[HN Gopher] Senators move to exempt Bitcoin, crypto miners from ...
___________________________________________________________________
Senators move to exempt Bitcoin, crypto miners from proposed U.S.
tax rules
Author : _-david-_
Score : 223 points
Date : 2021-08-05 15:08 UTC (7 hours ago)
(HTM) web link (www.marketwatch.com)
(TXT) w3m dump (www.marketwatch.com)
| jnwatson wrote:
| What counts here as a digital asset? World of Warcraft coins?
| Steam collectible cards?
| robot_no_419 wrote:
| 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
| RandomLensman wrote:
| Sounds like it is a defined term:
| https://www.rpc.senate.gov/legislative-notices/hr-3684_infra...
| jnwatson wrote:
| 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).
| purple_ferret wrote:
| > 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?
| tedunangst wrote:
| They're all made up numbers that exist only to get the bill
| passed.
| Guest42 wrote:
| 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.
| toomuchtodo wrote:
| 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).
| r00fus wrote:
| Sucks for Venmo, cash, etc. But clearly those apps can simply
| uptake instant payments (affiliate with bank or gain bank
| status) and stay relevant?
| Guest42 wrote:
| Interesting, I'll have to research that. It seems like
| something that would take a long time to deploy.
| toomuchtodo wrote:
| 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...
| spinax wrote:
| 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?
| toomuchtodo wrote:
| 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
| spinax wrote:
| > 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.
| mikeyouse wrote:
| 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).
| [deleted]
| [deleted]
| thehappypm wrote:
| 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.
| chollida1 wrote:
| > 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?
| thehappypm wrote:
| The USA.
| toomuchtodo wrote:
| 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(r) 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(r) 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.
| r00fus wrote:
| 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.
| [deleted]
| Gh0stRAT wrote:
| > 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.
| thehappypm wrote:
| 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.
| toomuchtodo wrote:
| > 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/...
| warkdarrior wrote:
| 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.
| drcode wrote:
| 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)
| thesausageking wrote:
| 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.
| drcode wrote:
| 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.
| thesausageking wrote:
| Good point. By "Bitcoin Billionaire" I mean people who had
| cashed out. If you haven't ever sold, you don't owe taxes.
| irishloop wrote:
| 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?
| thesausageking wrote:
| 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.
| PragmaticPulp wrote:
| > 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.
| TigeriusKirk wrote:
| 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.
| TigeriusKirk wrote:
| Oops, meant 8-9 figure range. Too many zeroes. $50+
| million.
| drcode wrote:
| 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.
| KingMachiavelli wrote:
| 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.
| drcode wrote:
| all good points
| yellow_lead wrote:
| > 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?
| gruez wrote:
| >How does anyone know how long you've held it?
|
| The blockchain?
| yellow_lead wrote:
| The Blockchain doesn't mandate that you hold the private
| key of any wallet you owned since you acquired some
| Bitcoin assets.
| gruez wrote:
| And a piece of paper doesn't mandate that you actually
| transacted on the date it claims you did.
| davidlee1435 wrote:
| > 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.
| gruez wrote:
| >but I thought capital gains counts as taxable income
|
| It's taxed, but at a different rate compared to ordinary
| income.
| nybble41 wrote:
| 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%.
| RIMR wrote:
| 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.
| ohhhhhh wrote:
| maybe taxes are bad and we should do something else
| animal_spirits wrote:
| > 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
| meowkit wrote:
| 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.
| qeternity wrote:
| > 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.
| animal_spirits wrote:
| Interesting, thank you
| deegles wrote:
| 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?
| cwkoss wrote:
| Miners never have custodial control of the funds in those
| transactions.
|
| They are much more like auditors or accountants than
| brokers.
| qeternity wrote:
| Custodial control is an oxymoron.
|
| They are facilitating a transaction. They can choose to
| accept or reject a transaction. In this capacity, they
| are most similar to a broker-dealer.
| cwkoss wrote:
| I see what you're saying, but a single miner can't reject
| a transaction, they can really only delay it.
| arcticfox wrote:
| 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.
| jb775 wrote:
| In other words, crypto miners are investing in lobbyists.
| memming wrote:
| Or lobbyists are investing in crypto.
| ilaksh wrote:
| 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.
| vmception wrote:
| 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
| runawaybottle wrote:
| The finance industry will never say no to yet another financial
| instrument. These people will trade anything if you leave it up
| to them.
| nyghtly wrote:
| 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...
| danielvf wrote:
| Finally found the text of the amendment:
|
| 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.
| Tepix wrote:
| I guess we need a proper CO2 tax to encourage better technology
| than proof of work
| jb775 wrote:
| If you use your brain to think through the initial 3-4 domino
| effects of a carbon tax, you'll quickly realize that the end
| result is the little guy paying the actual tax via inflation
| while the big guy actually enjoys _larger_ profit totals
| (maintaining profit margin % on newly inflated prices = more
| profit).
|
| The tricky part is actually using your brain to think it
| through.
| dontreact wrote:
| It depends on what you do with the revenue. If you
| distribute the revenue equally to everyone it stops being
| regressive and is actually progressive.
| purple_ferret wrote:
| Carbon tax is about transitioning away from carbon. If
| you're afraid about the little guy, couple it with a tax
| cut on lower incomes.
| arcticbull wrote:
| I believe the Canadian carbon tax is revenue neutral, and
| the amount collected is returned via income tax credits.
| gruez wrote:
| >you'll quickly realize that the end result is the little
| guy paying the actual tax via inflation while the big guy
| actually enjoys larger profit totals
|
| What's the alternative then?
|
| Implement regulations, forcing companies to increase costs
| => "enjoys larger profit totals "?
|
| Tax companies only, forcing them to pass them onto
| consumers => "enjoys larger profit totals"?
|
| Do nothing?
| jb775 wrote:
| > Do nothing?
|
| Yes. If the currently available options intended to fix a
| particular problem don't actually fix the problem while
| at the same time make the offending business more
| powerful while making the little guy less powerful...then
| yes, doing nothing is _clearly_ a better option in the
| short term.
| gruez wrote:
| >If the currently available options intended to fix a
| particular problem don't actually fix the problem
|
| Sounds like your expectation is too high. Either
| something stops climate change in its tracks, or it's not
| worth doing. Small incremental improvements? Nah, it
| won't solve the problem so let's not bother.
|
| >doing nothing is clearly a better option in the short
| term.
|
| But what about the long term?
| 0134340 wrote:
| Why tax anything then? The big guys will always have the
| resources to hire the best accountants to get the biggest
| discounts.
| adolph wrote:
| Agreed, the fairest form of funding is fee for service
| and not taxation.
| jonathanpeterwu wrote:
| 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
| awrence wrote:
| 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.
| zaphar wrote:
| 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.
| awrence wrote:
| 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.
| deltasixeight wrote:
| This is how most people go through life whether they
| believe it or not. In fact certain people will actually
| search for contradictory evidence in order to construct a
| logical scaffold that supports there current viewpoint.
|
| Nobody uses evidence to construct a conclusion, everybody
| uses evidence to support a conclusion that was likely
| already made with little evidence. That's how the world
| works. This is 100% what the parent poster to your reply
| is doing regardless of whether the evidence he presents
| is biased or true. In short the parent poster likely
| already had a huge time investment or actual investment
| sunk into crypto BEFORE he started gathering all this
| info to support a pre-made viewpoint.
|
| The question is, how do we present valid and logical
| arguments to the entire population when most of the
| population are too lazy like you and me to look stuff up
| or completely flip a viewpoint due to new evidence?
|
| +1 for being self aware.
| spywaregorilla wrote:
| I think bitcoin using 1 out of 1000 units of energy
| produced is pretty disgusting, hard stop.
| cwkoss wrote:
| > 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/P
| e...
|
| 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.
| IlliOnato wrote:
| [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.
| cwkoss wrote:
| 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.
| paulgb wrote:
| > 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.
| endless1234 wrote:
| >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.
| awrence wrote:
| 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).
| sunshinerag wrote:
| There is nothing in POW that requires CO2 emissions.
| p_l wrote:
| 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...
| politician wrote:
| 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.
| sunshinerag wrote:
| 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.
| arcticbull wrote:
| Bitcoin is the single least efficient system ever
| conceived of or reduced to practice by mankind.
| sunshinerag wrote:
| Is there a more efficient system to arrive at consensus
| of a state in a distributed, trust-less, permission less
| manner?
| arcticbull wrote:
| Well there's proof of stake.
| vkou wrote:
| 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.
| sunshinerag wrote:
| 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.
| vkou wrote:
| > 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.
| sunshinerag wrote:
| 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.
| sputknick wrote:
| 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.
| whichquestion wrote:
| 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...
| tornato7 wrote:
| 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.
| casi18 wrote:
| 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
| overtonwhy wrote:
| 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/
| vmception wrote:
| 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.
| tedunangst wrote:
| There's a button you can click to stake ethereum on
| Coinbase, which seems a bit past the vapor stage.
| robcohen wrote:
| PoS is already working in Cardano, Tezos, and Algorand
| (among others).
| Taek wrote:
| 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.
| akira2501 wrote:
| > 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?
| vel0city wrote:
| 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.
| RamshackleJ wrote:
| 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.
| IfOnlyYouKnew wrote:
| Either transaction costs go up, or electricity usage per
| transaction goes down. Anything else just doesn't add up.
| arcticbull wrote:
| 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.
| TotalCost = DirectCost +
| ProportionalAllocationOfBlockReward
|
| The value of the block reward is proportional to the
| price of bitcoin, and this block reward determines the
| ceiling of the consumption of resources in mining. The
| floor is determined by prisoners dilemma and so likely
| approaches the ceiling at the limit.
|
| 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.
| andruby wrote:
| 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.
| vel0city wrote:
| 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.
| godelski wrote:
| 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.
| snikeris wrote:
| It's the same transaction throughput regardless of the
| number of miners.
| idiotsecant wrote:
| Same transaction throughput, but not same security.
| arcticbull wrote:
| 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.
| arcticbull wrote:
| Unless the tax applies globally then they'll just flee to
| Kazakhstan. Oh wait; they won't have to flee far.
| ComodoHacker wrote:
| This would just increase the cost of electricity and thus the
| cost of living for everybody, and won't affect crypto miners
| much.
| api wrote:
| 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.
| admax88q wrote:
| 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.
| Groxx wrote:
| 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.
| bee_rider wrote:
| 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.
| Groxx wrote:
| 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.
| adolph wrote:
| > 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.
| X6S1x6Okd1st wrote:
| 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.
| kelnos wrote:
| 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...
| X6S1x6Okd1st wrote:
| Miners typically get their funds as income, not
| necessarily cap gains.
| freeone3000 wrote:
| It's a gain based on your invested capital, isn't it?
| It's textbook capital gains. PoS, PoW, whatever.
| X6S1x6Okd1st wrote:
| Odd that you call it textbook capital gains, what
| textbook are you working from?
|
| It seems pretty clearly like income to me.
| vmception wrote:
| 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.
| emteycz wrote:
| No, mining is in no way capital gains. Capital gains is
| asset price increase.
| vel0city wrote:
| A baker buys an oven which they use to bake bread. They
| sell the bread for dollars. Is that capital gains?
| barbecue_sauce wrote:
| Under that definition, almost all income would be
| considered capital gains.
| godelski wrote:
| 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.
| 3np wrote:
| > (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.
| notJim wrote:
| 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.
| cwkoss wrote:
| 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.
| JumpCrisscross wrote:
| > _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.
| 3np wrote:
| The biggest issues were less with the tax part and more
| with requirements around KYC, data gathering, and
| reporting.
| cwkoss wrote:
| 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.
| JumpCrisscross wrote:
| > _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.
| cwkoss wrote:
| 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.
| godelski wrote:
| 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.
| nybble41 wrote:
| > 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.
| robbedpeter wrote:
| These type of riders in must-pass omnibus bills are
| abominations.
| backprop1993 wrote:
| 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.
| uncomputation wrote:
| 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.
| skybrian wrote:
| 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.
| freeone3000 wrote:
| 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.
| RandomLensman wrote:
| 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.
| cwkoss wrote:
| 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.
| flyingfences wrote:
| 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.
| dougSF70 wrote:
| 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.
| overtonwhy wrote:
| Bitcoin is built on a house of Tether.
| https://www.coindesk.com/tether-first-reserve-composition-re...
| vmception wrote:
| 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.
| fabianhjr wrote:
| > 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)
| nickthemagicman wrote:
| 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.
| spicymaki wrote:
| > 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.
| whateveracct wrote:
| BTC can be tracked better than cash
| nprz wrote:
| So why are ransomware hackers never prosecuted?
| tablespoon wrote:
| > 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...
| junipertea wrote:
| Why not set all US system to have russian locale?
| nprz wrote:
| So why not just send the payment to a Russian bank?
| tablespoon wrote:
| > 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.
| zaphar wrote:
| 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.
| nprz wrote:
| So you're saying sending money to a bitcoin address would
| help obscure the identity of the receiver?
| zaphar wrote:
| 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.
| khuey wrote:
| Because they live and operate in jurisdictions without
| extradition treaties.
| nprz wrote:
| So they might as well just ask for their ransom via a
| wire transfer or paypal? Since their identity will be
| known anyway.
| tylersmith wrote:
| 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.
| nprz wrote:
| 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?
| khuey wrote:
| 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.
| amalcon wrote:
| Because they typically operate out of jurisdictions that
| don't feel like prosecuting them.
| nprz wrote:
| Why not just ask for a paypal or a wire transfer then? If
| they don't care about revealing their identity?
| nitrogen wrote:
| Those are usually easily reversible.
| meowface wrote:
| 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.
| CamelCaseName wrote:
| 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.
| gzer0 wrote:
| 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...
| fabianhjr wrote:
| > 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.
| drcode wrote:
| Sure, if you don't use mixers
| ghostbrainalpha wrote:
| 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?
| tracedddd wrote:
| 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.
| drcode wrote:
| Not too difficult, though I've never done it so can't say
| for sure.
| jondwillis wrote:
| Or, swap to a privacy token and back.
| drcode wrote:
| 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.
| nybble41 wrote:
| 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.
| rblatz wrote:
| Yes, laundering money does tend to obscure the source of
| money.
| drcode wrote:
| Money laundering is when you make it look like illicit
| money derived from a legitimate income stream, paying the
| taxes that result from such income.
| dragontamer wrote:
| 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.
| vmception wrote:
| 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.
| sleepybrett wrote:
| 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...
| dragontamer wrote:
| > 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.
|
| ----------
|
| 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.
| meowface wrote:
| >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.
| dragontamer wrote:
| 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.
|
| ----------
|
| > 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.
| vmception wrote:
| 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.
| meowface wrote:
| >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.
| dragontamer wrote:
| 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.
| meowface wrote:
| 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.
| vmception wrote:
| 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.
| piker wrote:
| Good luck moving more than a few $100ks in cash.
| [deleted]
| jandrese wrote:
| 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.
| JumpCrisscross wrote:
| > _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.
| JohnJamesRambo wrote:
| 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.
| de_keyboard wrote:
| 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.
| fabianhjr wrote:
| > 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)
| tmn wrote:
| Most people thought the internet was a threat to the
| establishment. In all likelihood bitcoin was developed by the
| NSA.
| kelnos wrote:
| 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.
| saalweachter wrote:
| > ... 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.
| PragmaticPulp wrote:
| > 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.
| dougSF70 wrote:
| 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.
| PragmaticPulp wrote:
| > 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.
| dougSF70 wrote:
| 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.
| jazzyjackson wrote:
| 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.
| [deleted]
| slowmovintarget wrote:
| Wasn't Dogecoin originally intended as a joke, not a
| scam?
| dougSF70 wrote:
| 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.
| verdverm wrote:
| > 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.
| dougSF70 wrote:
| Point taken, this characterization is too broad.
| sleepybrett wrote:
| 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.
| hncurious wrote:
| "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...
| dmix wrote:
| 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.
| lamontcg wrote:
| Cannabis isn't a distributed ponzi scheme.
| mola wrote:
| 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.
| flyingfences wrote:
| 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.
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