image in a viewer) - then they might incarcerate you or worse. You might have in your possession a string, meaningless to you, that when processed by the State's algorithm indicated that you were guilty of horrible offenses - what you thought was your old tax return might turn out to generate a damning graphic image when seen through some arbitrary viewer after some arbitrary decompression process at some arbitrary resolution.

Complicated things, numbers. Hard to imagine any politicians or bureaucrats thinking these issues through very deeply.

What would they do if some day a number turned out to work as a private key representing, say, a trillion fiat-bucks worth of alt-coin, and happened also to play some national anthem when used as input to a music program and/or showed a lewd image when used as input to a viewer program and/or gave a recipe for making WMDs when used as input to a word processor? Would they tax you, salute you, disgrace you or send you to Gitmo? Improbable, of course, but not impossible and there is lots of potential for delicious paradox without resorting to this level of reductio.

Yeah, that's why IP is stupid.

Sort of along the same lines, technically calculating pi is illegal. Since it contains all finite bitstrings doing so would break every single ip law in existence all at the same time. You would be a child pornographer and a media pirate and the owner of the plans to create a nuclear weapon. So anyone who attempts to calculate pi for research purposes puts themselves in danger of spending the rest of their life in prison.

Yes... all things digital risk going into those kinds of issues. Our examples are extreme and therefore are perhaps easily dismissed, but the underlying issues are very real, I think. Laws and customs designed for dirtspace/meatspace do not work well in cyber/digital space - sort of like the tensions between Newtonian and quantum physics.

i just think its funny in how it illustrates the absurdity of the idea of owning an idea. which i own by the way so back off!

If someone has owned SolidCoins, can they declare that they have owned them to get a tax refund instead?

(or would that be considered supporting terrorism since SolidCoin infringes on copyrights?)

Delicious: If I own your genes and you own the idea of gene ownership, then... a tree falls in the forest, or something.

Anyway, rigorously on topic, I now solemnly do not declare that I have ever owned BTC.  :)

Hey, here is ur other quote:


Wild guess, u work for government. Am I right, Mr. Smith?

I've put a provision in my will for my Bitcoin.  But then I see no way at all that possession of Bitcoin could ever be made illegal.  

I've read that too, they can only tax you if you convert bitcoins to fiat currency.

There is a very simple solution to all of these: Remove all fiat money from BTC exchanges.

What do u expect to exchange bitcoins for in this case?

Precious metals?

If you thought bank transfers took forever....

Bitcoin anonymity is a myth. Take satoshi for example, the guy has millions but can't be spending to "save his life"...

Anything except fiat money.

Urm,

If they ever made it illegal, send your bitcoins through a shared wallet to another wallet you own (or a trusted exchange), declare that you gave them away when they were made illegal (if ever asked) and continue to spend your bitcoins ....

but now, any country that decides to tax bitcoins gets a massive one up on the country that made it illegal .. hence why this will never happen, any country declaring it illegal to trade in bitcoin is severely shooting itself in own foot.

Fiat's days are numbered along with those that created the world we live in today

No one can ever accurately declare they've ever owned bitcoins, but bitcoins cannot be owned. I will declare that I have owned numerous encryption keys, though I cannot remember which or what relevance they had.

Um, what makes you say that?  I'm pretty sure it's untrue.

In my opinion, it would be impossible to prove that you own bitcoins, unless you officially admitted it.

Consider the example of computer hacking - it is impossible to prove that you personally was doing the hacking, even if your IP gets logged during the hack. I have read about many cases where hackers were tracked by their IP and convicted, but in ALL those cases the hacker has admitted guilt. I have never ever read about a case, where someone would be convicted of hacking, only because of their IP, while they denied doing the hacking. If you have heard of any such cases, please correct me.

The same applies to bitcoin - it would be impossible to prove, if bitcoins were used by you, or just by someone pretending to be you. Even if a bitcoin address was posted on your facebook page, who could prove, if it was really posted by you, or by someone who hacked your facebook?

http://en.wikipedia.org/wiki/Pi

Calculate far enough, you'll get any data you want. (Yes, that may be further than practical to calculate, but it's there. Eventually.)

What about the wallet on your computer? Don't you think it's existence is sufficient proof that you own the bitcoins at the addresses it contains?

Nope, not the same thing at all. A very common misconception though.

Consider writing pi in binary. That never repeats, and can be considered a decimal number too. But you'll never ever see the single digit "2" never mind longer sequences.

True. But you'll see numerous instances of "10" and any one of them could be interpreted as the decimal digit "2."

Edit: And you'll also find numerous instances of "00000010" which is the standard binary representation of the digit "2." Any infinite, non-repeating bitstring contains all finite bitstrings. Somewhere.

The "considered a decimal number too" is an artifact. The fact that a binary number looks like a decimal number does not make it a decimal number for purposes of computation. There are no eleven-toed sloths.

If you're wise you could do all your trades over the counter on localbitcoins or whatever. Anyone who's used an exchange likely has a papertrail. That trail is strongest if you've sent them ID.

I've just shown you this fallacy is not true, yet you repeat it.  Let me try again, let's only talk binary this time.

Consider the number that is a zero, a one, 2 zeroes, a one, 3 zeroes, a 1, etc.

010010001...

Clearly this is non repeating and infinite.  Show me where 11 appears in this bitstring?

Very well, you have shown me that you can construct an infinite bitstring which excludes a particular finite bitstring. But we're not talking about your constructed pattern. We're talking about Pi. Pi does not follow that pattern. So let me amend my statement: Any infinite, non-repeating random or pseudo-random bitstring contains all finite bitstrings. Somewhere. I might even say that any  infinite, non-repeating bitstring not specifically constructed to exclude them contains all finite bitstrings.

Take an infinite supply of alpha-bits, and set them down one after the other in no particular order. Do this long enough, and you will reproduce Shakespeare's collected works.

Count incrementally in Hexadecimal, and you will eventually get every private key in existence.

00010100 00010001

I guarantee that I have just reproduced, via copy and paste from here (http://www.befria.nu/elias/pi/binpi.html), someone's bank card PIN. Maybe even yours. (I checked, it's not mine)

Even if I granted you this false statement, you have to demonstrate that pi is random to establish your original claim.  Unfortunately pi is far from random.

However I can create a random bistring of zeroes and ones that doesn't have 11 anywhere in it.

Stick to something you understand and can prove.

You can. But the longer that bitstring gets, the less likely a 1 always being followed by a 0 gets. Perhaps you just don't get how big "infinite" really is?

Oh, and you'll note that I did say "random or pseudo-random." ;)

Wouldn't spying on users come 3rd? Seeing how making it illegal would stop their constant source of usage patterns,etc.Banning it comes 4th I think as, they'll have enough info to chase after all the users after snooping on them all first (after collecting that info before hand).

3rd take as long as to put signature under the law.

No. Thinking that you can stop the Mafia by giving them even more money is absurd. Any action that would speed up the inevitable collapse of the current system is morally justified, and is good for Bitcoin. Dump more dollars. Get more bitcoins.

That would be sufficient proof, but in order to get your computer, they would need a warrant, and in order to get a warrant, they would need to have some proof already.

Also, you could (and should) use a program like TrueCrypt to encrypt your entire hard drive. That way, it will be impossible to know if you had any wallets on your PC.

http://www.forbes.com/sites/jonmatonis/2012/09/12/key-disclosure-laws-can-be-used-to-confiscate-bitcoin-assets/

Well. Have one or two coins in a wallet. And thousand in the other. Pausible deniability. Done.

Well it sure is a lot easier than figuring out who is using paper cash... 

I would actually say that it is about equal! And frankly in many ways bitcoins are better than pure cash. If you have any faith in crypto at all you have to imagine that the goods and services available through bit/other coins will only continue to increase.

It's a good job I aint got any coins and only made out I did so I could learn what i did :P