Is there any indication that past USMS auctions sold bitcoins at a discounted price? Unless bidders are buying at significant discounts, there's no reason to think they'll turn around and immediately sell them.

If anything, these bitcoins might fetch a premium for the same reason that "virgin bitcoins" do. They are officially whitelisted by the US government.

Not exactly. It solves the tax problem for a very specific use case -- where people link their debit card or bank account to Strike and pay merchant invoices in full. For people who never want to hold bitcoins or directly interact with Bitcoin, that works.

If you ever want to maintain funds on LN or hold bitcoins for any period of time longer than seconds, you will trigger taxable events under the US tax code once you liquidate. For instance:



Buying and selling bitcoins like this is undoubtedly taxable under the US tax code.

How long ago was that? Shapeshift membership became mandatory in October of 2018. Shortly after, wallets like Jaxx and Coinomi disabled in-wallet exchanges for anyone who didn't link a verified account.

It may differ from jurisdiction to jurisdiction, but currently, establishing a verified Shapeshift account (so I could actually trade) would mean thorough KYC:

It depends how much incentive (i.e. discount) the merchant can give. In Jack Mallers' post, he gave the example of merchants in the cannabis industry:


That implies that merchants already have the margins to give customers 5%-15% discounts if their processing costs could be brought close to 0%. It's a big enough discount to get people to start using the app, since it leverages a payment rail they were planning on using anyway -- their debit card:


It's pretty cool, but the model probably won't work for lower margin businesses that don't have the same payment processing problems.

Very few cases will have "no doubt." According to Chainalysis, stolen bitcoins are usually moved through mixers/coinjoins and sold through OTC brokers before they ever land on exchanges. Huobi and Binance have no right to steal such bitcoins from their clients and distribute them back to victims. It would be very troubling if exchanges proclaimed themselves to be arbiters in these matters.

We're seeing the opposite in the US. Shortly after the state of Ohio began accepting bitcoin for tax payments, they indefinitely suspended the program.

Anyway, it's good news for Bitcoin's legitimacy, sure. However, I strongly recommend against actually paying taxes using bitcoins. You'd be providing the authorities ground zero to analyze your holdings and blockchain activity.

Satoshi did naively hope that miners would always allow some free transactions, but I don't think he envisioned that all Bitcoin transactions would be "cheap." He encouraged the use of mandatory fees early on, even when there was room for free transactions:


Also, take a moment to recognize what minimum fees used to mean in Satoshi's day: 0.01 BTC vs. the 1 satoshi/byte minimum we generally pay today.

Satoshi also encouraged a fee market, just like we have now:


The narrative of perpetually infinite cheap/free transactions that Gavin Andresen and Jeff Garzik promoted was never "Satoshi's vision" and I think the above quotes convey that.

Using Omniwallet may not be necessary (or even possible), depending on which exchange is used. Some exchanges only offer Ethereum-based USDT support. As an example, this is what you'll see if you input a Bitcoin address for USDT on Flyp.me:



In those cases, you'll need an Ethereum wallet like MyEtherWallet (MEW) to receive and spend the USDT.

That doesn't conflict with the above statement. These functionally say the same thing:

Why do you disagree with the first statement, but not the second?

Different types of Taproot transactions can look identical on the blockchain. That doesn't mean every transaction will look identical -- this already accounts for your "multiple possibility of Bitcoin script/contract" condition.

Are you saying that Taproot does nothing to obfuscate transaction type?

I wonder what this entails (if anything) with regards to AML/KYC requirements on Singaporean exchanges like KuCoin and CoinBene.

I see new requirements on operators to:

• establish a registered office in Singapore,
• appoint an agent who will be physically present at the registered office when required by authorities,
• keep accurate records of transactions,
• notify the authorities of registration changes,
• appoint an independent auditor on an annual basis.

Most of the law (full text here) is about the new licensing regime, corporate structures, and auditing/inspection procedures. I don't actually see any references to terms like AML, KYC, laundering or due diligence.

I don't think that explanation contradicts Pieter Wuille, or me. Nobody is saying that every transaction on the blockchain will look identical.

What, specifically, do you disagree with in these statements?

Binance can't fake their cold wallets, but volume is easy enough. I'm certainly suspicious. We all know Changpeng Zhao is no stranger to faking volume, and the lack of drop-off post-US exodus just doesn't add up.

Help me dissect these explanations from Pieter Wuille:



I know it doesn't apply to every case, but I was under the impression that obfuscating transaction type was the primary privacy gain in the Taproot proposal.

That's an interesting dilemma. Ultimately, I think it's unlikely.

Taproot can make all different types of transactions look identical, including simple payments. Assuming enough of the network updates to incorporate Taproot, there will never be much certainty of proximity to CoinJoin or centralized mixer transactions.

I disagree. I sometimes have a tendency to elaborate a lot -- perhaps excessively -- to get my point across. Sometimes I have to wonder, are people thinking "TL;DR?"

If you can be concise and still get your point across, do it.

To whatever extent we can, we should all be building more liquidity on sites like LocalCryptos, Bisq and Hodl Hodl.

Just put up some offers -- what can it hurt? Other traders who normally take liquidity from LocalBitcoins and Paxful are surely hurting from their AML/KYC policies and are looking for alternatives. There is also an opportunity for market making here since it's a less crowded market: Maybe put offers on both sides.

I won't blame them for AMLD5, but I will blame them for pulling the rug out from under their customers. If they planned to implement EDD on every customer from 20+ countries, they should have informed them weeks/months in advance. Instead, they induced a crisis by mass locking accounts.

LocalBitcoins tends to bend over backwards -- and hastily so -- for their government overlords. Is that what we get for a using a service based in Finland? Probably.

LocalEthereum (now LocalCryptos) is based in Australia and seems much more hands off. No KYC required and just a blanket "follow your local laws" clause in the user agreement:

Are you sure you guys don't have a "casualty" tax deduction? In the states, you can file Form 4684 (Casualties and Thefts) to account for losses from any kind of act of God, hack, theft, etc. where you lost bitcoins. There are some limitations, though. This is the breakdown for a "tragic boating accident" sort of tax deduction in the US:


So, no matter how you came to own the property (investment vs. earned income), you can recoup a big chunk of the theft/casualty loss in tax deductions. Exactly how much you can deduct is determined by your total income.

Speculation: Without doing a deep dive into their wallets, I would assume there was an exodus when they prohibited US signups last June and officially kicked out US customers in September. I wouldn't be surprised if Americans previously comprised 30-40% of their holdings.


I believe most of that is not technically in BitGo's custody. They provide non-custodial hot wallet solutions for lots of major exchanges, so that volume is spread out among many different entities who control their own private keys. The Bitfinex hack of 2016 infamously exploited a poorly implemented BitGo wallet where Bitfinex controlled all the keys.

If you want to engage in speculation like that or discuss the idea of honeypots in general, just open a new thread in Service Discussion as opposed to trolling the ANN thread.