“Your size is not size.”
Your law is not law.This is even worse than “Billionaires in my following, go ahead, see what happens”.“U.S. government, go ahead, see what happens.”
Politicians really have basic problems in understanding Bitcoin - because who cares what they think - Satoshi didn't ask permission from anyone when he invented Bitcoin...
Some Bitcoiners really have basic problems in understanding the real world - because who cares what they think - governments don’t ask their permission before imposing laws and regulations that can add costs, destroy market value (or even whole markets), drive good things underground, and send good people to prison.
Any USG action has zero
direct effect on me; thus, I am not speaking from any
direct self-interest. I am an anonymous cypherpunk physically located in an undisclosed jurisdiction. I can and do say,
“Your law is not law.” >99% of Bitcoiners are not me, and not anything like me. Also relevant: I have never done KYC on a cryptocurrency exchange. >99% of WO hatters are not me, and not anything like me.
I care about Bitcoin. (Also, of course, anything that affects Bitcoin’s value affects me.) Therefore, I care about this issue.
The ill-informed, ridiculously conceited nerd in the quoted tweet forgot to mention that when China banned Bitcoin mining,
a large percentage of global hashrate physically moved its equipment from China to the U.S. Chinese miners were working together with American mining companies to load ships with ASIC miners, move them to the other side of the world, and set them up in the U.S. The Chinese government didn’t care: They were not trying to target Bitcoin globally, but rather, to drive it out of their country.
I focus specifically on mining, because I doubt that the U.S. would ever ban Bitcoin outright. With some historical exceptions (such as the 1934 gold ban you apparently don’t know about), that is not the American way. The American way is customarily to use regulation, partial prohibition, and taxation to corrupt, distort, undermine, and control things deemed problematic by the USG. The American way also often includes attempting to impose U.S. laws on the entire world. In that aspect, the U.S. government is infinitely worse than the Chinese government.
The absurd IRS rules for applying capital gain taxes are one example of
undermining Bitcoin—and whatever else her bill may say, I should duly thank Senator Lummis for attempting to bugpatch
this with a partial, politically viable mitigation. Never mind the tax itself:
The IRS rule about what constitutes a “taxable event” has severely inhibited mass-adoption and use of Bitcoin as money in the U.S.—one of the biggest and most influential markets in the world. It has thus been a major factor in distorting Bitcoin worldwide.
It has held Bitcoin back. It has damaged Bitcoin’s long-term value. And some Bitcoiners are so blinkered by their own “neener-neener, your-size-is-not-size, government can’t stop us” nonsense that they don’t even see what the USG has
already done to Bitcoin—not with legislation, not with a ban, but with some rulemaking by a taxation agency.
Tightening the KYC noose is one of the biggest long-term threats to Bitcoin. It has been ongoing for years. Governments are obviously a factor there!
Now,
I foresee a multi-pronged carrot-and-stick attack to force Bitcoin to switch to POS. A part of the “stick” is government regulation that drastically drives up the costs and hassles of mining (more likely), or maybe even an outright ban of POW mining (less likely).
The writing is on the wall. In the U.S., which now hosts a terrific percentage of global hashrate, there are a few Federal legislators actively trying to prevent this: Cruz, Lummis—anyone else? Now, why are you sneering at them?
Regulatory attacks are another potential threat—a big one. This post is already too long; and I need to analyze the Lummis bill carefully, before applauding her too much. Let’s just say,
on a general note, I am concerned about the potential that legislation may draw Bitcoin into a regulatory quagmire, while tossing Bitcoiners a bone with some obvious things such as exempting small purchases from capital gains tax.
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