The real battle and the dark future of bitcoin

[getreal]

No, it is not about your silly scaling issues or other internal politics. The battle I talk about is still far way, but it is inevitable. It is when bitcoin comes out of its darknet markets, its amusing mathematics, its online life and faces the real world of salary payments, utility bills, loan payments, school and college payments, buying home, car, groceries and gadgets. That's how a common man interacts with money and payments.

There is a spoilt, rebellious kid who was never taught any manners or real world skills, but extremely pampered and praised all along in his fortified play room, and then on one fine day he was pushed out to face the real world.

What's the issue here? The issue is deep enough to lie at the philosophy of the bitcoin. It hits right where all good things for bitcoin come from.

The little kid faces two strangers on the street - the tax man and the government. The little kid says "I don't need you. I don't need to show my money or transactions to you". Then a criminal emerges from shadows, points a gun at the kid, snatches his bitcoin wallet and disappears. The kid cries and blames government for not protecting him.

Then the kid finally learns some manners the hard way, and agrees to pay taxes on his bitcoin income. And agrees to show all his transactions. And wallet details. People are now forced to use a single bitcoin address per person and that address is linked to their passport and their other national identities. Every bitcoin transaction must go through a government verification for identifying the parties involved. All good.

All lived happily ever after.

Wait, the kid then wonders - why am I using bitcoin? with all the extra difficulty. Oh, that's because it is mathematically beautiful. isn't it? Those 64 hex letters with random beauty. Ah, I can keep looking at them admiring their beauty forever.

The human society has come a long way through the jungle life, cave life, tribal settlements, civilisations, cities, nations and governments. Bitcoin, while appearing to be ultra high-tech, full with mathematics and cryptography, it is essentially a throw back to jungle life as far as the social life and governance is concerned. Bitcoin abhors governance. It ignores the need to know each other. It rejects monitoring and traceability. It want to break the government and thereby it encourages the law of jungle.

So, you say that tax man need not be concerned about your bitcoin income. Okay, so how should we tax people? How should businesses pay tax? We need tax to support government and community development. And we need government.

Lack of tracking in money movement clashes with the very existence of government. Enforcing tracking in bitcoin shakes the very foundations of bitcoin. That's the battle I was talking about. The new kid on the block has no way of fighting it. Forget winning. I won't be surprised if all the bitcoin owners could be seen as criminals, and forced to do only darknet transactions forever.

Meanwhile, the kid will have lots of fun in his mathematical cradle, playing with his crypto toys, and musical noise and excitements blaring from online forums while a crowd of crypto coin babies sing and dance around him, and pooping everywhere. All this happening in a casino, where all the people amazed by their smartphone and internet magic, keep placing bets on which baby will poop next.

Cryptography and math are pure and invincible. Worshipping them, is no different from worshipping a rock, fire or the Sun. Humans are biological creatures. All value traces down to biological comfort and well-being. Meet the real world. Get real.

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[Xavofat]

So, you say that tax man need not be concerned about your bitcoin income. Okay, so how should we tax people? How should businesses pay tax? We need tax to support government and community development. And we need government.

Lack of tracking in money movement clashes with the very existence of government. Enforcing tracking in bitcoin shakes the very foundations of bitcoin. That's the battle I was talking about. The new kid on the block has no way of fighting it. Forget winning. I won't be surprised if all the bitcoin owners could be seen as criminals, and forced to do only darknet transactions forever.

Physical cash is completely untraceable.  Bitcoin is not completely untraceable.  So supposedly not being traceable sure as fuck doesn't make Bitcoin unusable or mean that it's restricted to the "new kid on the block".

The point isn't anonymity.  Pseudonymity is just a helpful side effect which allows a transition to digital cash without letting governments have unlimited power over casual transactions.

The point is to remove the third parties.  The banks, the companies (Android Pay, Apple Pay, PayPal) - all of which charge you crazy fees for using their service.  It's also to remove the banks' monopoly over the money supply and their ability to conjure up intrinsically worthless fiat currency out of thin air.  This is something that can't be done with BTC.

Meanwhile, the kid will have lots of fun in his mathematical cradle, playing with his crypto toys, and musical noise and excitements blaring from online forums while a crowd of crypto coin babies sing and dance around him, and pooping everywhere. All this happening in a casino, where all the people amazed by their smartphone and internet magic, keep placing bets on which baby will poop next.

Crypto has the advantage of people who join early having more crypto to spend later.  That's just a means of encouraging adoption, and while it's a speculative instrument as well, Bitcoin is still working just as it always has.

Cryptography and math are pure and invincible. Worshipping them, is no different from worshipping a rock, fire or the Sun.

Rocks, fire and the Sun can't transfer billions of Big Macs worth of currency around the world with almost no transaction costs, within a few hours.

[BitcoinHodler]

you are making two big wrong assumptions.
the first being bitcoin is only being used in darknet, which is wrong since that usage is very small and negligible. and instead the rest of the usages you listed has been growing.

the second assumption you made is that people are using bitcoin just because they don't want to pay taxes! first of all there is nothing wrong with paying taxes, if you have problems with that then you have problems with some fundamentals of society.
secondly there are a lot more to bitcoin than just "tax evasion"! there are lots more. things like removing third parties as @Xavofat mentioned. things such as reversing the "trust" part between merchants and customers as the white paper mentions. or the fact that you have 100% control over your money in the safest manner possible.

[masterbt]

Any currency that grows fast always have a risk. Now, few countries are started accepting it. Might be, we are seeing some sort of tracking will be pushed. It remains to be seen, how well we bitcoiners stand against it.

[Mandoy]

The decentralization on bitcoin doesnt mean being independent from the government but it is a financial decentralization, a decentralization from the corrupt banking system. If bitcoin will be taxable, traceable by the government and must follow the rules and policies of the government then what is wrong with that. It is normal for a currency to be regulated by the state otherwise if it is not regulated it may be banned in the country and a great deal of damage will be brought upon to bitcoin. With the states interfering it means we have the support of the state that they recognize the value of bitcoin and its role on the economy and society but to bring order policies, taxation and regulation must be put in place.

[getreal]

Physical cash is completely untraceable.  Bitcoin is not completely untraceable.  So supposedly not being traceable sure as fuck doesn't make Bitcoin unusable or mean that it's restricted to the "new kid on the block".

The point isn't anonymity.  Pseudonymity is just a helpful side effect which allows a transition to digital cash without letting governments have unlimited power over casual transactions.

The point is to remove the third parties.  The banks, the companies (Android Pay, Apple Pay, PayPal) - all of which charge you crazy fees for using their service.  It's also to remove the banks' monopoly over the money supply and their ability to conjure up intrinsically worthless fiat currency out of thin air.  This is something that can't be done with BTC.
Crypto has the advantage of people who join early having more crypto to spend later.  That's just a means of encouraging adoption, and while it's a speculative instrument as well, Bitcoin is still working just as it always has.

Cryptography and math are pure and invincible. Worshipping them, is no different from worshipping a rock, fire or the Sun.

Rocks, fire and the Sun can't transfer billions of Big Macs worth of currency around the world with almost no transaction costs, within a few hours.

Cash being untraceable is not a justification for bitcoin to be even more untraceable. World is trying to move away from cash, and bitcoin brings in even more un-traceability. Not acceptable. Did you read about Panama Papers and those AML activities? Bitcoin can increase such stuff by a thousand-fold. Does all this make governments admire the new crypto baby and hug it?

Low transaction fees alone (if it is possible at all), can't be worthy enough compensation for loosing all traceability.

Tax evasion is not the goal. But when it is possible, it becomes the goal for everyone. It is funny that bitcoin is built on lack of trust, and you folks tell me to trust people to pay their taxes? So funny.

[getreal]

you are making two big wrong assumptions.
the first being bitcoin is only being used in darknet, which is wrong since that usage is very small and negligible. and instead the rest of the usages you listed has been growing.

For me, darknet meass, any payment that is made without traceability. All bitcoin transaction can potentially untrackable and hence fall into darknet category. Untraceable money movement is plain illegal for two reasons: it could be used for money laundering, or it could be used for bad things.

the second assumption you made is that people are using bitcoin just because they don't want to pay taxes! first of all there is nothing wrong with paying taxes, if you have problems with that then you have problems with some fundamentals of society.

Society has trust problems. That is why bltcoin uses mining and blockchain. Now you are telling me to trust the society to pay their taxes, while they can easily evade them.

secondly there are a lot more to bitcoin than just "tax evasion"! there are lots more. things like removing third parties as @Xavofat mentioned. things such as reversing the "trust" part between merchants and customers as the white paper mentions. or the fact that you have 100% control over your money in the safest manner possible.

Or in other words, you don't know how to deal with it.

[tobs]

I think bitcoin is just a new idea that have emerged or a world that one can send someone from the other side of Earth some money in a matter of a moment. Bitcoin introduced digital currency as an idea. There is no need for banks or any other third parties watching over your money. With all these things that you have pointed out I can also see that bitcoin will have problems coming into the mainstream. Everyone here imagines how in ten years there will be no fiat and only bitcoin will survive and show everyone what it's worth, but I think that instead of fiat dollar we will end up with dollarcoin or other cryptocurrency or altcoin that will be hosted by the government so that they can easily take fees and taxes from our transactions and wallets. Because they need to do this, we can't create a world without taxes and with unknown amount of money in our digital wallets.

[getreal]

The decentralization on bitcoin doesnt mean being independent from the government but it is a financial decentralization, a decentralization from the corrupt banking system. If bitcoin will be taxable, traceable by the government and must follow the rules and policies of the government then what is wrong with that. It is normal for a currency to be regulated by the state otherwise if it is not regulated it may be banned in the country and a great deal of damage will be brought upon to bitcoin. With the states interfering it means we have the support of the state that they recognize the value of bitcoin and its role on the economy and society but to bring order policies, taxation and regulation must be put in place.

So how do you imagine regulation to be a possibility, if not defeating all the fundamental principles of bitcoin? Start with tracking wallets and addresses.

[getreal]

I think bitcoin is just a new idea that have emerged or a world that one can send someone from the other side of Earth some money in a matter of a moment. Bitcoin introduced digital currency as an idea. There is no need for banks or any other third parties watching over your money. With all these things that you have pointed out I can also see that bitcoin will have problems coming into the mainstream. Everyone here imagines how in ten years there will be no fiat and only bitcoin will survive and show everyone what it's worth, but I think that instead of fiat dollar we will end up with dollarcoin or other cryptocurrency or altcoin that will be hosted by the government so that they can easily take fees and taxes from our transactions and wallets. Because they need to do this, we can't create a world without taxes and with unknown amount of money in our digital wallets.

If the fees and taxes are unavoidable, and if bitcoin becomes yet another fiat currency, why should I use bitcoin? Speed? Banks can do better soon. More importantly we are back to trusting government. Do we still need a blockchain? Essentially, bitcoin has no utility advantage, except being used for speculation.

[South Park]

Op you bring some good points, but if a person thinks bitcoin is going to change to accommodate him or any other entity then they are mistaken, bitcoin is not going to change to accommodate governments or to allow chargebacks that is the whole point of bitcoin and those that don’t adapt to bitcoin will have to left bitcoin, this is going to stall adoption but the devs are firm about it, and if the government tries to regulate bitcoin then another crypto will emerge that will combat whatever measure they try to impose on bitcoin.

[Xavofat]

you are making two big wrong assumptions.
the first being bitcoin is only being used in darknet, which is wrong since that usage is very small and negligible. and instead the rest of the usages you listed has been growing.

For me, darknet meass, any payment that is made without traceability. All bitcoin transaction can potentially untrackable and hence fall into darknet category. Untraceable money movement is plain illegal for two reasons: it could be used for money laundering, or it could be used for bad things.

You don't even know how Bitcoin works.  It's not anonymous, it's pseudonymous, and blockchain analysis tools from governments are quite good.  If used properly people can sort of reach anonymity, but it's quite difficult.

It's important for you to understand that drug transactions happen with or without Bitcoin, and that even now the vast majority of illegal transactions are done offline. 

the second assumption you made is that people are using bitcoin just because they don't want to pay taxes! first of all there is nothing wrong with paying taxes, if you have problems with that then you have problems with some fundamentals of society.

Society has trust problems. That is why bltcoin uses mining and blockchain. Now you are telling me to trust the society to pay their taxes, while they can easily evade them.

They can't "easily evade them".  What will happen if Bitcoin grows is that exchanges are regulated so that any transactions converting to fiat are subject to capital gains tax.  As for VAT, it wouldn't be affected very much.  People pay in cash at shops, but because the shops are regulated, they still pay VAT.

secondly there are a lot more to bitcoin than just "tax evasion"! there are lots more. things like removing third parties as @Xavofat mentioned. things such as reversing the "trust" part between merchants and customers as the white paper mentions. or the fact that you have 100% control over your money in the safest manner possible.

Or in other words, you don't know how to deal with it.

Deal with what?  Sovereignty of funds is the most important thing in a cash system.  Moving into a digital age, you need to have a system which doesn't rely on someone else to hold your funds for you.  You can hoard gold in your house and you should be able to do the same thing with digital money.

[megynacuna]

Any currency that grows fast always have a risk. Now, few countries are started accepting it. Might be, we are seeing some sort of tracking will be pushed. It remains to be seen, how well we bitcoiners stand against it.

It depends on the acceptance of the currency and I think Bitcoin has been well accepted globally but it hasn't aged well yet that's why people are skeptical and attach some amount of fear to it.

[Kevondo]

Any currency that grows fast always have a risk. Now, few countries are started accepting it. Might be, we are seeing some sort of tracking will be pushed. It remains to be seen, how well we bitcoiners stand against it.

yes you are right and I do agree with you that every currency that will enlarge your money will have some risk that it will make you loss somehow but it will give you benefit and will let you earn after the time of the high price that will be the best time you will be able to earn good income now as you said that a lot of countries are accepting bitcoin and it made bitcoin more value able

[Tyrantt]

"No, it is not about your silly scaling issues or other internal politics. The battle I talk about is still far way, but it is inevitable. It is when bitcoin comes out of its darknet markets, its amusing mathematics, its online life and faces the real world of salary payments, utility bills, loan payments, school and college payments, buying home, car, groceries and gadgets. That's how a common man interacts with money and payments."

if you can replace bitcoin with something else in this argument and it can still be used, it's not valid. Also, bitcoin wasn't created and designed SPECIALLY for deep web, they've adopted it because they've seen the opportunity to do so. Now, you see there actually is a school in my country where you can pay the scholarship in bitcoin, a restaurant where you can pay in bitcoin, lamborghini started accepting bitcoin and pretty sure all of the rest are soon to come. So.. kind of wrong from the start.

[getreal]

lamborghini started accepting bitcoin and pretty sure all of the rest are soon to come. So.. kind of wrong from the start.

If lamborghini accepts bitcoin payments, isn't it same as accepting cash? How does government track it for sales tax?

[getreal]

They can't "easily evade them".  What will happen if Bitcoin grows is that exchanges are regulated so that any transactions converting to fiat are subject to capital gains tax.  As for VAT, it wouldn't be affected very much.  People pay in cash at shops, but because the shops are regulated, they still pay VAT.

I'm talking about the situation where you don't need to cashout bitcoin into fiat currency, and you can pay for everything with bitcoin. How do you define income for tax purposes? A business pays fo raw material and labour in bitcoins and sells goods and services for bitcoins. Do you think government can track the offline wallets and addresses in them?

[getreal]

Any currency that grows fast always have a risk. Now, few countries are started accepting it. Might be, we are seeing some sort of tracking will be pushed. It remains to be seen, how well we bitcoiners stand against it.

Due to its design, there is no middle path or negotiation. Either bitcoin gets crushed or it will replace fiat currency. The second option is feasible only when the government doesn't need tax money and doesn't need to monitor money movements. When govt can't track money, they don't know why the payments are being made. Governance fails due to lack of tracking and lack of funds.

[mrcash02]

It's your right to defend the government and taxes if you believe it, the point is that here many people don't want it and don't believe on it anymore, as the past experiences weren't good (people pay tax to have low quality services back, people have difficulty to open their businesses as they need to pay lots of fees, people fund dictatorships without their own wish).

Sorry, but the little kid in my opinion is you who believes on this wonderful world of regulamentations and corruption from an elite who created a modern way to "enslave" people. However I agree many people on this decentralized world think only on themselves and don't have any compassion and empathy for each other.

[franky1]

many people think bitcoin has to within 2 years become the "gigabytes by midnight" concept of replacing all fiat/visa transactions of the world.
over throwing governments etc.

the reality should be that bitcoin should remain outside of government jurisdiction and be more of the 'travellers cheques' replacement. where anyone can access and use them in any country freely without all the tax government bureaucracy.

it doesnt require jumping to 7billion people storing their entire lifetimes wealth on bitcoin. but instead treated as a new separate currency working outside/alongside fiat as a optional choice. something that allows people to privately own without control and works across borders