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Author Topic: BTC Value is Irrelevant  (Read 2096 times)
Cluster2k
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September 08, 2011, 02:12:48 AM
 #21

BTC value to fiat curency can be irrelevant, once the whole chains can operate in it.

Meaning:
You buy TV with BTC
Seller has bought it with BTC, also paid shipping with with BTC
TV manufacturer has bought coponents and labor with BTC
and so on

That's an easy one to answer: it will never happen because it can't happen.  If the employees at the retailer and manufacturer get paid in bitcoins, how do they pay income tax?  How is sales tax paid on the TV?  Governments will never accept bitcoins as payment just like gold, silver, diamonds etc are not usable as tax payments today.

Now it would be possible to get cute and say the employees don't have any income as they get paid in bitcoins instead of dollars, but try explaining that to a judge when the employee is taken to court for tax evasion (the representing lawyer will demand dollars instead of bitcoins too).

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Minsc
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September 08, 2011, 02:16:05 AM
 #22

Now it would be possible to get cute and say the employees don't have any income as they get paid in bitcoins instead of dollars, but try explaining that to a judge when the employee is taken to court for tax evasion (the representing lawyer will demand dollars instead of bitcoins too).

Stock options aren't taxed, right?  I heard Microsoft had a tax evasion scheme with stock options that was perfectly legal.  You could pay the employees minimum wage plus a bonus in bitcoins.

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September 08, 2011, 02:23:05 AM
 #23

The "real" economy:
You buy TV with a stolen credit card
Seller has bought it off the back of a truck, also claimed expenses on tax forms
TV manufacturer claimed double on insurance report and used child labor paid with (unnamed Asian currency)
and so on...

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
Cluster2k
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September 08, 2011, 06:10:02 AM
 #24

Now it would be possible to get cute and say the employees don't have any income as they get paid in bitcoins instead of dollars, but try explaining that to a judge when the employee is taken to court for tax evasion (the representing lawyer will demand dollars instead of bitcoins too).

Stock options aren't taxed, right?  I heard Microsoft had a tax evasion scheme with stock options that was perfectly legal.  You could pay the employees minimum wage plus a bonus in bitcoins.

Stock options usually aren't taxed (check your local tax laws) as they're worthless until the stock's price reaches a certain value for you to cash them in.  Microsoft's scheme wasn't a tax evasion scheme: it was an incentive scheme and a way to pay sub par wages all in one.  If the employees built successful products the share price went up and options could be cashed in.  Likewise Microsoft could promise lots of options while paying lower wages on the bet that the option price would never be reached (unknown to the employee).  Stock options for CEOs and boards serve a different purpose.  They are a strong incentive to raise the share price by any means possible.

Like it or not, there's no way of avoiding the real economy and other currencies when dealing with bitcoins, therefore bitcoins' value versus other currencies will always be very important.  While bitcoins can fluctuate 15%+ on a daily basis no one will seriously use them for commerce unless: the bitcoin price carries a large premium over the dollar price (why use bitcoins then?), or the merchant employs dynamic pricing that changes every few hours or even minutes (and immediately heads over to MtGox to cash out).

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Minsc
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September 08, 2011, 06:12:26 AM
 #25

Like it or not, there's no way of avoiding the real economy and other currencies when dealing with bitcoins, therefore bitcoins' value versus other currencies will always be very important.  While bitcoins can fluctuate 15%+ on a daily basis no one will seriously use them for commerce unless: the bitcoin price carries a large premium over the dollar price (why use bitcoins then?), or the merchant employs dynamic pricing that changes every few hours or even minutes (and immediately heads over to MtGox to cash out).

When someone buys a car or land, they have to report the value they bought it for and same for the person selling either of these.  How would they work with bitcoins?

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September 08, 2011, 09:51:32 AM
 #26

Currently all BTC are worth about $50 million.  If someone with $50 million were to come into the market today the price would double.
$50 mill would make the price go *much* higher than double. I've commented on a similar misunderstanding earlier: https://bitcointalk.org/index.php?topic=39797.msg485869#msg485869
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