The way it will play out

[nestor]

... Was always curious how the regulation would start out to be implemented.

Now, it became obvious. The miners and investors will not be taxed. The "average user" will be taxed.

For not being taxed miners and investors will agree first to integrate identification mechanisms into the block chain protocol. Never forget that mining is synonymous with validating transactions and transaction chain.

Only the majority of miners can decide about protocol changes by voting for or against a new validating functionality or new contract script. As mining becomes a more and more aggregated and an exclusive business the disparity between miners and users will increase.

Therefore my next step in curiosity will be about a potential splitting of mining and validating into two distinctive processes. It would level out the playing field for all bitcoin participants.

Let's see?

[franky1]

... Was always curious how the regulation would start out to be implemented.

Now, it became obvious. The miners and investors will not be taxed. The "average user" will be taxed.

For not being taxed miners and investors will agree first to integrate identification mechanisms into the block chain protocol. Never forget that mining is synonymous with validating transactions and transaction chain.

Only the majority of miners can decide about protocol changes by voting for or against a new validating functionality or new contract script. As mining becomes a more and more aggregated and an exclusive business the disparity between miners and users will increase.

Therefore my next step in curiosity will be about a potential splitting of mining and validating into two distinctive processes. It would level out the playing field for all bitcoin participants.

Let's see?

holding bitcoin is tax free.. converting it to fiat is taxed.. simples..
as for regulation. again this will only be regulated at the fiat conversion gateways.

do not panic with what other people will suggest will happen. its not as bad as you think

[hilariousandco]

holding bitcoin is tax free.. converting it to fiat is taxed.. simples..
as for regulation. again this will only be regulated at the fiat conversion gateways.

do not panic with what other people will suggest will happen. its not as bad as you think

This. Taxing it when you convert it to cash is pretty much the only way this will work.

[nestor]

Guys! To be charged in taxes in case of exchange into fiat will only be one of the regulation mechanisms. Why do you think the Asian and European financial policy makers started to define bitcoin as commodity and "other assets" like for example Sweden and Germany? Because owning bitcoins will force you to pay capital gains taxes first on the redeemers side - later on - on any kind of transaction. This implies also that ownership of bitcoins will become to be declared officially towards your local tax authorities.

This is simply obvious to anybody with the slightest idea about political economy. It's not about panic instead it's about being aware about fiscal consequences of the official statements and wording many national financial authorities made the recent weeks.

That's one thing. The other thing are several technological changes to the bitcoin protocol planned for version 0.9. E.g.:  things like the enabling of payment messages to sign payment requests. Sure that's a good thing and even necessary for merchants. But don't be naive, it also opens up a fabulous "regulation vector" into the bitcoin protocol. The ability to identify specific transactions additionally the free description field enabling everyone to add up to 80 bytes of whatever data to any transaction.

Wouldn't be too surprised if some regulators would start to track PaymentRequests including a user-friendly description of what the payment is meant for. Combine this tracking data with infos they will request from regulated bitcoin exchanges and la voila .....

[bitpop]

Pay your taxes people.

[bitgeek]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

[Kenshin]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

[bitpop]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

[BCB]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

[bitpop]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

Yeah bastards reported my eBay sales.

[BCB]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

Yeah bastards reported my eBay sales.

They are even reading your email (she the Shrem/Fiallia indictment).  No more hiding from the man.

[Mr. Socko]

so with all these replies what is the purpose and usefulness of crypto currencies? If I go and trade around physical gold and silver for goods and services locally or pay cash for something second hand, that would seem to be a more anonymous way to get away with not having to pay taxes and transact business than having to suddenly pay 35% capital gains tax when I go to purchase something on overstock.com (this is all theoretical, I don't actually have bitcoins and am not paying 800 bucks for one)

[BCB]

so with all these replies what is the purpose and usefulness of crypto currencies? If I go and trade around physical gold and silver for goods and services locally or pay cash for something second hand, that would seem to be a more anonymous way to get away with not having to pay taxes and transact business than having to suddenly pay 35% capital gains tax when I go to purchase something on overstock.com (this is all theoretical, I don't actually have bitcoins and am not paying 800 bucks for one)

If you goal it to remain anonymous and avoid taxes you are much better off to use cash. 

If you would like to quickly and seamlessly transact legally with individuals around the world you would want to use virtual currency.

If you are in an emerging nation and want access to the global economy use virtual currency. 

[bitgeek]

so with all these replies what is the purpose and usefulness of crypto currencies? If I go and trade around physical gold and silver for goods and services locally or pay cash for something second hand, that would seem to be a more anonymous way to get away with not having to pay taxes and transact business than having to suddenly pay 35% capital gains tax when I go to purchase something on overstock.com (this is all theoretical, I don't actually have bitcoins and am not paying 800 bucks for one)

Who says you have to buy a whole bitcoin. If you want to invest 50$ you'll get 50$ in bitcoin. There's no such thing like "the price of bitcoin is too high for me". People say things like that because they were used to the price <$100 for years. It may take some years for them to get used to mBtc.

[tvbcof]

... This is the 21st Century, there is no more anonymity.

As long as anonymity is not banned outright, then there will be ways to achieve it.  Technically it is easier to achieve than it is to unwind.

We are in a trough right now because the solutions to unwinding anonymity have developed rapidly and in the dark so people were unaware both of the erosion and of the danger the erosion posed.  If/when people are shaken awake some of the losses could be rolled back quickly I believe.

Again, the big question will be whether anonymity itself will be effectively outlawed and quashed from a natural rights perspective or whether there will be a backlash amongst the pubic which will keep it viable.  I'm not willing to make a call on this one way or another.

[ShadowOfHarbringer]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

Yeah bastards reported my eBay sales.

They are even reading your email (she the Shrem/Fiallia indictment).  No more hiding from the man.

Enough of this foolish conformist bullshit.

We can use CoinJoin, CoinSwap, CoinControl.
We can use GPG.
We can use Truecrypt.

If you let them read your email and steal your money, that's just your choice. They cannot force anybody to give up their Bitcoins. They cannot even prove that (careful)somebody has Bitcoins.

[BCB]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

Yeah bastards reported my eBay sales.

They are even reading your email (she the Shrem/Fiallia indictment).  No more hiding from the man.

Enough of this foolish conformist bullshit.

We can use CoinJoin, CoinSwap, CoinControl.
We can use GPG.
We can use Truecrypt.

If you let them read your email and steal your money, that's just your choice. They cannot force anybody to give up their Bitcoins. They cannot even prove that (careful)somebody has Bitcoins.

Charlie and DPR said things like this until they had them in a federal holding cell.

[phantomminer9]

Pay your taxes people.

I'd say don't convert to fiat, don't pay taxes, stay happy!

I totally agreed with you, why pay tax, so the government can use it to fund war, and other bad things.

Just pay your taxes. Yes you also have to pay capital gains when making a purchase.

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

Yeah bastards reported my eBay sales.

They are even reading your email (she the Shrem/Fiallia indictment).  No more hiding from the man.

Enough of this foolish conformist bullshit.

We can use CoinJoin, CoinSwap, CoinControl.
We can use GPG.
We can use Truecrypt.

If you let them read your email and steal your money, that's just your choice. They cannot force anybody to give up their Bitcoins. They cannot even prove that (careful)somebody has Bitcoins.

Eventually, we'll be able to use crypto to trade for anything.. that's the ultimate goal 

[franky1]

Paypal collects your National Tax ID and reports earnings to the respective governments.  Won't be long untill coinbase.com and circle.com and others exchangers do the same.  There will be no hiding your virtual currency from the powers that be.  Even if you keep it all in virtual currency, overstock and tiger direct need an address to ship you your goods.  This is the 21st Century, there is no more anonymity.

this is only because paypal uses FIAT!!!!!! not bitcoin

bitcoin does not belong to governments.. think about it

[BTCisthefuture]

Hold your bitcoins and wait for exchanges in tax haven countries to open up so you can cash out tax free   .. Hahah just an idea.

But yeah,  if you make capital gains on bitcoins , be safe and pay your taxes.