Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules(marketwatch.com)
marketwatch.com
Senators move to exempt Bitcoin, crypto miners from proposed U.S. tax rules
https://www.marketwatch.com/story/senators-move-to-exempt-bitcoin-crypto-miners-from-proposed-u-s-tax-rules-11628102530
245 comments
I guess we need a proper CO2 tax to encourage better technology than proof of work
A proper CO2 tax wouldn't be disruptive to bitcoin, bitcoin only cares that everyone pays the same price for electricity. If the absolute cost of electricity goes up, nothing changes.
Unless the tax applies globally then they’ll just flee to Kazakhstan. Oh wait; they won’t have to flee far.
> If the absolute cost of electricity goes up, nothing changes.
The cost of electricity does impact the cost per transaction on the network, does it not?
The cost of electricity does impact the cost per transaction on the network, does it not?
nope, transactions clear at a rate unrelated to mining(so long as at least 1 person is mining).
The only thing that impacts transaction costs is how many other people are trying to clear their own transactions and bidding up the sat/vbyte rate.
The only thing that impacts transaction costs is how many other people are trying to clear their own transactions and bidding up the sat/vbyte rate.
Either transaction costs go up, or electricity usage per transaction goes down. Anything else just doesn’t add up.
Most coiners conveniently ignore block reward when calculating the cost of a transaction - that's your missing factor. Consider that the only reason you need to secure the blockchain is because it is mutable, if it were immutable it would be sufficient to simply publish it with a known hash. Ergo, 100% of the energy consumption of the Bitcoin network is attributable to transaction processing and therefore can be quantized into and proportionally assigned to transactions.
So yes, the transaction cost does scale with consumption of resources, albeit in a tail-wagging-the-dog kind of way, because the price of the block reward changes with price allowing more resources to be consumed.
Currently the actual cost of a Bitcoin transaction is $2.44 in direct costs + (6.25 * 41000)/2750 = $93 in indirect costs, so right around $95.44 - and that's using I believe the maximum possible transactions per block, the reality is it's more expensive still.
Move over Bank of America, there's a new king in town.
TotalCost = DirectCost + ProportionalAllocationOfBlockReward
So yes, the transaction cost does scale with consumption of resources, albeit in a tail-wagging-the-dog kind of way, because the price of the block reward changes with price allowing more resources to be consumed.
Currently the actual cost of a Bitcoin transaction is $2.44 in direct costs + (6.25 * 41000)/2750 = $93 in indirect costs, so right around $95.44 - and that's using I believe the maximum possible transactions per block, the reality is it's more expensive still.
Move over Bank of America, there's a new king in town.
You can do 1+ million lightning network transactions that will settle as 1 transaction on the BTC blockchain, so ~$93/1,000,000? Sounds amazingly cheap for uncensorable transactions.
ESG people are trying to solve something that is already solved. POW is here to stay and will scale tremendously well as we all move to layer 2.
ESG people are trying to solve something that is already solved. POW is here to stay and will scale tremendously well as we all move to layer 2.
As I mentioned upthread I can't possibly disagree more. PoW is designed specifically not to scale. The higher the price the more it wastes. It's an embarrassingly poor technology.
You completely synthesized $93/1000000 obviously, and as we discussed it would take 75 years to open a channel for everyone alive today and $300,000,000,000.
You completely synthesized $93/1000000 obviously, and as we discussed it would take 75 years to open a channel for everyone alive today and $300,000,000,000.
[deleted]
Sorry, that's not how it works. The network adapts the difficulty to target 1 new block every 10 minutes.
More mining → higher difficulty → higher electricity usage per block.
The transaction costs paid are independent of difficulty or number of miners. Transaction cost depends on the demand. A block has a limited size in bytes. If more people want to send transactions than there is room in the current block, the miner that mines that block will include the transactions that include the highest fee.
When sending a transaction, you can choose that fee. Higher fee → higher chance of being included. Bitcoin clients will usually calculate a reasonable fee for you, based on the demand.
More mining → higher difficulty → higher electricity usage per block.
The transaction costs paid are independent of difficulty or number of miners. Transaction cost depends on the demand. A block has a limited size in bytes. If more people want to send transactions than there is room in the current block, the miner that mines that block will include the transactions that include the highest fee.
When sending a transaction, you can choose that fee. Higher fee → higher chance of being included. Bitcoin clients will usually calculate a reasonable fee for you, based on the demand.
Miners don't set the transaction cost, they can only maximize fee revenue by picking the highest fee transactions at that time in the mempool. So, if it becomes unprofitable or not profitable enough for the taste of the miner, hashrate will go down, which will lead to a difficulty adjustment, which means overall electricity usage per transaction goes down.
So its scenario #2 in your comment.
So its scenario #2 in your comment.
The network self-adjusts difficulty so a block is mined roughly every ten minutes. A block has a maximum size of data in it, pretty much the maximum amount of transactions per block. As long as there aren't massive fluctuations to the mining rate, the rate of transactions will remain relatively constant.
As long as there is free space in the blocks, average transaction fees will remain low. If there are a lot of transactions in the mempool waiting to be included in a block, users will need to submit transactions with higher related fees to ensure they get picked to be included in a block soon.
Remember, miners don't necessarily set transaction fees. Users choose what they're willing to pay for their transactions, essentially placing a bid. Miners choose the transactions that maximize the fees per block. Miners always want as full of blocks as possible because there will only be a block roughly every 10 minutes.
As long as there is free space in the blocks, average transaction fees will remain low. If there are a lot of transactions in the mempool waiting to be included in a block, users will need to submit transactions with higher related fees to ensure they get picked to be included in a block soon.
Remember, miners don't necessarily set transaction fees. Users choose what they're willing to pay for their transactions, essentially placing a bid. Miners choose the transactions that maximize the fees per block. Miners always want as full of blocks as possible because there will only be a block roughly every 10 minutes.
The cost of electricity (coupled with the rewards and cost of hardware) changes how profitable mining is. The more profitable the more players. The more players the more transaction throughput. This is exactly why miners have bought powerplants and why they operate in locations with cheap electricity, because it makes it more profitable for them. Bitcoin mining is directly related to the cost of electricity.
That said, not every cryptocurrency is reliant upon brute forcing hashing algorithms to verify.
That said, not every cryptocurrency is reliant upon brute forcing hashing algorithms to verify.
It's the same transaction throughput regardless of the number of miners.
Same transaction throughput, but not same security.
Right people say that, but here in the real world we usually define some sense of sufficiency. Just adding more "security" by burning up all the worlds coal at some point has no meaningful benefit. This is just a nice narrative. Security is good -> more security is better no matter the externalities is a terrible way of looking at the current situation.
We don't make seatbelts out of titanium 8 inches thick with their own airbags when they're mounted in a go-kart.
When the hash rate dropped what, 75%, off the back of the China exodus literally nothing happened.
tl;dr: Same transaction throughput, same security, just less efficient.
We don't make seatbelts out of titanium 8 inches thick with their own airbags when they're mounted in a go-kart.
When the hash rate dropped what, 75%, off the back of the China exodus literally nothing happened.
tl;dr: Same transaction throughput, same security, just less efficient.
ETH PoS mainnet transition is underway and will be completed early 2022. With this holders of ETH will be able to earn fees from transactions, just by running an application on their standard normal computer. The only encouragement you need to move off of POW is profit motive.
Hasn’t PoS been something “in the works” for ETH for something like 6 years now[1]? I don’t think anything guarantees its delivery in early 2022, it all seems like hopeful speculation until they deliver something.
[1] This stackexchange question dates back to 2016, the earliest evidence I could find of ETH proposing PoS. https://ethereum.stackexchange.com/questions/9/why-does-ethe...
[1] This stackexchange question dates back to 2016, the earliest evidence I could find of ETH proposing PoS. https://ethereum.stackexchange.com/questions/9/why-does-ethe...
This time it's very different. There are billions of dollars of ETH locked up in the staking contract, and proof of stake has been live and operating on the beacon chain for many months.
it took a long time to work it out, but it is running on the beacon chain and the consensus upgrade spec has now been merged: https://github.com/ethereum/EIPs/pull/3675
Haven't they been saying POS will be "ready soon" for years? Seems like maybe vaporware used for hype?
"The Ethereum proof of stake date has been set for December 1, 2020. While the proof of stake Ethereum date was originally set for January 2020, this deadline was missed."
https://www.exodus.com/blog/ethereum-proof-of-stake-date/
"The Ethereum proof of stake date has been set for December 1, 2020. While the proof of stake Ethereum date was originally set for January 2020, this deadline was missed."
https://www.exodus.com/blog/ethereum-proof-of-stake-date/
PoS is already working in Cardano, Tezos, and Algorand (among others).
Is that what a cursory Google search brings up? It actually did launch in December 2020, so that's awkward.
Some HN users are staking Eth and earning on Eth 2.0 contract, which functions on the Beacon Chain.
Both chains have not been merged yet, far from vaporware so I guess last decade called and wants its arguments back.
Some HN users are staking Eth and earning on Eth 2.0 contract, which functions on the Beacon Chain.
Both chains have not been merged yet, far from vaporware so I guess last decade called and wants its arguments back.
There's a button you can click to stake ethereum on Coinbase, which seems a bit past the vapor stage.
So do you think Eth miners will just write off their expensive GPUs and throw them into trash bin? It is rather obvious that they will switch to either fork (less probable) or to next best token (more probable).
There's plenty of PPOS systems that aren't as resource intensive. ETH2 doesn't require POW. Algorand is PPOS and built a contract into the leger to offset carbon emissions for the electric costs, making it carbon neutral or negative.
There is nothing in POW that requires CO2 emissions.
But the core principle of Proof of Work is wasting energy. If it takes from green sources, that just means those green sources won't be available to push out polluting ones. Combine this with buildup of polluting sources as backups for intermittent ones...
The Sun is wasting energy. Did you know that only like 0.0001% of the energy radiated by the Sun makes it to the Earth?
Proof of Work doesn't waste energy. It uses energy to secure a distributed ledger.
Proof of Work doesn't waste energy. It uses energy to secure a distributed ledger.
No, there is no waste. It is a very efficient conversion of energy to security of the ledger.
And with that ledger instead of all the wars and waste generated by manipulatable central bank ledgers it’s a win.
And with that ledger instead of all the wars and waste generated by manipulatable central bank ledgers it’s a win.
1. There is nothing efficient about wasting that much electricity on securing a ledger that can handle single-digit transactions per second.
2. The needs of central banks don't start wars, the needs of politicians, warhawk nationalists, and the needs of modern industrial economies do. [1] Unless BTC somehow magically gets rid of politicians, nationalism, or of our addiction to oil, that's not going to change.
[1] The US didn't invade Grenada because of the Fed. The USSR didn't invade Afghanistan on behalf of Gosbank. China didn't invade Tibet to fix the balance sheet of the PBC. Vietnam didn't fight a war with its occupiers, and then a civil war, and then a war with Cambodia, and then a war with China, because it was unhappy with the Dong to USD exchange rate. The US participated in that civil war because of domino theory, not because of its departure from the gold standard. The list goes on and on. [2]
[2] Wars aren't fought over currencies, wars are fought over territory, pan-ethnic nationalism, to increase the internal popularity of a warhawk, to maintain a hegemony, to impose one's religion on another, to expel unwanted people from a territory, etc, etc, etc. Bitcoin solves none of these problems.
2. The needs of central banks don't start wars, the needs of politicians, warhawk nationalists, and the needs of modern industrial economies do. [1] Unless BTC somehow magically gets rid of politicians, nationalism, or of our addiction to oil, that's not going to change.
[1] The US didn't invade Grenada because of the Fed. The USSR didn't invade Afghanistan on behalf of Gosbank. China didn't invade Tibet to fix the balance sheet of the PBC. Vietnam didn't fight a war with its occupiers, and then a civil war, and then a war with Cambodia, and then a war with China, because it was unhappy with the Dong to USD exchange rate. The US participated in that civil war because of domino theory, not because of its departure from the gold standard. The list goes on and on. [2]
[2] Wars aren't fought over currencies, wars are fought over territory, pan-ethnic nationalism, to increase the internal popularity of a warhawk, to maintain a hegemony, to impose one's religion on another, to expel unwanted people from a territory, etc, etc, etc. Bitcoin solves none of these problems.
Wars are used to force citizens to give up their labour for free to the state. In a country with financial mismanagement wars can be used to erase debts.
The US does and will go to war if it feels its dollar/oil hedgemony is threatened. if the dollar demand/circulation outside US falls for any reason, it will cause hyperinflation within the US economy. So they have to constantly threaten/intimidate other countries.
The US does and will go to war if it feels its dollar/oil hedgemony is threatened. if the dollar demand/circulation outside US falls for any reason, it will cause hyperinflation within the US economy. So they have to constantly threaten/intimidate other countries.
> Wars are used to force citizens to give up their labour for free to the state.
Wet streets don't cause rain, and wars aren't started in order to collect taxes. Wars are started to pursue particular goals, many of which I have listed in my prior post.
> The US does and will go to war if it feels its dollar/oil hedgemony is threatened.
This is an interesting, and oft-repeated theory, that, unfortunately does not survive contact with history. It's not a strong explanation for the majority of the conflicts that the US has been involved in. It is not remotely an explanation for the majority of the conflicts that other countries are involved in.
Which dollar/oil hegemony is Russia trying to maintain in Crimea? China in Tibet? USSR in Afghanistan? Argentina in the Falklands? Sudan in Darfur? Israel in Lebanon? Saudi Arabia in Yemen? ISIS in Syria?
Never mind that BTC doesn't do a thing about the dependency of industrialized sociaties on oil, minerals, fresh water, and other limited material resources.
Wet streets don't cause rain, and wars aren't started in order to collect taxes. Wars are started to pursue particular goals, many of which I have listed in my prior post.
> The US does and will go to war if it feels its dollar/oil hedgemony is threatened.
This is an interesting, and oft-repeated theory, that, unfortunately does not survive contact with history. It's not a strong explanation for the majority of the conflicts that the US has been involved in. It is not remotely an explanation for the majority of the conflicts that other countries are involved in.
Which dollar/oil hegemony is Russia trying to maintain in Crimea? China in Tibet? USSR in Afghanistan? Argentina in the Falklands? Sudan in Darfur? Israel in Lebanon? Saudi Arabia in Yemen? ISIS in Syria?
Never mind that BTC doesn't do a thing about the dependency of industrialized sociaties on oil, minerals, fresh water, and other limited material resources.
Layer 1 transactions are not necessarily 1 to 1 transactions. They can be settling millions of transactions in Layer 2 (lightning). It helps to think of layer 1 transactions as a settlement layer.
Bitcoin is the single least efficient system ever conceived of or reduced to practice by mankind.
Is there a more efficient system to arrive at consensus of a state in a distributed, trust-less, permission less manner?
Well there's proof of stake. However, whether alternatives exist or not has no bearing on the efficiency of a system.
well it does matter. you can't use the words "less efficient" or "more efficient" if there are no alternatives with similar properties.
Thermal efficiency is an absolute - units of energy expended vs work achieved. There is an alternative: proof of stake. Or removing certain constraints on the problem space. A different approach to solving the problem is absolutely an alternative. Visa is an alternative. The extant banking system is an alternative.
You can't say how efficient it is without calculating how layer 2 scaling affects per transaction energy usage. You can do millions of layer 2 transactions that eventually settle as 1 transaction on the main chain.
You can do “layer 2” transactions that settle on ACH or wire transfers, like Venmo or square cash, what’s your point? This is just more shameful greenwashing to pump up bag.
You would have to do literally millions per on chain transaction using bitcoin to match ACH, visa or a proof of stake chain.
This is of course after you consider opening a single LN channel for every human on earth would take 75 years and 300 billion dollars if the chain did nothing else. Like putting in a request for a Soviet phone line. LN has quadratic routing efficiency and is boat anchored to garbage.
You would have to do literally millions per on chain transaction using bitcoin to match ACH, visa or a proof of stake chain.
This is of course after you consider opening a single LN channel for every human on earth would take 75 years and 300 billion dollars if the chain did nothing else. Like putting in a request for a Soviet phone line. LN has quadratic routing efficiency and is boat anchored to garbage.
jb775(5)
We should probably also find a way to tax US dollar usage with CO2 tax as the net energy usage here is quite high as well
This would just increase the cost of electricity and thus the cost of living for everybody, and won't affect crypto miners much.
IMO the ethical thing to do is a re-distributive carbon tax. All the tax revenue should go directly back to the population as income/subsidy.
In this case, I think you could work around that, as they could implement a high capital gains tax rate for cryptocurrency sales. Then it would only impact people who mine.
Obviously it seems they are going in the exact opposite direction on this, though...
Obviously it seems they are going in the exact opposite direction on this, though...
Miners typically get their funds as income, not necessarily cap gains.
It's a gain based on your invested capital, isn't it? It's textbook capital gains. PoS, PoW, whatever.
No, mining is in no way capital gains. Capital gains is asset price increase.
Odd that you call it textbook capital gains, what textbook are you working from?
It seems pretty clearly like income to me.
It seems pretty clearly like income to me.
Under that definition, almost all income would be considered capital gains.
A baker buys an oven which they use to bake bread. They sell the bread for dollars. Is that capital gains?
Mining is reportable as ordinary income in the US.
Cryptocurrency earners have to report ordinary income taxes as well as capital gain/loss taxes.
Its not that hard, less than ideal, its also easy to immediately convert to USDC or fiat automatically, or find other deductions to reduce or eliminate the tax burden.
Cryptocurrency earners have to report ordinary income taxes as well as capital gain/loss taxes.
Its not that hard, less than ideal, its also easy to immediately convert to USDC or fiat automatically, or find other deductions to reduce or eliminate the tax burden.
The parent is simply pointing out that all consumption taxes are regressive. A CO2 tax by itself is a tax on the poor, especially the rural poor who have longer commutes and are more dependent on automobile travel.
A CO2 tax is only fair if it's paired with progressive tax breaks in other areas and/or subsidies for transition to renewable energy. An example would be a progressive subsidy for electric vehicle purchases and for upgrades to CO2-heavy (coal) electricity generation infrastructure in poorer areas.
A CO2 tax is only fair if it's paired with progressive tax breaks in other areas and/or subsidies for transition to renewable energy. An example would be a progressive subsidy for electric vehicle purchases and for upgrades to CO2-heavy (coal) electricity generation infrastructure in poorer areas.
A CO2 tax and rebate is progressive. The poorest people would receive more back in a rebate than they pay. But the biggest CO2 users would pay way more than they receive back.
While I generally like CO2 tax/rebate/cap-and-trade systems: given how inefficient and polluting many low-cost techs are... not sure I can agree with that, particularly on the small scale down to individual people. Individuals have the least agency on decisions like this, since they have next to no purchasing power. Though we are talking about bitcoin, which does raise the technical/money base-level a fair bit.
Wouldn't it be easiest to tax some of the raw materials that go into fuel production, rather than tracking every fuel use? In that case, the CO2 tax will naturally fall equally to everyone, including individual people. The rebate is just there to cancel out the effect of an inherently regressive but technically convenient way of doing things.
That's generally the idea of a flat tax, yeah. Tax everything at point-of-collection/creation (e.g. "you cut down a tree" or "you burned a log") or point-of-import (likely offset for similar taxes collected by the origin country), and there's no need to track anything beyond that point. E.g. re-use or re-selling is (CO2-)tax-free because it doesn't change the net input/output of the whole system.
Which rarely happens in practice, and we're so far from accurately taxing all these processes that it isn't even a dream of a dream. It's mostly tackling big targets, since that's where a ton of the impact-per-dollar-and-per-outrage can be found.
Which rarely happens in practice, and we're so far from accurately taxing all these processes that it isn't even a dream of a dream. It's mostly tackling big targets, since that's where a ton of the impact-per-dollar-and-per-outrage can be found.
> I guess we need a proper CO2 tax to encourage better technology than proof of work
The statement replied to does not mention "rebate."
> But the biggest CO2 users would pay way more than they receive back.
This statement does not seem believable given the recent stories about tax avoidance strategies of the wealthy.
The statement replied to does not mention "rebate."
> But the biggest CO2 users would pay way more than they receive back.
This statement does not seem believable given the recent stories about tax avoidance strategies of the wealthy.
The math on the PoW energy FUD just doesn't check out.
- At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future.
- bitcoin total addressable market cap if it took over the entire global monetary world (full global monetary premium): ~ 250tn or 300x from here implying a worst case outcome of 7.5% of global emissions, IF this happened TODAY and hashpower linearly tracked price. This is impossible off the bat because building out that infrastructure would take at least a decade. But more importantly it will take a decade or two for price to get there, by which time...
- The block subsidy will have gotten cut by ~ 10 (three halving cycles). Transaction fees might grow of course so let's say 5x lower which gets us back to 1.5% of global emissions.
- Add to that the following:
- 30% of CURRENT electricity production is stranded / wasted. All terminal bitcoin energy usage needs to do is tap into 5% of that to be emissions neutral. And it's heavily skewed towards tapping into that exclusively as that's the cheapest source and PoW is location neutral.
- the proof of work energy mix skews towards not only wasted / stranded but renewable which is trending towards being the cheapest form of energy.
- green power production is on an exponential adoption curve and enough sunlight hits the earth to power humanity for a year. Clean energy is there in amounts dwarfing societal needs, it's just a matter of harnessing it. This doesn't even include geothermal or nuclear.
- At an even higher level, if you got to this point, you would have replaced all the fiat systems in the world thereby: - eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions - flipping the world into a hard money world that is no longer incentivized to consume at all costs (read misallocate capital) ergo hugely reducing conspicuous consumption / GDP growth at all costs which is arguably the biggest driver of unnecessary emissions
- This final line of thought would have you conclude flipping to PoW would be emissions negative in the long run, but you don't really need to go there though, the energy numbers alone make this at best a chronically misunderstood narrative.
- At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error. This issue is currently a total red herring. Now let's project into the future.
- bitcoin total addressable market cap if it took over the entire global monetary world (full global monetary premium): ~ 250tn or 300x from here implying a worst case outcome of 7.5% of global emissions, IF this happened TODAY and hashpower linearly tracked price. This is impossible off the bat because building out that infrastructure would take at least a decade. But more importantly it will take a decade or two for price to get there, by which time...
- The block subsidy will have gotten cut by ~ 10 (three halving cycles). Transaction fees might grow of course so let's say 5x lower which gets us back to 1.5% of global emissions.
- Add to that the following:
- 30% of CURRENT electricity production is stranded / wasted. All terminal bitcoin energy usage needs to do is tap into 5% of that to be emissions neutral. And it's heavily skewed towards tapping into that exclusively as that's the cheapest source and PoW is location neutral.
- the proof of work energy mix skews towards not only wasted / stranded but renewable which is trending towards being the cheapest form of energy.
- green power production is on an exponential adoption curve and enough sunlight hits the earth to power humanity for a year. Clean energy is there in amounts dwarfing societal needs, it's just a matter of harnessing it. This doesn't even include geothermal or nuclear.
- At an even higher level, if you got to this point, you would have replaced all the fiat systems in the world thereby: - eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions - flipping the world into a hard money world that is no longer incentivized to consume at all costs (read misallocate capital) ergo hugely reducing conspicuous consumption / GDP growth at all costs which is arguably the biggest driver of unnecessary emissions
- This final line of thought would have you conclude flipping to PoW would be emissions negative in the long run, but you don't really need to go there though, the energy numbers alone make this at best a chronically misunderstood narrative.
You make a lot of claims here but I don't see anything in your post to back up the numbers. I'm too lazy to go do this research myself so I'm left as a result with defaulting to disbelieving you.
I've been following this topic intensely for years and am very comfortable with these numbers but fair enough. I agree I should reference some official sources which I'll try and dig back up. Happy to discuss any assumption in closer detail though.
> eliminating the energy spent on maintaining the fiat system which is easily more than 1.5% of global emissions
Absolutely. It's impossible to accurately account for, but a significant part of why the US Military Industrial Complex is so over-provisioned is to maintain dollar hegemony. 800 international US military bases, the Iraq war, invasion of Libya, force projection exercises by the navy, etc. Being the world police is expensive (in both dollars and CO2), and we wouldn't need to be if we weren't trying to tenuously maintain our status as world reserve currency.
"the DOD is the world's largest institutional user of petroleum and correspondingly, the single largest institutional producer of greenhouse gases (GHG) in the world. 5 From FY1975 to FY2018, total DOD greenhouse gas emissions were more than 3,685 Million Metric Tons of CO2 equivalent."
https://watson.brown.edu/costsofwar/files/cow/imce/papers/Pe...
Certainly the US military has other goals besides maintaining dollar hegemony, but if the dollar wasn't the world reserve currency there would be less need and funds for maintaining such a bloated amount of power.
Absolutely. It's impossible to accurately account for, but a significant part of why the US Military Industrial Complex is so over-provisioned is to maintain dollar hegemony. 800 international US military bases, the Iraq war, invasion of Libya, force projection exercises by the navy, etc. Being the world police is expensive (in both dollars and CO2), and we wouldn't need to be if we weren't trying to tenuously maintain our status as world reserve currency.
"the DOD is the world's largest institutional user of petroleum and correspondingly, the single largest institutional producer of greenhouse gases (GHG) in the world. 5 From FY1975 to FY2018, total DOD greenhouse gas emissions were more than 3,685 Million Metric Tons of CO2 equivalent."
https://watson.brown.edu/costsofwar/files/cow/imce/papers/Pe...
Certainly the US military has other goals besides maintaining dollar hegemony, but if the dollar wasn't the world reserve currency there would be less need and funds for maintaining such a bloated amount of power.
[quote]if the dollar wasn't the world reserve currency there would be less need and funds for maintaining such a bloated amount of power[/quote]
Citation needed.
You really think that other countries, and businesses and individuals in these countries store their savings and denominate their contracts in US dollars at gunpoint?
Ridiculous.
Citation needed.
You really think that other countries, and businesses and individuals in these countries store their savings and denominate their contracts in US dollars at gunpoint?
Ridiculous.
You are being superlative, but I absolutely believe that the reason we have a bigger military than the next ~10 countries combined is that we want to be the dominant superpower. And part of the desire for that dominance is maintaining the USD as the world reserve currency.
Whenever a country tries to move commodity trades away from the dollar (iraq oil, iran oil, libya gold, venezuela oil) coincidentally pretexts for military operations against them start being manufactured.
Whenever a country tries to move commodity trades away from the dollar (iraq oil, iran oil, libya gold, venezuela oil) coincidentally pretexts for military operations against them start being manufactured.
>At current levels, bitcoin uses very roughly 0.1% of global electricity but electricity only represents 25% of fossil fuels emissions so current PoW contribution to global emissions = 0.025%, ie a rounding error.
How does this argument make sense? Let's split up the world's energy consumption into 0.025% emission sized chunks in some arbitrary way we choose. Does nothing then make any difference, since everything is just a rounding error? The question is, does bitcoin provide value for the emissions it generates? For what it's worth, estimates seem to put the current usage at around 0.6% of total worldwide energy consumption.
How does this argument make sense? Let's split up the world's energy consumption into 0.025% emission sized chunks in some arbitrary way we choose. Does nothing then make any difference, since everything is just a rounding error? The question is, does bitcoin provide value for the emissions it generates? For what it's worth, estimates seem to put the current usage at around 0.6% of total worldwide energy consumption.
I see your point but my first bit just meant to highlight the unfair disproportionate energy attention PoW has been getting specifically vs just about any other use case.
I don't personally think you should be making moral judgements about energy use though. Let the market decide what's a good use of energy. If you have a carbon problem, tax / regulate that, PoW won't care. It will adjust through difficulty adjustments.
But if you are worried about PoW boiling the oceans if left unchecked, the numbers should comfort you it's at worst going to tap mostly into wasted energy / mostly renewable and probably not have a noticeable impact even extrapolated to a peak outcome (and probably even be a net positive).
I don't personally think you should be making moral judgements about energy use though. Let the market decide what's a good use of energy. If you have a carbon problem, tax / regulate that, PoW won't care. It will adjust through difficulty adjustments.
But if you are worried about PoW boiling the oceans if left unchecked, the numbers should comfort you it's at worst going to tap mostly into wasted energy / mostly renewable and probably not have a noticeable impact even extrapolated to a peak outcome (and probably even be a net positive).
I think bitcoin using 1 out of 1000 units of energy produced is pretty disgusting, hard stop.
> And it's heavily skewed towards tapping into that exclusively as that's the cheapest source and PoW is location neutral.
Are there any big miners who are known to be using stranded/wasted energy that would be produced anyway, as opposed to operating stranded plants that would otherwise be shut down or have capacity reduced? I only really follow the publicly traded miners (and with a bearish thesis), and I've seen a lot of miners getting dedicated coal/natural gas capacity but very little in terms of recapturing wasted energy.
And these are (mostly) US-based public companies, so they have the most to gain by projecting an ESG image.
Are there any big miners who are known to be using stranded/wasted energy that would be produced anyway, as opposed to operating stranded plants that would otherwise be shut down or have capacity reduced? I only really follow the publicly traded miners (and with a bearish thesis), and I've seen a lot of miners getting dedicated coal/natural gas capacity but very little in terms of recapturing wasted energy.
And these are (mostly) US-based public companies, so they have the most to gain by projecting an ESG image.
Also note that this crypto tax-reporting provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place.
Exempting actors in the crypto space who facillitate crypto usage without ever having custodial control of the funds makes a lot of sense. (Just like envelope manufacturers shouldn't have to register as money transmitters because people sometimes mail cash.) The provision that was slid in was nonsensically bad.
Exempting actors in the crypto space who facillitate crypto usage without ever having custodial control of the funds makes a lot of sense. (Just like envelope manufacturers shouldn't have to register as money transmitters because people sometimes mail cash.) The provision that was slid in was nonsensically bad.
> this crypto tax provision was slid into a huge bipartisan infrastructure deal. It really never should have been included in this legislation in the first place.
Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.
Why not? The infrastructure is being paid for in part by this tax. They're fundamentally linked.
The biggest issues were less with the tax part and more with requirements around KYC, data gathering, and reporting.
Updated my comment to clarify a bit: this wasn't a tax on crypto, it was about tax reporting requirements for certain actors in the crypto space.
(Because Bitcoin is psuedonymous it would have effectively be impossible to comply - functionally it was a ban on crypto mining in the US)
Even with the original language, this provision generates no revenue. It's only about data collection.
(Because Bitcoin is psuedonymous it would have effectively be impossible to comply - functionally it was a ban on crypto mining in the US)
Even with the original language, this provision generates no revenue. It's only about data collection.
> this provision generates no revenue. It's only about data collection.
I would want to see an independent analysis of this claim.
Increasing reporting requirements can generate revenue. There is a lot of unreported income. Given the culture around crypto, it isn't unreasonable to assume there is more of that going on there than baseline.
I would want to see an independent analysis of this claim.
Increasing reporting requirements can generate revenue. There is a lot of unreported income. Given the culture around crypto, it isn't unreasonable to assume there is more of that going on there than baseline.
If the reporting requirement was implemented, yes it would provide the IRS with more data that could be used to catch tax evaders. However, they should be able to get nearly all of the information they need from the USD-BTC edges (exchanges).
Effectively, I think what would have happened if this was enacted would be that all legitimate mining operations would move out of US, and the IRS still wouldn't get much data, just less tax revenue because those profits are no longer occurring on US soil by US entities.
Effectively, I think what would have happened if this was enacted would be that all legitimate mining operations would move out of US, and the IRS still wouldn't get much data, just less tax revenue because those profits are no longer occurring on US soil by US entities.
> by this tax
This isn't actually a (new) tax, it's a surveillance framework intended to support stricter enforcement of existing taxes. So far as that goes it's an added expense (mostly externalized) and not likely to pay for anything. The claim is that there is $28 billion of tax evasion going on which all this extra reporting would supposedly curtail–assuming all else remained equal—which is pure conjecture and not something that should be relied upon as a funding source.
This isn't actually a (new) tax, it's a surveillance framework intended to support stricter enforcement of existing taxes. So far as that goes it's an added expense (mostly externalized) and not likely to pay for anything. The claim is that there is $28 billion of tax evasion going on which all this extra reporting would supposedly curtail–assuming all else remained equal—which is pure conjecture and not something that should be relied upon as a funding source.
I think a lot of people, myself included, would like bills to be hyper focused and ban the use of riders.
There are a few reasons for this. One is that it is easier to keep track from the public perspective. A title should reflect the contents of the bill (in this case it is not obvious that bitcoin regulations are part of infrastructure). This could help reduce confusion and manipulation. It helps with transparency because it reduces the cognitive load (Note we can still talk about a "plan" or "package" that is a group of bills and so many conversations would stay the same).
The second part is that it helps reduce squabbling over nuance. A current bill might be 99% agreeable but that 1% is pretty contentious. If it was more compartmentalized then we could pass 99% of those things and get them in place faster rather than throwing the entire thing in the trash and restructuring (which often links back to the first point). This also reduces some of the toxic nature in politics where sometimes politicians add a component to nuke their own proposals so they can complain about it to their party's constituents.
This can probably be improved upon a lot but I think highlights the frustration with how things are done today and people are looking for systematic changes to fix those problems.
There are a few reasons for this. One is that it is easier to keep track from the public perspective. A title should reflect the contents of the bill (in this case it is not obvious that bitcoin regulations are part of infrastructure). This could help reduce confusion and manipulation. It helps with transparency because it reduces the cognitive load (Note we can still talk about a "plan" or "package" that is a group of bills and so many conversations would stay the same).
The second part is that it helps reduce squabbling over nuance. A current bill might be 99% agreeable but that 1% is pretty contentious. If it was more compartmentalized then we could pass 99% of those things and get them in place faster rather than throwing the entire thing in the trash and restructuring (which often links back to the first point). This also reduces some of the toxic nature in politics where sometimes politicians add a component to nuke their own proposals so they can complain about it to their party's constituents.
This can probably be improved upon a lot but I think highlights the frustration with how things are done today and people are looking for systematic changes to fix those problems.
Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with. There's no downside for not supporting a bill, so cutting half of its provisions will still half to vote against. Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill.
And most of these things would simply never pass as standalone bills, being too small and local for Congress as a whole, and too expensive or cross-jurisdictional for state governments.
And most of these things would simply never pass as standalone bills, being too small and local for Congress as a whole, and too expensive or cross-jurisdictional for state governments.
> Without riders and earmarks there's no way to get someone to support your bill if they don't like the concept to start with.
Why is this a problem? I see it as easier to call out politicians in public. Prevent the problems that are essentially: "Despite the 'Puppy and Sunshine' bill actually providing everyone with puppies and sunshine, we can't support it because it also summons the literal anti-christ to destroy the Earth. The puppies and sunshine is simply a trick to summon the anti-christ."
IMO doing so makes the bill far more transparent _to the public_.
> Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill.
I do not understand why such a thing could not happen without these nor with packages (as defined above).
> And most of these things would simply never pass as standalone bills
Do you not see that as a problem?
Why is this a problem? I see it as easier to call out politicians in public. Prevent the problems that are essentially: "Despite the 'Puppy and Sunshine' bill actually providing everyone with puppies and sunshine, we can't support it because it also summons the literal anti-christ to destroy the Earth. The puppies and sunshine is simply a trick to summon the anti-christ."
IMO doing so makes the bill far more transparent _to the public_.
> Riders and earmarks allow politicians to secure minor wins that they can sell to their electorate as the reason for supporting a bill.
I do not understand why such a thing could not happen without these nor with packages (as defined above).
> And most of these things would simply never pass as standalone bills
Do you not see that as a problem?
> "Despite the 'Puppy and Sunshine' bill actually providing everyone with puppies and sunshine, we can't support it because it also summons the literal anti-christ to destroy the Earth. The puppies and sunshine is simply a trick to summon the anti-christ."
Was this edgy strawman really useful?
> IMO doing so makes the bill far more transparent _to the public_.
How? The public that are engaged are still almost entirely getting their knowledge through the media, and they won't cover small bills due to lack of journalists, and more importantly, because readers aren't interested in them. I'm not sure who this mythical cohort who want to understand more about e.g. legislation that involves federal spending in Ohio, but can only do so by looking at every single small bill until they find "The Providing Ohio Reinvestment Kickback Bill" on page 23.
> I do not understand why such a thing could not happen without these nor with packages (as defined above).
Because there is only so much time available to get bills passed if nothing else, a bill focussing solely on niche and/or local issues are going to get bumped down the queue at every stage - in committee, getting scored for budgetary implications, getting floor time etc. - and there are two houses to make it worse.
> Do you not see that as a problem?
Well that depends on what it actually was of course.
The US system of government is at every level designed to prevent getting anything done, and so lots of things get lumped onto big bills that are likely to pass. I mean there's even a literal "omnibus bill" FFS. But the alternative is that "$1,000,000 for additional spaces at homeless shelters for transgender youth" isn't ever going to get to the floor, let alone pass in the House and get 60 votes in the Senate.
Was this edgy strawman really useful?
> IMO doing so makes the bill far more transparent _to the public_.
How? The public that are engaged are still almost entirely getting their knowledge through the media, and they won't cover small bills due to lack of journalists, and more importantly, because readers aren't interested in them. I'm not sure who this mythical cohort who want to understand more about e.g. legislation that involves federal spending in Ohio, but can only do so by looking at every single small bill until they find "The Providing Ohio Reinvestment Kickback Bill" on page 23.
> I do not understand why such a thing could not happen without these nor with packages (as defined above).
Because there is only so much time available to get bills passed if nothing else, a bill focussing solely on niche and/or local issues are going to get bumped down the queue at every stage - in committee, getting scored for budgetary implications, getting floor time etc. - and there are two houses to make it worse.
> Do you not see that as a problem?
Well that depends on what it actually was of course.
The US system of government is at every level designed to prevent getting anything done, and so lots of things get lumped onto big bills that are likely to pass. I mean there's even a literal "omnibus bill" FFS. But the alternative is that "$1,000,000 for additional spaces at homeless shelters for transgender youth" isn't ever going to get to the floor, let alone pass in the House and get 60 votes in the Senate.
These type of riders in must-pass omnibus bills are abominations.
> (C) developing digital assets or their corresponding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols.
The last qualifier seems poorly worded and becomes too broad. So (extreme example) a consulting agency developing a value-exchange platform to be run on a private chain in a customer corporate network would not be exempt. Bringing the act of building and selling software (or a SaaS, as long as the service itself doesn't custody user funds) is nonsensical. (B) is also a bit too narrow to address this.
The last qualifier seems poorly worded and becomes too broad. So (extreme example) a consulting agency developing a value-exchange platform to be run on a private chain in a customer corporate network would not be exempt. Bringing the act of building and selling software (or a SaaS, as long as the service itself doesn't custody user funds) is nonsensical. (B) is also a bit too narrow to address this.
Does this include or exclude DEXes? It sounds like C) could mean that DEXes are not included (which would be good), but I'm not entirely clear on the legal definitions of some of these things.
Obviously HN community is down on crypto. This exemption is a sign that Bitcoin is getting closer to the mainstream of finance. Like most flanker-moves, Governments should be incorporating it in to their tax policies rather than shunning it. Cannabis is a good proxy, states can keep it illegal and not make tax revenue or they can legalize it, control it and tax it. The feds should do the same. Same for crypto, keeping it on the fringes will only help illegal enterprises and rogue nations use it to bypass sanctions. As to whether it has a use or is a store of value, these are largely irrelevant questions. It is pure speculation, allowing one person to bet against another, much like playing poker in a casino.
> This exemption is a sign that Bitcoin is getting closer to the mainstream of finance.
I think it’s more a sign that crypto is mainstream finance now. Specifically, the type that has enough money sloshing around at the top to warrant lobbying efforts and mingling with the finances of regulators.
> Same for crypto, keeping it on the fringes will only help illegal enterprises and rogue nations use it to bypass sanctions.
None of this has any impact at all on whether or not crypto is used for illicit purposes in other locations. Crypto is also already taxed and legal, so the comparison to cannabis doesn’t make sense either.
I think it’s more a sign that crypto is mainstream finance now. Specifically, the type that has enough money sloshing around at the top to warrant lobbying efforts and mingling with the finances of regulators.
> Same for crypto, keeping it on the fringes will only help illegal enterprises and rogue nations use it to bypass sanctions.
None of this has any impact at all on whether or not crypto is used for illicit purposes in other locations. Crypto is also already taxed and legal, so the comparison to cannabis doesn’t make sense either.
Sure, there are substantive differences between Crypto and Cannabis, the point I was trying to make is that Bitcoin is beyond the tipping point. The point that makes sense to bring it into the fold. Secondly, if the USA is seen to be focussed on legitimizing crypto then this would be a signal to NK / RU hacking groups that US Government Agencies are taking an active interest and including it in their daily operational scope. Given the tentacles of US enforcement, this could help limit use of BTC (not all crypto) for illicit purposes.
> the point I was trying to make is that Bitcoin is beyond the tipping point
It’s no longer about Bitcoin. It’s about alternative asset classes. I think the new ventures in the crypto space have realized that BTC is old news and that the real money is in creating endless new crypto assets and ventures.
It’s no longer about Bitcoin. It’s about alternative asset classes. I think the new ventures in the crypto space have realized that BTC is old news and that the real money is in creating endless new crypto assets and ventures.
I guess that is the worry of any government: money that could fuel the economy gets spirited away into dubious Crypto ventures - e.g. Dogecoin. BTC might be old news but it isn't a deliberate scam.
Wasn't Dogecoin originally intended as a joke, not a scam?
Yes, I realized that once I submitted the comment it could be interpreted that I was suggesting Dogecoin is a scam when actually I just think it is dubious.
Thankfully no one has yet invented a crypto where you receive coins by proving you destroyed physical currency - USD spent on a crypto scam is still circulated through the economy. If anything, according to the greater fool theory, crypto transfers USD from the more gullible to the more manipulative, just as god intended.
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I'm confused about your position on this, though: the amendment in question ensures certain cryptocurrency-related activities won't be taxed.
I agree that we shouldn't be banning this sort of thing, but if people want to throw electricity at it in ways that I consider a huge waste of resources, I'd really like to see that taxed better. And not in a regressive way that makes every electricity user pay more.
> Obviously HN community is down on crypto.
I don't really think that's true, and please remember that the HN community is not homogeneous, and various people have very different (and strong) opinions on many things. I'm personally not a fan of cryptocurrency (I think it's a waste of time and effort, and to top it off it's currently an environmental disaster), but the top comments on this article are relatively positive right now.
I believe @dang has mentioned often that early comments on most articles end up being pretty negative, because the early posts will be more knee-jerk (which tends to bring out the worst reactions in people). Only after people have time to read and cool down will posts be more measured. This article was only posted an hour ago (at the time I'm writing this), so no surprise there's a lot of negativity here.
I agree that we shouldn't be banning this sort of thing, but if people want to throw electricity at it in ways that I consider a huge waste of resources, I'd really like to see that taxed better. And not in a regressive way that makes every electricity user pay more.
> Obviously HN community is down on crypto.
I don't really think that's true, and please remember that the HN community is not homogeneous, and various people have very different (and strong) opinions on many things. I'm personally not a fan of cryptocurrency (I think it's a waste of time and effort, and to top it off it's currently an environmental disaster), but the top comments on this article are relatively positive right now.
I believe @dang has mentioned often that early comments on most articles end up being pretty negative, because the early posts will be more knee-jerk (which tends to bring out the worst reactions in people). Only after people have time to read and cool down will posts be more measured. This article was only posted an hour ago (at the time I'm writing this), so no surprise there's a lot of negativity here.
No no no, the amendment doesn't say that those activities can't be taxed, it clarifies that there won't be KYC requirements on people who literally can't comply with them.
The issue here isn't about what activities should be taxed, it's about overly broad KYC reporting requirements.
Pretend the original provision was about ATMs... the language could be used to argue that armored truck drivers should be required to collect personal information and transaction data for every user of every ATM they deliver cash to. Obviously that's not really possible and would be a huge privacy issue. The risk people are seeing here is that the current language could be abused to make ATMs illegal altogether, since nobody would want to risk getting in trouble during the process of stocking them.
The issue here isn't about what activities should be taxed, it's about overly broad KYC reporting requirements.
Pretend the original provision was about ATMs... the language could be used to argue that armored truck drivers should be required to collect personal information and transaction data for every user of every ATM they deliver cash to. Obviously that's not really possible and would be a huge privacy issue. The risk people are seeing here is that the current language could be abused to make ATMs illegal altogether, since nobody would want to risk getting in trouble during the process of stocking them.
> ... please remember that the HN community is not homogeneous, and various people have very different (and strong) opinions on many things.
Honestly I'm not sure I consider HN a "community" in the same way I consider other online ... communities, communities.
With notably rare exceptions you don't have a lot of sharing of personal milestones, and while you might occasionally "recognize" a poster (and we have a few "famous" ones) it's much easier to deal with each comment as a stand-alone statement without any provenance.
Even meta-discussion about the nature of HN like this seems a bit gauche and is discouraged.
Honestly I'm not sure I consider HN a "community" in the same way I consider other online ... communities, communities.
With notably rare exceptions you don't have a lot of sharing of personal milestones, and while you might occasionally "recognize" a poster (and we have a few "famous" ones) it's much easier to deal with each comment as a stand-alone statement without any provenance.
Even meta-discussion about the nature of HN like this seems a bit gauche and is discouraged.
> Obviously HN community is down on crypto.
This will earn you downvotes because it is a childish sentiment of HN.
Many on HN dislike crypto in its current form of lawlessness. Regulation like this is a positive step for the ecosystem. Cryptos will still have to prove their value outside of finance to become more accepted by HN.
This will earn you downvotes because it is a childish sentiment of HN.
Many on HN dislike crypto in its current form of lawlessness. Regulation like this is a positive step for the ecosystem. Cryptos will still have to prove their value outside of finance to become more accepted by HN.
Point taken, this characterization is too broad.
Since 99% of tokens out there are specifically created as pump and dump schemes i'm not sure that it's all that over-broad.
"Cannabis is a good proxy, states can keep it illegal and not make tax revenue or they can legalize it, control it and tax it."
That should be a great proxy, but regulators have so overburdened legal dispensaries that they need to be bailed out. Illegal sources could have been easily been made extinct or at least sidelined, but are still able to thrive because the overhead to get a license and stay licensed is so immense.
https://www.latimes.com/california/story/2021-06-14/californ...
That should be a great proxy, but regulators have so overburdened legal dispensaries that they need to be bailed out. Illegal sources could have been easily been made extinct or at least sidelined, but are still able to thrive because the overhead to get a license and stay licensed is so immense.
https://www.latimes.com/california/story/2021-06-14/californ...
Here in Canada there's a ton of shops that look like normal dispensaries but are just unlicensed ones. Their product selection is usually way better and includes co2 extracted vape products (which last I checked weren't legally available yet and IMO the future of weed consumption) and candy/drinks/etc. They also have better websites which cheap same-day delivery, usually within a few hours.
The municipal governments try to shut them down with daily fines but they either eat the cost because it's so lucrative or shut down temporarily and pop up somewhere else.
At least one shop had large bricks put in front of them at multiple locations and they just put someone outside with a square tablet and sold it there.
https://globalnews.ca/news/5369230/cement-blocks-illegal-mar...
I highly doubt the underground/grey markets will go away.
The municipal governments try to shut them down with daily fines but they either eat the cost because it's so lucrative or shut down temporarily and pop up somewhere else.
At least one shop had large bricks put in front of them at multiple locations and they just put someone outside with a square tablet and sold it there.
https://globalnews.ca/news/5369230/cement-blocks-illegal-mar...
I highly doubt the underground/grey markets will go away.
Bitcoin is built on a house of Tether. https://www.coindesk.com/tether-first-reserve-composition-re...
Cannabis isn't a distributed ponzi scheme.
What is most significant about this is that all crypto bills have died in committee before now. And suddenly, all at once, crypto is being debated on the floor of the whole senate in a bill that the President wanted. They are recognizing it as a distinct asset class that is able to have attributes of other asset classes. This means old money has to wake up now.
> In the sociological sense, recuperation is the process by which politically radical ideas and images are twisted, co-opted, absorbed, defused, incorporated, annexed or commodified within media culture and bourgeois society, and thus become interpreted through a neutralized, innocuous or more socially conventional perspective. More broadly, it may refer to the cultural appropriation of any subversive symbols or ideas by mainstream culture.
https://www.wikiwand.com/en/Recuperation_(politics)
https://www.wikiwand.com/en/Recuperation_(politics)
Isn't crypto a direct threat to their power?
If finance can't be tracked it can't be taxed.
If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
Just theorizing. I have no idea if this would happen.
If finance can't be tracked it can't be taxed.
If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
Just theorizing. I have no idea if this would happen.
> Isn't crypto a direct threat to their power?
I don't know where this meme came from. If the U.S. government declared Bitcoin legal tender tomorrow, it would be monumental. But practically speaking, not that much would change. The Fed would buy Bitcoin the way e.g. the Swiss National Bank buys dollars and euros. And the Treasury would issue Bitcoin bonds or something, I don't know.
Cryptocurrencies currently make it easier to evade taxes, which benefits the rich, and easier to make money in a host of new financial activities, which benefits those near those activities, i.e. people with money and banks and first movers in the technology.
I don't know where this meme came from. If the U.S. government declared Bitcoin legal tender tomorrow, it would be monumental. But practically speaking, not that much would change. The Fed would buy Bitcoin the way e.g. the Swiss National Bank buys dollars and euros. And the Treasury would issue Bitcoin bonds or something, I don't know.
Cryptocurrencies currently make it easier to evade taxes, which benefits the rich, and easier to make money in a host of new financial activities, which benefits those near those activities, i.e. people with money and banks and first movers in the technology.
BTC can be tracked better than cash
So why are ransomware hackers never prosecuted?
Usually it involves conversion of illegally gained assets into untraceable cryptocurrencies such as XMR (Monero) and then subsequent funneling and conversion of those assets back into USD via offshore exchanges.
IRS is offering $625,000 USD to anyone that can crack the Monero algorithm [1].
[1] https://www.forbes.com/sites/kellyphillipserb/2020/09/14/irs...
IRS is offering $625,000 USD to anyone that can crack the Monero algorithm [1].
[1] https://www.forbes.com/sites/kellyphillipserb/2020/09/14/irs...
> conversion of those assets back into USD via offshore exchanges.
They would probably not exchange into USD, there are plenty of other currencies and they would probably favor a local currency.
They would probably not exchange into USD, there are plenty of other currencies and they would probably favor a local currency.
Because trackable doesn't mean "always trackable to a real human identity who's the original source". Bitcoin transactions are trivial for anyone to track, since everything is recorded on the public blockchain, but you can't necessarily follow the trail to the true culprit even if you're law enforcement. Especially if there are non-cooperative entities in the chain who are completely outside of your jurisdiction.
Though, the true answer to your actual question is what the other commenter said: it's mainly due to the Russian government turning a blind eye to it as long as they don't target Russian/ex-USSR citizens. So even if you do know a ransomware operator's full name and home address and everything else you can possibly know about them, you can't do anything about it besides hope they leave the country and try to catch them then.
Though, the true answer to your actual question is what the other commenter said: it's mainly due to the Russian government turning a blind eye to it as long as they don't target Russian/ex-USSR citizens. So even if you do know a ransomware operator's full name and home address and everything else you can possibly know about them, you can't do anything about it besides hope they leave the country and try to catch them then.
> So why are ransomware hackers never prosecuted?
Because they're typically based in Russia, and Russia has a policy that it will not prosecute its citizens for computer crimes unless they perpetrated them against Russians or Russian organizations. My understanding is most ransomware has code to detect Russian computers (e.g. by checking localization settings), and will refuse to run if it finds itself on one for that reason.
https://krebsonsecurity.com/2021/05/try-this-one-weird-trick...
Because they're typically based in Russia, and Russia has a policy that it will not prosecute its citizens for computer crimes unless they perpetrated them against Russians or Russian organizations. My understanding is most ransomware has code to detect Russian computers (e.g. by checking localization settings), and will refuse to run if it finds itself on one for that reason.
https://krebsonsecurity.com/2021/05/try-this-one-weird-trick...
Why not set all US system to have russian locale?
That is actually done by some orgs for security purposes.
So why not just send the payment to a Russian bank?
> So why not just send the payment to a Russian bank?
I don't know, I'm not a Russian in the ransomware business.
But I speculate that doing it that way might be so blatant and inconvenient to the Russian government that it might get the policy that protects them changed. Also, I'd imagine any bank that accepts such payments would quickly get itself blacklisted. This stuff isn't actually binary, so it's not smart to take it to the limit.
I don't know, I'm not a Russian in the ransomware business.
But I speculate that doing it that way might be so blatant and inconvenient to the Russian government that it might get the policy that protects them changed. Also, I'd imagine any bank that accepts such payments would quickly get itself blacklisted. This stuff isn't actually binary, so it's not smart to take it to the limit.
Because Russian banks need to be capable of transacting with American banks and directly receiving money that is Ransom Payment related is a bad business decision.
So you're saying sending money to a bitcoin address would help obscure the identity of the receiver?
No I'm saying a Russian bank probably doesn't look past the deposit. But if the deposit comes from America then an American bank will ask for it back when the US govt tells it to and then the bank will do so because it's good business. So I would imagine most ransomware gangs just keep the money in bitcoin and only pull out what they need to when they need to.
If there's one thing I've learned, it's that illegality is irrelevant. Only what laws are enforced, and how quickly they are enforced, matters.
Because they live and operate in jurisdictions without extradition treaties.
So they might as well just ask for their ransom via a wire transfer or paypal? Since their identity will be known anyway.
If ransomware used PayPal accounts or bank numbers those payments would quickly start being censored to cut off their payment rails. The value of crypto is all rooted in censorship resistance, not anonymity.
Wouldn't it have to be an agency in their own jurisdiction that would prevent the hacker from accessing banking services? They would make an effort to shut down the hackers bank account but not prosecute them?
The pressure point in the traditional financial system is not the Russian authorities cutting off the Russian hacker from a Russian bank, it's SWIFT cutting off the Russian bank from the global financial system.
Sure, if you don't use mixers
I'm pretty sure mixers are currently illegal and will be treated as such once the debate starts.
Money laundering (aka, pooling cash together to make it harder to track) is defacto illegal by itself, even if you use the money for legitimate purposes.
Money laundering (aka, pooling cash together to make it harder to track) is defacto illegal by itself, even if you use the money for legitimate purposes.
What you described is not illegal by itself. Obfuscating the origin of earnings is not illegal. Although "pooling" may be regulated in other ways.
A federal "money laundering" charge requires an illicit origin, and so since successful money laundering will never have an illicit origin, the charge can only be tacked on to another indictment.
After centuries of not having much surveillance tools of the money supply, the state has had a 50 year run of the privilege of deputizing financial intermediaries to surveil the electronic payment system. Now the electronic payment system will begin to inherit the same tenets of cash. This is just a reversion to the mean.
A federal "money laundering" charge requires an illicit origin, and so since successful money laundering will never have an illicit origin, the charge can only be tacked on to another indictment.
After centuries of not having much surveillance tools of the money supply, the state has had a 50 year run of the privilege of deputizing financial intermediaries to surveil the electronic payment system. Now the electronic payment system will begin to inherit the same tenets of cash. This is just a reversion to the mean.
> A federal "money laundering" charge requires an illicit origin, and so since successful money laundering will never have an illicit origin, the charge can only be tacked on to another indictment.
Fair.
But think about it: a _singular_ person in your mixing pool can make the entire pool illegal. One, singular, person using that money for contraband (illegal porn, illegal drugs, illegal tax evasion) will turn the entire pool illegal.
Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
So in practice, I'd argue that most mixers are illegal (because surely, there's at least one person using the mixer for illegitimate purposes). Furthermore: the BTC transaction into the pool (and out of the pool) will forever be written into the blockchain. If you use your same wallet for both sides (or if the prosecutors can prove that one of your wallets was on the input-side, and another one of your wallets was on the output-side of the mixing process), you're now tied to all of the illegal activities that mixing pool is associated with.
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That's the thing. Mixing pools have never been tested in court. But imagine what a prosecutor would say to a jury, and imagine what the jury would rule.
Fair.
But think about it: a _singular_ person in your mixing pool can make the entire pool illegal. One, singular, person using that money for contraband (illegal porn, illegal drugs, illegal tax evasion) will turn the entire pool illegal.
Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
So in practice, I'd argue that most mixers are illegal (because surely, there's at least one person using the mixer for illegitimate purposes). Furthermore: the BTC transaction into the pool (and out of the pool) will forever be written into the blockchain. If you use your same wallet for both sides (or if the prosecutors can prove that one of your wallets was on the input-side, and another one of your wallets was on the output-side of the mixing process), you're now tied to all of the illegal activities that mixing pool is associated with.
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That's the thing. Mixing pools have never been tested in court. But imagine what a prosecutor would say to a jury, and imagine what the jury would rule.
>But think about it: a _singular_ person in your mixing pool can make the entire pool illegal. One, singular, person using that money for contraband (illegal porn, illegal drugs, illegal tax evasion) will turn the entire pool illegal.
It's very difficult to know, but I'm leaning towards this not holding up in court. At least not upon appeal. If a mixer has tens of millions of known participant addresses and the government tries to argue that merely owning a single address that received anything from the mixer means you aided and abetted some other crime from some other person who used the mixer, I think the defense could point out how that just isn't remotely statistically sufficient to imply any sort of involvement.
>Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
I'm not sure if proving a negative will work. Now, if they can prove you had knowledge at the time that at least one person used it illicitly, then I think it'd depend how the mixer works. If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
I see how they could potentially prosecute the owners of the mixers, if the owners are aware of at least one case of criminal use, but prosecuting the users sounds much more difficult.
It's very difficult to know, but I'm leaning towards this not holding up in court. At least not upon appeal. If a mixer has tens of millions of known participant addresses and the government tries to argue that merely owning a single address that received anything from the mixer means you aided and abetted some other crime from some other person who used the mixer, I think the defense could point out how that just isn't remotely statistically sufficient to imply any sort of involvement.
>Do you trust everyone else in the pool to be using it for legitimate gains? If you went into court, would you be able to say with a straight face that "Everyone in my mixing pool was in fact, doing legal activities?"
I'm not sure if proving a negative will work. Now, if they can prove you had knowledge at the time that at least one person used it illicitly, then I think it'd depend how the mixer works. If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
I see how they could potentially prosecute the owners of the mixers, if the owners are aware of at least one case of criminal use, but prosecuting the users sounds much more difficult.
At least given today's political environment, I can very well see a simple argument consisting of:
* "The only reason to use a mixer is to hide money"
* "You joined a pool of millions of individuals, all of whom had the explicit goal of hiding money from the traditional financial system".
* "You (probably) knew that the money you get in your output wallet comes from a random individual in the pool".
As such, the implicit assumption in a reasonable person's mind is: this money you got is absolutely from someone else who was trying to hide their money. The law also states that aiding and abetting them is illegal in of itself.
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> If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
--------
I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
* "The only reason to use a mixer is to hide money"
* "You joined a pool of millions of individuals, all of whom had the explicit goal of hiding money from the traditional financial system".
* "You (probably) knew that the money you get in your output wallet comes from a random individual in the pool".
As such, the implicit assumption in a reasonable person's mind is: this money you got is absolutely from someone else who was trying to hide their money. The law also states that aiding and abetting them is illegal in of itself.
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> If it works so that any "dirty money" is purged out within the next few transactions, then they might have to prove that you sent or received funds close to those distribution windows and had specific knowledge that some specific illegal act was likely occurring at that time.
Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
--------
I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
You're worried about the distraction and inconvenience of a trial court case, me and the person you replied to are confident in the appeals courts - where there is no jury to appeal to the emotion of but where the arguments are much more constitutional and procedural based.
>As such, the implicit assumption in a reasonable person's mind is: this money you got is absolutely from someone else who was trying to hide their money. The law also states that aiding and abetting them is illegal in of itself.
Is hiding money inherently a crime, though? I think it only might be if you're trying to violate a specific law regarding transparency. Naturally, if you're using a mixer, you must be trying to hide your money or how you're using the money, so if that much is illegal then you can skip all the arguments about the source of the other funds in the mixer. But if it isn't illegal, then I think you might need to tie it to belief that a specific crime likely occurred.
I'm definitely not a lawyer and could be totally wrong. But that's the defense I'd give, at least. Unless mixers are explicitly declared illegal, or unless there are explicit reporting requirements which you're evading (e.g. they have reason to believe that you used the mixer to evade taxes), the accusation just seems too weak and vague.
>Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
That's true. The better the mixer, the harder it might be to prove you aren't guilty if you're not guilty. But, at the same time, the harder it might be to prove you are guilty if you actually are guilty. (Assuming the crime in question is what the mixing was allegedly abetting, like a cryptocurrency exchange heist or something.)
>I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
That seems very different to me. The inherent act of downloading or uploading the content is illegal. So if an IP registered to your name and home address is downloading the content, then it's just a matter of trying to prove that you likely initiated that activity. The IP's "guilt" is already a given.
I think it'd only be analogous if mere use of a mixer is also itself illegal; even assuming a scenario where no one is using it to help with any other crimes. But if it is, then it's just begging the question, since using it would be illegal because it's illegal to use. And then it'd just be a matter of proving you had access to and were using that cryptocurrency address at that time, since the address's "guilt" is already established.
Is hiding money inherently a crime, though? I think it only might be if you're trying to violate a specific law regarding transparency. Naturally, if you're using a mixer, you must be trying to hide your money or how you're using the money, so if that much is illegal then you can skip all the arguments about the source of the other funds in the mixer. But if it isn't illegal, then I think you might need to tie it to belief that a specific crime likely occurred.
I'm definitely not a lawyer and could be totally wrong. But that's the defense I'd give, at least. Unless mixers are explicitly declared illegal, or unless there are explicit reporting requirements which you're evading (e.g. they have reason to believe that you used the mixer to evade taxes), the accusation just seems too weak and vague.
>Well, the issue with "faster moving" mixers is that it more closely connects the dirty money with the source. "Slow moving" mixers with larger pools are more entangled, harder to know where the money came from.
That's true. The better the mixer, the harder it might be to prove you aren't guilty if you're not guilty. But, at the same time, the harder it might be to prove you are guilty if you actually are guilty. (Assuming the crime in question is what the mixing was allegedly abetting, like a cryptocurrency exchange heist or something.)
>I dunno. The RAII has been mildly successful in court over IP addresses used in Bittorrent peers, right? That seems to be roughly the same level of involvement as we're seeing here. I'm not necessarily saying you're going to get jailtime, but you probably will be roped into the court case if someone in your pool was doing something sketchy.
That seems very different to me. The inherent act of downloading or uploading the content is illegal. So if an IP registered to your name and home address is downloading the content, then it's just a matter of trying to prove that you likely initiated that activity. The IP's "guilt" is already a given.
I think it'd only be analogous if mere use of a mixer is also itself illegal; even assuming a scenario where no one is using it to help with any other crimes. But if it is, then it's just begging the question, since using it would be illegal because it's illegal to use. And then it'd just be a matter of proving you had access to and were using that cryptocurrency address at that time, since the address's "guilt" is already established.
I too am not a lawyer. But banks and money transactions have numerous provisions in them to hamper criminals who try to hide money.
Perhaps I'm wrong about money laundering. But what if prosecutors instead hit you with smurfing? (https://www.goldinglawyers.com/smurfing-money-example-lost-e...)
Perhaps smurfing is closer to the mixing. The _intent to hide_ is by itself illegal in the law, and frowned upon severely in our country.
Perhaps I'm wrong about money laundering. But what if prosecutors instead hit you with smurfing? (https://www.goldinglawyers.com/smurfing-money-example-lost-e...)
Perhaps smurfing is closer to the mixing. The _intent to hide_ is by itself illegal in the law, and frowned upon severely in our country.
Structuring/smurfing is done to evade specific bank deposit reporting requirements, though. Unless there's a specific requirement you're trying to evade (e.g. an exchange must, by law, report deposits or balances over a certain size), I don't know if the general notion of "hiding" can be considered illicit.
I had not chimed in on mixers, only money laundering charges. There are plenty of other ways to obfuscate the origin of crypto without using mixers.
Although I don't agree with how you extrapolate other legal scenarios to one about mixer users, I'm also not worried about juries, the judges especially on appeal are where your rights matter and would not be swayed by emotional arguments like a jury. You are pretty much paralyzed if you are always worried about what prosecutors can target you for and what juries can be swayed to do.
Although I don't agree with how you extrapolate other legal scenarios to one about mixer users, I'm also not worried about juries, the judges especially on appeal are where your rights matter and would not be swayed by emotional arguments like a jury. You are pretty much paralyzed if you are always worried about what prosecutors can target you for and what juries can be swayed to do.
I'm not sure how to phrase this. But I'm reminded of the dark knight returns where because all the mobs pooled their money together with their launderer (their mixer) they could all be prosecuted together in a RICO case. Is use of a mixer de facto evidence of laundering...
Side question: How difficult is it to use a mixer?
If you have the tech skills to mine bitcoin is it trivial to find and use a mixer, or is it something requiring more specific expertise?
If you have the tech skills to mine bitcoin is it trivial to find and use a mixer, or is it something requiring more specific expertise?
Not too difficult, though I've never done it so can't say for sure.
It’s relatively trivial to use a mixer, just like sending any other transaction. The mixer deals with all the complexity. However almost all mixers have been eventually compromised. It’s likely chainalysis and others can easily demix the transactions, so they really shouldn’t be entirely trusted.
Or, swap to a privacy token and back.
Just want to point out it's not quite that easy: If you convert 1.24 (or whatever) bitcoins into zcash/monero/etc and then 1.24 right back into bitcoins, everyone will know those transactions were likely connected.
I should think that it would be obvious that you don't put in 1.24 BTC and then take out 1.24 BTC later. Someone trying to hide the source of their funds via a mixer or Monero or whatever would put in 1.24 BTC and take out 1 BTC + 0.2 BTC + 2*(0.02 BTC) (or some other set of common denominations) in separate transactions to distinct BTC wallets, taking steps to ensure that these transactions can't be correlated with each other by IP address, time, etc. They want to hide the withdrawals in a sea of indistinguishable, uniform transactions; moving a unique, traceable quantity all at once would be a clear red flag. The principle is hardly obscure; it's exactly the same as the popular image of criminals conducting business with suitcases full of unmarked $20 bills. They use $20 bills because they're commonplace, not because they're more convenient than $50 or $100 bills.
> Isn't crypto a direct threat to their power?
It isn't since it doesn't change property relations. It is more of a "different asset" they could own and speculate with.
> If finance can't be tracked it can't be taxed.
Crypto-tokens are very traceable and most can be deanonymized by forensic accountants.
> If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
It wouldn't and most people aren't savy enough in cybersecurity to avoid having their tokens stolen. (And most protocols don't have a chargeback or recovery mechanism)
It isn't since it doesn't change property relations. It is more of a "different asset" they could own and speculate with.
> If finance can't be tracked it can't be taxed.
Crypto-tokens are very traceable and most can be deanonymized by forensic accountants.
> If it's mainstream more and more people could potentially switch to crypto, which would reduce their tax collections.
It wouldn't and most people aren't savy enough in cybersecurity to avoid having their tokens stolen. (And most protocols don't have a chargeback or recovery mechanism)
> Isn't crypto a direct threat to their power?
It is not a threat to their power, imagine the corrupting power of being able to produce wealth anonymously without being traced or taxed and having that sanctioned by the government.
It is not a threat to their power, imagine the corrupting power of being able to produce wealth anonymously without being traced or taxed and having that sanctioned by the government.
If they wanted to squash it they should have done it much earlier (if it was possible at all and wouldn't have just caused Streisand Effect).
Now you have congressmen with laser eyes on 100k bitcoin twitter profile pics, the head of SEC taught classes about blockchain at MIT; it is way too late.
The smart thing is to embrace it, the complete opposite of the Chinese government course of action. You set back the entire nation by not embracing innovation.
Now you have congressmen with laser eyes on 100k bitcoin twitter profile pics, the head of SEC taught classes about blockchain at MIT; it is way too late.
The smart thing is to embrace it, the complete opposite of the Chinese government course of action. You set back the entire nation by not embracing innovation.
I don't think crypto can be blocked at this point - there will always be a communication channel for sharing blocks. Hell, it could be done via SMS messages if necessary.
They can significantly hurt the price but limiting reputable shops from accepting it though.
They can significantly hurt the price but limiting reputable shops from accepting it though.
No more than Pork Futures are a threat to their power. This is plain old fashioned finance guys paying off senators to make tax loopholes for them.
Most people thought the internet was a threat to the establishment. In all likelihood bitcoin was developed by the NSA.
> That means that the IRS will not be able to require that miners, stakers and companies that sell hardware or software for storing digital assets report the activities of their customers or crypto users whose transactions they verify.
> In a statement, Wyden said that “investors failing to pay tax they owe through cryptocurrency is a real problem,” but that the law as previously written was too broad and would have applied to actors who would not have been able to fulfill its mandates.
> The changes will lead to the bill raising $5.2 billion less than the $28 billion envisaged by the initial legislation, according to a Politico report citing the Joint Committee on Taxation.
To me, a layman, it seems that they are trying to allow more loopholes for tax evasion through buying and selling bitcoin in certain ways? Or am I completely off base?
EDIT: Here [0] is the actual ammendment, so it seems maybe it's just protecting people doing development work on cryptocurrency software/hardware from having to pay taxes.. I think
[0] https://news.ycombinator.com/item?id=28075226
> In a statement, Wyden said that “investors failing to pay tax they owe through cryptocurrency is a real problem,” but that the law as previously written was too broad and would have applied to actors who would not have been able to fulfill its mandates.
> The changes will lead to the bill raising $5.2 billion less than the $28 billion envisaged by the initial legislation, according to a Politico report citing the Joint Committee on Taxation.
To me, a layman, it seems that they are trying to allow more loopholes for tax evasion through buying and selling bitcoin in certain ways? Or am I completely off base?
EDIT: Here [0] is the actual ammendment, so it seems maybe it's just protecting people doing development work on cryptocurrency software/hardware from having to pay taxes.. I think
[0] https://news.ycombinator.com/item?id=28075226
You’re off base. The original definition was putting tax and KYC requirements on people who don’t have, and can’t get, that information. Network nodes facilitate transactions, they don’t broker them. Its like treating an exchanges electricity provider as part of the equity trade.
It’s not tax evasion. The law as originally stated would have crippled the industry in the US.
It’s not tax evasion. The law as originally stated would have crippled the industry in the US.
Devil's advocate for a moment... the definition of a broker is "a person who buys and sells goods or assets for others," or it can mean to "arrange or negotiate" a deal or plan.
How is a miner not a broker then? They accept transactions and then place them on a blockchain by performing some kind of work. Sure, at the moment few if any cryptos are definitely securities, but what is going to happen when a company creates (for example) a wrapped SP500 token? A "traditional" broker can't just trust anyone to record a transaction, there is a lot of regulation.
Will there be a class of tokens that can only be mined by people who can do KYC on them? Why is a miner exempt from caring about what transactions they accept?
How is a miner not a broker then? They accept transactions and then place them on a blockchain by performing some kind of work. Sure, at the moment few if any cryptos are definitely securities, but what is going to happen when a company creates (for example) a wrapped SP500 token? A "traditional" broker can't just trust anyone to record a transaction, there is a lot of regulation.
Will there be a class of tokens that can only be mined by people who can do KYC on them? Why is a miner exempt from caring about what transactions they accept?
Miners never have custodial control of the funds in those transactions.
They are much more like auditors or accountants than brokers.
They are much more like auditors or accountants than brokers.
> The original definition was putting tax and KYC requirements on people who don’t have, and can’t get, that information.
You fundamentally misunderstand regulation. If someone can’t/won’t do something, regulation is enacted to either compel them or to outlaw their behavior.
Your tacit suggestion that because miners can’t do something means the law is flawed, is akin to saying “oh well burglars won’t pay for the goods so oh well”. If we pass a law that miners can’t follow, then mining becomes illegal. We do this all time, especially in finance.
A more realistic example is “WhatsApp is E2E encrypted so traders can’t be monitored”. This means WhatsApp is a non-compliant (“illegal”) facility to transact in most regulated markets.
You fundamentally misunderstand regulation. If someone can’t/won’t do something, regulation is enacted to either compel them or to outlaw their behavior.
Your tacit suggestion that because miners can’t do something means the law is flawed, is akin to saying “oh well burglars won’t pay for the goods so oh well”. If we pass a law that miners can’t follow, then mining becomes illegal. We do this all time, especially in finance.
A more realistic example is “WhatsApp is E2E encrypted so traders can’t be monitored”. This means WhatsApp is a non-compliant (“illegal”) facility to transact in most regulated markets.
I rarely notice politicians, but Wyden is frequently in the fray on the right side of a lot of issues I hear about. Seems like he got this one right, again.
Interesting, thank you
Sidetopic, but I am rather disappointed that Venmo has been pressuring me via email to embrace crypto and imagine behind the scenes they own however much, trades only get executed internally, and they do their best to extract transaction fees. To me this is the antithesis of what the crypto community was looking to stand for in terms of privacy and independence from traditional banking systems.
Venmo is pushing crypto hard because Instant Payments are coming down the pipeline from the Fed in the next 18 months (already in beta testing with a handful of smaller banks, they're ahead of schedule based on my reading of the roadmap), and that kills Venmo (and Paypal to a lesser extend) if they don't have something to pivot to.
That's what you're seeing Visa, Paypal, and others attempt to go upmarket (business payments) or branch out (crypto, Plaid acq attempt).
That's what you're seeing Visa, Paypal, and others attempt to go upmarket (business payments) or branch out (crypto, Plaid acq attempt).
Venmo's core value right now is that it's ubiquitous. Everyone has a Venmo account and everyone trusts it. I paid an electrician through it yesterday -- no new Fed tech is going to replace it overnight, just like Zelle didn't kill it either.
https://www.forbes.com/sites/ronshevlin/2019/02/11/venmo-ver... (According to company reports, Zelle processed $35 billion in P2P (person-to-person) payments in Q4 2018 versus $19 billion for Venmo. For the full year, Zelle's total was $122 billion, almost double Venmo's $62 billion.) (2019)
https://www.zellepay.com/press-releases/zeller-closes-2020-r... (Zelle® Closes 2020 with Record $307 Billion Sent on 1.2 Billion Transactions, Nearly 7,000 financial institutions are represented in the Zelle Network via their customers using the Zelle common mobile app, Achieving ubiquity with banks and credit unions: Nearly 500 new financial institutions of all sizes joined the Zelle Network® in 2020)
https://www.businessofapps.com/data/venmo-statistics/ (Venmo key statistics. Venmo processed $159 billion in total payment volume in 2020)
If anyone can plug into instant payments, your value as an instant payment provider that just does payments will fall rapidly.
https://www.zellepay.com/press-releases/zeller-closes-2020-r... (Zelle® Closes 2020 with Record $307 Billion Sent on 1.2 Billion Transactions, Nearly 7,000 financial institutions are represented in the Zelle Network via their customers using the Zelle common mobile app, Achieving ubiquity with banks and credit unions: Nearly 500 new financial institutions of all sizes joined the Zelle Network® in 2020)
https://www.businessofapps.com/data/venmo-statistics/ (Venmo key statistics. Venmo processed $159 billion in total payment volume in 2020)
If anyone can plug into instant payments, your value as an instant payment provider that just does payments will fall rapidly.
Zelle is useless to me because my credit union (like many other banking organization) doesn't support it.
Really looking forward to a governmental, ubiquitous solution.
Really looking forward to a governmental, ubiquitous solution.
[deleted]
> to company reports, Zelle processed $35 billion in P2P (person-to-person) payments in Q4 2018 versus $19 billion for Venmo.
The thing that makes this a bit trickier is that Zelle is transparently used under the hood by some banks to move money between accounts owned by the same person. I've moved thousands of dollars between two of my accounts with Zelle but the alternative would have been an ACH transfer or depositing a check to myself, not Venmo.
I know it's just one anecdote, but when splitting a check, my social circle always reaches for Venmo, never for Zelle. And yet I've probably moved more total money via Zelle because I occasionally use it for different, higher-value transactions.
There's some selection bias at play for different transaction types (including many where people might not even realize they're using Zelle) so we should be careful looking at only the headline numbers.
The thing that makes this a bit trickier is that Zelle is transparently used under the hood by some banks to move money between accounts owned by the same person. I've moved thousands of dollars between two of my accounts with Zelle but the alternative would have been an ACH transfer or depositing a check to myself, not Venmo.
I know it's just one anecdote, but when splitting a check, my social circle always reaches for Venmo, never for Zelle. And yet I've probably moved more total money via Zelle because I occasionally use it for different, higher-value transactions.
There's some selection bias at play for different transaction types (including many where people might not even realize they're using Zelle) so we should be careful looking at only the headline numbers.
I don't argue that Zelle is successful but it certainly did not kill Venmo. Venmo is alive and well. I think Zelle is more useful for things like tenants paying landlords, while Venmo is more for splitting a restaurant bill, so it doesn't shock me that Zelle is processing a lot more coin.
> while Venmo is more for splitting a restaurant bill
One might assume this feature will be built into banking apps as time goes on and instant payments are ubiquitous. It's already in my Chase iOS app [1]. I argue it's a feature, not a business. I concede we'll have to see what happens when deposit accounts at real banks are given access to instant payment functionality.
[1] https://www.chase.com/digital/customer-service/helpful-tips/...
One might assume this feature will be built into banking apps as time goes on and instant payments are ubiquitous. It's already in my Chase iOS app [1]. I argue it's a feature, not a business. I concede we'll have to see what happens when deposit accounts at real banks are given access to instant payment functionality.
[1] https://www.chase.com/digital/customer-service/helpful-tips/...
> Venmo's core value right now is that it's ubiquitous
Is it? I just did a straw poll of people in my office, located in Canada. People from 28-50 no one has venmo. 3 of 15 knew about it.
Now my sample may not match the rest of the world as these are some pretty highly educated and high networth individuals so venmo isn't something that would really benefit us, but it does really weaken the ubiquitous claim
Where is Venmo ubiquitous?
Is it? I just did a straw poll of people in my office, located in Canada. People from 28-50 no one has venmo. 3 of 15 knew about it.
Now my sample may not match the rest of the world as these are some pretty highly educated and high networth individuals so venmo isn't something that would really benefit us, but it does really weaken the ubiquitous claim
Where is Venmo ubiquitous?
The USA.
> Where is Venmo ubiquitous?
Always remember that consumer banking in the US is at least a decade behind everywhere else in the first world. Apps that allow cheap/free and fast money transfers were and still are a big deal there.
Always remember that consumer banking in the US is at least a decade behind everywhere else in the first world. Apps that allow cheap/free and fast money transfers were and still are a big deal there.
Sucks for Venmo, cash, etc. But clearly those apps can simply uptake instant payments (affiliate with bank or gain bank status) and stay relevant?
Interesting, I’ll have to research that. It seems like something that would take a long time to deploy.
It's been in the works for years.
https://www.pymnts.com/news/faster-payments/2021/five-banks-...
https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
https://www.pymnts.com/news/faster-payments/2021/five-banks-...
https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
Thanks for sharing, I as well didn't know about this. I've enrolled/used Zelle (via my bank app) and it's just a travesty of usability to me, after awhile I ditched it (and I don't hear a lot in the news about Zelle these days).
What's your hot take on this new FedNow system vs. what Zelle tries to achieve via ACH? Do you think it'll be more "Venmo-like" (low friction) or will it end up a usability mess due to regulation requirements?
What's your hot take on this new FedNow system vs. what Zelle tries to achieve via ACH? Do you think it'll be more "Venmo-like" (low friction) or will it end up a usability mess due to regulation requirements?
Zelle is owned by a consortium of the largest US banks [1], and does much more volume than Venmo (because its built into the UX of those participating in Zelle's real time payment network [2]). Congress strongly encouraged the Fed to develop FedNow to prevent Zelle from keeping smaller banks out of instant payment infra. FedNow will eventually replace the ACH system.
Hot take: banks being banks, they'll crowd out fintechs because fintechs aren't chartered banks regardless of the UX (which is why Bancorp Bank is the underlying for so many fintechs).
[1] https://techcrunch.com/2017/06/12/zelle-the-real-time-venmo-...
[2] https://www.zellepay.com/get-started
Hot take: banks being banks, they'll crowd out fintechs because fintechs aren't chartered banks regardless of the UX (which is why Bancorp Bank is the underlying for so many fintechs).
[1] https://techcrunch.com/2017/06/12/zelle-the-real-time-venmo-...
[2] https://www.zellepay.com/get-started
> FedNow will eventually replace the ACH system
Now that's interesting - does that imply that the clearing delays in transfer (say your US Bank to your Brokerage, ~3 days ACH) will disappear and FedNow makes that an "instant" (within 1 day let's say) settled transfer? Very intriguing.
Now that's interesting - does that imply that the clearing delays in transfer (say your US Bank to your Brokerage, ~3 days ACH) will disappear and FedNow makes that an "instant" (within 1 day let's say) settled transfer? Very intriguing.
Yep - the goal is to move to ~real time transactions so settlement is instantaneous for most transactions with a much shorter window for settlement for those txs over some threshold (initial working docs said $25k, but it'll likely be larger by the time it rolls out).
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Venmo is clearly offering a service with the conveniences and ease of use that come with it. If you do not see the value and fees of that service, you can skip it and set up your own wallet, BTC node, etc.
It seems rather unprecedented that there are currently US citizens who are billionaires because of their crypto holdings, without the government having any insight into precisely who these people are. It seems like eventually the government is going to push for more onerous reporting laws to return to the usual equilibrium, where the government has at least some basic idea regarding who owns what (which I think they currently have, even for offshore bank accounts)
(not that I in any way support more aggressive reporting laws)
(not that I in any way support more aggressive reporting laws)
It's not a big deal. It isn't that different than finding a significant amount of oil/precious metals on your land. As soon as you try to extract the value of the resource/crypto, the government will know. If you just sell it, the crypto exchange will report it to the IRS. If you try to trade/buy goods with it directly, any assets you get will create a paper trail that the IRS will eventually discover.
Consider the fact that illegal enterprises like drug dealers will pay a premium to launder the money (probably >=10%) and then pay taxes on the remainder. If you have the gains legally (crypto), it makes little sense to not just pay the normal taxes.
Also, if you made a significant amount of money on any crypto, you probably held it for more then a year at which point to capital gains tax is probably at most only 15% (<$441,000 ordinary income). And if you quit your job prior to selling (i.e had ordinary income <$40,000) then the capital gains would go to 0% (seems wrong (?) and maybe you would have to pay the alternative minimum tax... not quite sure).
Anyway the taxes are basically nothing compared to the benefits of having 100% clean money that can be reinvested and make 10-15% in the stock market.
Consider the fact that illegal enterprises like drug dealers will pay a premium to launder the money (probably >=10%) and then pay taxes on the remainder. If you have the gains legally (crypto), it makes little sense to not just pay the normal taxes.
Also, if you made a significant amount of money on any crypto, you probably held it for more then a year at which point to capital gains tax is probably at most only 15% (<$441,000 ordinary income). And if you quit your job prior to selling (i.e had ordinary income <$40,000) then the capital gains would go to 0% (seems wrong (?) and maybe you would have to pay the alternative minimum tax... not quite sure).
Anyway the taxes are basically nothing compared to the benefits of having 100% clean money that can be reinvested and make 10-15% in the stock market.
> And if you quit your job prior to selling (i.e had ordinary income <$40,000) then the capital gains would go to 0% (seems wrong (?) and maybe you would have to pay the alternative minimum tax... not quite sure).
Not a tax advisor, but I thought capital gains counts as taxable income? So someone who sells $50k worth of BTC will pay 15% on $10k.
Not a tax advisor, but I thought capital gains counts as taxable income? So someone who sells $50k worth of BTC will pay 15% on $10k.
>but I thought capital gains counts as taxable income
It's taxed, but at a different rate compared to ordinary income.
It's taxed, but at a different rate compared to ordinary income.
Yes, and the rate depends on the amount of ordinary income you have (including short-term gains) and the amount of long-term capital gains. The capital gains rate is 0% under $40k (for single individuals) but ordinary income is calculated first (after deductions) and the total income determines the bracket. So if you have $40k or more in ordinary income (after deductions) then the 0% rate won't apply to any of your long-term gains. If you had $20k in ordinary income (a.d.) then the first $20k of long-term gains would be taxed at 0% and the next $400k (from $40k to $440k of total income) would be taxed at 15%, with anything beyond that taxed at 20%.
Also, if you have significant income from investments then a surcharge of 3.8% in Net Investment Income Tax may be added on top of the long-term capital gains rate for part of that income for a marginal rate of 18.8% or 23.8%.
Also, if you have significant income from investments then a surcharge of 3.8% in Net Investment Income Tax may be added on top of the long-term capital gains rate for part of that income for a marginal rate of 18.8% or 23.8%.
The problem is, you can't transfer the oil to others with the click of a button for other things.
Tax evasion is very easy when you have crypto. You couldn't just sell it all at an exchange tax-free, but you can convert it into foreign currencies, goods, and services all without any oversight.
Tax evasion is very easy when you have crypto. You couldn't just sell it all at an exchange tax-free, but you can convert it into foreign currencies, goods, and services all without any oversight.
maybe taxes are bad and we should do something else
> Also, if you made a significant amount of money on any crypto, you probably held it for more then a year at which point to capital gains tax is probably at most only 15% (<$441,000 ordinary income).
Ownership of other assets tends to have legal documents of when it was purchased though. How does anyone know how long you've held it? You could prove it if it's been in the same wallet the whole time, with the transaction ID, and proof of ownership of the wallet. But what if you transferred it between wallets, and lost the first?
Ownership of other assets tends to have legal documents of when it was purchased though. How does anyone know how long you've held it? You could prove it if it's been in the same wallet the whole time, with the transaction ID, and proof of ownership of the wallet. But what if you transferred it between wallets, and lost the first?
>How does anyone know how long you've held it?
The blockchain?
The blockchain?
The Blockchain doesn't mandate that you hold the private key of any wallet you owned since you acquired some Bitcoin assets.
And a piece of paper doesn't mandate that you actually transacted on the date it claims you did.
all good points
> It seems rather unprecedented that there are currently US citizens who are billionaires because of their crypto holdings,
Perhaps, but it’s not as common as it sounds. Maybe there are people out there who invested $33,000 into Bitcoin when it was $1 and then didn’t sell a single penny as it rose and crashed multiple times, but the number of people achieving billionaire status without starting out with tens of millions invested is going to be quite small.
Also, once you pass a specific threshold of wealth it doesn’t pay to flout the rules and risk increasing consequences. Famous and wealthy people have gone to prison for tax evasion in the range of millions of dollars. Trying to dodge taxes to remain a billionaire instead of paying the relatively small capital gains taxes wouldn’t be a rational move.
Anyone sitting on huge amounts of crypto worth has likely hired teams of lawyers to cross every t and dot every i to stay in full compliance rather than put their windfall at risk for some irrelevant level of taxation.
Perhaps, but it’s not as common as it sounds. Maybe there are people out there who invested $33,000 into Bitcoin when it was $1 and then didn’t sell a single penny as it rose and crashed multiple times, but the number of people achieving billionaire status without starting out with tens of millions invested is going to be quite small.
Also, once you pass a specific threshold of wealth it doesn’t pay to flout the rules and risk increasing consequences. Famous and wealthy people have gone to prison for tax evasion in the range of millions of dollars. Trying to dodge taxes to remain a billionaire instead of paying the relatively small capital gains taxes wouldn’t be a rational move.
Anyone sitting on huge amounts of crypto worth has likely hired teams of lawyers to cross every t and dot every i to stay in full compliance rather than put their windfall at risk for some irrelevant level of taxation.
There aren't a huge number of crypto billionaires (though your calculations miss those who rode other crypto waves with their bitcoin profits), but there are a decent number of people in the upper 10-figure lower 11 figure range.
Outside of Satoshi, the number of those people who are anonymous at a governmental level has got to be quite small.
Outside of Satoshi, the number of those people who are anonymous at a governmental level has got to be quite small.
Oops, meant 8-9 figure range. Too many zeroes. $50+ million.
Agree with all of this, except that I don't think these folks are currently reporting their holdings, as there is currently no requirement to do this.
It's very unlikely there are US citizens in the US who are Bitcoin billionaires and have not reported it and paid taxes to the government. Unless you're planning to flee the country, at some point the IRS will catch up with you. Remember that Bitcoin is an open, public ledger of every transaction. If someone is a billionaire, paying capital gains taxes is worth their freedom without a doubt.
There is currently absolutely no requirement in the US to report crypto holdings, only crypto sales.
So it is very likely there are such people, especially since it is common to divide large holdings between many separate addresses, making it impossible to infer holdings from sales income.
So it is very likely there are such people, especially since it is common to divide large holdings between many separate addresses, making it impossible to infer holdings from sales income.
Good point. By "Bitcoin Billionaire" I mean people who had cashed out. If you haven't ever sold, you don't owe taxes.
But the IRS needs a mechanism to understand and interpret these ledgers, right? And the IRS enforcement is only as good as the people who are doing the enforcing.
I'm an engineer and I barely understand crypto, what hope does an IRS auditor have?
I'm an engineer and I barely understand crypto, what hope does an IRS auditor have?
The IRS has teams of crypto experts and they use tools like Chainalysis that do much of the low level analysis for them. Also, they get data from crypto exchanges so when someone sells Bitcoin for dollars to cash out, Coinbase will (in most cases) send the IRS the 1099.
Like the rest of the US tax system, it's based on the tax payer being required to submit what she owes. If she lies about her income, the enforcement comes from the risk of IRS doing an audit and asking you to show where you got your funds from. It's no different than if you own a restaurant or other private business. You can misreport your earnings, but the risk is the IRS will audit you and you will get fined or possibly go to jail.
Like the rest of the US tax system, it's based on the tax payer being required to submit what she owes. If she lies about her income, the enforcement comes from the risk of IRS doing an audit and asking you to show where you got your funds from. It's no different than if you own a restaurant or other private business. You can misreport your earnings, but the risk is the IRS will audit you and you will get fined or possibly go to jail.
Crypto experts are predicting insane valuations for BTC, at the same time USD value will drop (rather people will lose confidence in USD).
What I fear is, will Uncle Sam just let the USD go down the drain and watch doing nothing?
What I fear is, will Uncle Sam just let the USD go down the drain and watch doing nothing?
This headline might as well be click bait.
It's important to remember that this is a proposed amendment. It won't pass unless the infrastructure gang supports it. And it's very unlikely that they will support it, because that would mean that the bill isn't fully funded. Not being funded would kill the bill, because the Republicans who support it are demanding full funding.
https://www.politico.com/news/2021/08/03/senate-bipartisan-i...
It's important to remember that this is a proposed amendment. It won't pass unless the infrastructure gang supports it. And it's very unlikely that they will support it, because that would mean that the bill isn't fully funded. Not being funded would kill the bill, because the Republicans who support it are demanding full funding.
https://www.politico.com/news/2021/08/03/senate-bipartisan-i...
The finance industry will never say no to yet another financial instrument. These people will trade anything if you leave it up to them.
What counts here as a digital asset? World of Warcraft coins? Steam collectible cards?
Sounds like it is a defined term: https://www.rpc.senate.gov/legislative-notices/hr-3684_infra...
Good source.
"Additionally, the provision clarifies that the definition of specified security includes a digital asset, which is defined as any digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology."
That means that WoW coins don't count (but NFTs do).
"Additionally, the provision clarifies that the definition of specified security includes a digital asset, which is defined as any digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology."
That means that WoW coins don't count (but NFTs do).
Yes, those are all digital assets. It's a much broader class of assets than just virtual currencies (ie, cryptocurrencies) that includes photos, electronic records, and pretty much everything that's electronically stored and can be owned by a person.
It's also not really a legally defined term, so there are bound to be different definitions and interpretations. I got my definition from https://www.americanbar.org/content/dam/aba/administrative/b...
See also the wiki, which provides a similar definition: https://en.wikipedia.org/wiki/Digital_asset
It's also not really a legally defined term, so there are bound to be different definitions and interpretations. I got my definition from https://www.americanbar.org/content/dam/aba/administrative/b...
See also the wiki, which provides a similar definition: https://en.wikipedia.org/wiki/Digital_asset
> The changes will lead to the bill raising $5.2 billion less than the $28 billion envisaged by the initial legislation, according to a Politico report citing the Joint Committee on Taxation.
How do they come to this conclusion since taxes are still owed? Just that they expect about 5 billion in tax evasion from this?
How do they come to this conclusion since taxes are still owed? Just that they expect about 5 billion in tax evasion from this?
They're all made up numbers that exist only to get the bill passed.
I have heard that they are aiming to make an exception for Bitcoin only but try to stop everything else.
That would be a really horrible outcome because Bitcoin is by far the most outdated and least useful cryptocurrency.
That would be a really horrible outcome because Bitcoin is by far the most outdated and least useful cryptocurrency.
nobody is trying to make an exception for just bitcoin, they are trying to fix it for the whole class of crypto and broader digital payments
The new amendment does exactly that. He had good info.
https://www.coindesk.com/senator-who-wrote-controversial-cry...
Really evil to explicitly promote proof of work.
https://www.coindesk.com/senator-who-wrote-controversial-cry...
Really evil to explicitly promote proof of work.
Dogecoin is proof of work, so is Litecoin, and Monero, and Ethereum Classic and....
still should be more inclusive to validators, delegates, stakers and others, thats a separate discussion
still should be more inclusive to validators, delegates, stakers and others, thats a separate discussion
They want to exempt miners who are making Bitcoin from paying taxes on it? Why? They are making revenue from this activity. Of course they should pay taxes on that revenue.
This makes no sense at all.
This makes no sense at all.
Did you read the article? This is just about exempting non-exchanges from “broker” status i.e. keeping track of users’ personal information, transaction history, and data. The representatives said they agree people not paying taxes on crypto is a problem, but classifying them as brokers is not the solution.
Why isn’t it part of the solution? It seems like keeping track of who buys mining equipment (at least at large scale) would be a pretty important component in making sure that they pay taxes? Just like it’s important that brokerages report your stock transactions to the IRS.
This is not what broker requirements are.
If you are under broker requirements, and you wish to mine a new block, you must have, for every transaction you include in the block, the legal name of the person whose transaction it is, their address, and whether they are a politically compromised individual (ex, a general or politician of a nation that is not the US).
For every transaction you're going to include in the block.
This information is reasonable to expect from brokerages and exchanges, but not from miners, who are merely transaction processors.
If you are under broker requirements, and you wish to mine a new block, you must have, for every transaction you include in the block, the legal name of the person whose transaction it is, their address, and whether they are a politically compromised individual (ex, a general or politician of a nation that is not the US).
For every transaction you're going to include in the block.
This information is reasonable to expect from brokerages and exchanges, but not from miners, who are merely transaction processors.
Payment facilitators and processor would normally fall under some sort of KYC regime, I think (let's say when onboarding a merchant). Arguably, there isn't really a one-to-one correspondence with a miner, but to completely exempt miners here is an interesting twist.
This isn't about buying mining equipment either.
It's whether bitcoin miners need to KYC the other boxes they communicate with. It'd be like requiring bittorrent clients to have a copy of drivers license on file for every other node they make connections to.
It's whether bitcoin miners need to KYC the other boxes they communicate with. It'd be like requiring bittorrent clients to have a copy of drivers license on file for every other node they make connections to.
The proposal does not exempt anybody from paying taxes; it exempts people and organizations who are not actually brokers from reporting on their customers' activity.
This means that people with deep pockets, with money which came from who knows where and was laundered through Bitcoin, just bought the US Senate.
No, it just means that there are three people in the Senate who recognize that labelling wallet devs -- or anyone other than actual exchanges -- as "brokers" is impractical and serves no purpose.
https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%...
The amendment is short and explicitly notes that that the following categories do not count as brokers:
(A) validating distributed ledger transactions
(B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or
(C) developing digital assets or their cor- responding protocols for use by other persons, provided that such other persons are not cus- tomers of the person developing such assets or protocols.