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Author Topic: 2013-03-26 Why Bitcoin Can No Longer Work as a Virtual Currency, in 1 Paragraph  (Read 697 times)
zeroday
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March 27, 2014, 07:28:10 AM
 #1

http://www.theatlantic.com/technology/archive/2014/03/why-bitcoin-can-no-longer-work-as-a-virtual-currency-in-1-paragraph/359648/

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The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.  If I spend Bitcoin A, which I bought at $10, but is now worth $400, I’ve got a very different tax treatment than if I spend Bitcoin B, which I bought at $390. […] This means Bitcoins are not fungible, and that makes it unworkable as a currency.


LOL. How stupid is the author if he doesn't see the benefit of having PROFIT from bitcoin bought at $390 no matter of taxes Smiley
Isn't it obvious that using bitcoins that doubled in price and pay capital gain taxes is anyway better than holding wealth in static dollar bills.

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March 27, 2014, 08:08:43 AM
 #2

http://www.theatlantic.com/technology/archive/2014/03/why-bitcoin-can-no-longer-work-as-a-virtual-currency-in-1-paragraph/359648/

Quote
The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.  If I spend Bitcoin A, which I bought at $10, but is now worth $400, I’ve got a very different tax treatment than if I spend Bitcoin B, which I bought at $390. […] This means Bitcoins are not fungible, and that makes it unworkable as a currency.


LOL. How stupid is the author if he doesn't see the benefit of having PROFIT from bitcoin bought at $390 no matter of taxes Smiley
Isn't it obvious that using bitcoins that doubled in price and pay capital gain taxes is anyway better than holding wealth in static dollar bills.


That was just example - it would be the same if you bouth BTC at $390 and then bought coffee with it when it was at $10. And it is also about very small differences - it is a red tape hell.
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March 27, 2014, 02:00:30 PM
 #3

You have to be sensible about reporting.  You aren't going to report every small transaction and no merchant is going to report you either.

For larger transactions, do the sums and pay your taxes.

Dishonest folk might move older coins before spending them -- how can the IRS possibly prove one of those transfers wasn't Joe Tax Dodger purchasing the coins for cash, for example?

When Bitcoin becomes more widely used and accepted, the IRS will have to adapt its approach.  It can't ignore the fact that people around the world use Bitcoin as a currency.
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March 27, 2014, 04:53:21 PM
 #4

Merchant have to file only transactions over $600, so there is no problem for the most of bitcoin businesses.
And it's obvious that "coffee" purchases can be just disregarded as it's impossible to track them.

BTW, it would be real fun to present IRS half-mile long paper roll with all your annual bitcoin microtransactions Smiley

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March 27, 2014, 05:12:57 PM
 #5

Bitcoin is going to work just fine.  The article he should've wrote is why the legacy tax system is no longer compatible with modern money.

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March 28, 2014, 05:04:52 AM
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Bitcoin is going to work just fine.  The article he should've wrote is why the legacy tax system is no longer compatible with modern money.

good point
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March 28, 2014, 05:56:03 AM
 #7

Even of the author assertions are considered correct the title should be at most:

"Why Bitcoin Can No Longer Work as a Virtual Currency *in the USA*"

So many UScentric journalists.



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cryptoanarchist
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March 28, 2014, 02:13:56 PM
 #8

To pay taxes is to be a slave.
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