BitCoin and Cryptocurrencies - Will they fail? My 3 Predictions!

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Great Post OP....

I agree that bitcoin is a fantastic investment, however its just like anything which is financially dependent on consumer reaction and the level of demand.. Its typically a financial bubble that will pop eventually as there are so many things which could cause it to flip and reduce in value.. What if governments did put a trade taxation on this?
 
michaelshezzer said:
Great Post OP....

I agree that bitcoin is a fantastic investment, however its just like anything which is financially dependent on consumer reaction and the level of demand.. Its typically a financial bubble that will pop eventually as there are so many things which could cause it to flip and reduce in value.. What if governments did put a trade taxation on this?
Click to expand...

Thank you for the comment.

BTC is a wonderful invention. Essentially, it was released as an experiment.
It is leading the way and laying the foundation for a FUTURE cryptocurrency but my opinion is, that BTC will fail eventually.

There are 2 types of BTC investor, those that have invested in the ideology and those that can only see $$$ signs in their eyes and are looking to make a killing.

Those invested in the ideology have invested heavily psychologically and emotionally and have been blinded to fact that it CAN fail, so therefore foolishly believe it CAN'T fail.

Those invested financially have little understanding and couldn't give a flying monkey about the ideology, all they care about is what money they can make, they don't care if BTC survives they just want to maximise their returns and will pull out when they see a signal to do so.
 
wexzone said:
how do you enforce trade taxation when you don't know who owns what and what country they are in?
Click to expand...

Obviously, it is hard to tax BTC whilst online as BTC BUT all they have to do is put a tax on the exchanges so that those that want to turn their into $$$ have to pay a % as tax.

Taxing BTC exchanges may be it's saviour.
If it is taxed people will just keep it online and trade/transfer, do business.
Making it unattractive to exchange for cash might be a good thing for BTC.
 
All I know for sure is that I have a .dat file on a USB stick at my local bank that is worth some good amount of money. What I also know is that I successfully used different cryptocurrencies for purchases of various physical goods both locally and online. Posting random price predictions from different news sites does not make any assumptions here right (or wrong).

(BTW: Not everything is about the US. I don't really care if your goverment is going on a taxing rampage when the chinese market is backing the prizes up. The chinese are really interested in cryptocurrencies, goverment included.)
 
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Black.Star said:
All I know for sure is that I have a .dat file on a USB stick at my local bank that is worth some good amount of money. What I also know is that I successfully used different cryptocurrencies for purchases of various physical goods both locally and online. Posting random price predictions from different news sites does not make any assumptions here right (or wrong).
Click to expand...

Agreed, but I hope you have backed up the .dat file in several other places too.

Black.Star said:
(BTW: Not everything is about the US. I don't really care if your goverment is going on a taxing rampage when the chinese market is backing the prizes up. The chinese are really interested in cryptocurrencies, goverment included.)
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This isn't disputed.
 
W130SN said:
Obviously, it is hard to tax BTC whilst online as BTC BUT all they have to do is put a tax on the exchanges so that those that want to turn their into $$$ have to pay a % as tax.

Taxing BTC exchanges may be it's saviour.
If it is taxed people will just keep it online and trade/transfer, do business.
Making it unattractive to exchange for cash might be a good thing for BTC.
Click to expand...

well, you can only tax something that you can enforce the tax on (company or entity in your jurisdiction). So, at most, that would mean only taxing US customers. Again, I ask, how do you determine who to tax when everything is in BTC? Just because someone is cashing into USD, does not make them a US resident, and certainly if it wasn't a US based exchange, there would be no way to tax that transaction.

And if exchanges get a tax, then everyone deals with localbitcoins and exchanges outside of the US, oh wait, most are already outside of the US.

It's not as easy as you think to regulate decentralized technologies.

EDIT: one more thing, you are already liable for capital gains on BTC, so it is being taxed as is. An additional tax would make no sense, and could certainly be challenged.
 
BitCoin will end just like Liberty Reserve did. Don't hold too much in your wallets!
 
wexzone said:
well, you can only tax something that you can enforce the tax on (company or entity in your jurisdiction). So, at most, that would mean only taxing US customers. Again, I ask, how do you determine who to tax when everything is in BTC? Just because someone is cashing into USD, does not make them a US resident, and certainly if it wasn't a US based exchange, there would be no way to tax that transaction.

And if exchanges get a tax, then everyone deals with localbitcoins and exchanges outside of the US, oh wait, most are already outside of the US.

It's not as easy as you think to regulate decentralized technologies.

EDIT: one more thing, you are already liable for capital gains on BTC, so it is being taxed as is. An additional tax would make no sense, and could certainly be challenged.
Click to expand...

I agree with you, it will be difficult but you must realise that they are working out how to do this now.
Just because one tax is already charged doesn't mean they can't introduce another. Just look up Windfall tax.
 
Bitcoin at the US Senate

On the 18th November, which is a bit over a week from now, members of the Bitcoin community will be testifying in front of the US Senate in two committee hearings:

1) Senate Homeland Security & Governmental Affairs (HSGAC) committee

2) Senate Banking committee

The hearings have been called so US representatives can learn about Bitcoin and in particular, about its impact on law enforcement and banking. The HSGAC hearing will have two panels. The first one consists of members of US LE agencies. The second is the industry panel and will have, amongst other people, Patrick Murck of the Bitcoin Foundation on it.

For those who don't know Patrick, he is pretty much "the Bitcoin lawyer" and is one of us - he has been involved behind the scenes with Bitcoin for a long time now, I talk with him frequently and I know he will do a great job. That said, Patrick was not our first choice. Actually the Senate invitation was for Jon Matonis, who was our first choice. Unfortunately Jon couldn't make it on such short notice. Gavin would have been our second choice, but he is in Australia visiting family at the moment and also was not available.

The selection of the other panelists are also, I think, good news for us - they're people with a strong understanding of the Bitcoin space, people who have got credibility and achievements under their belt. Unfortunately my understanding is that it would be a faux pas to reveal their names here for some reason, but you'll find out who they are in a week.

Preparatory work has already begun and Foundation staff are working on some written testimony that will be submitted along with the oral testimony. Patrick will be heading to DC soon in order to start rehearsing and preparing. As executive director, Jon is of course going to be instrumental in figuring out what we're going to say, although he's being helped by other members as well of course. If you want to suggest ideas and contribute, go join the Foundation and post to the forum.

In recent times I've occasionally seen people sometimes question what the purpose of the Foundation is. Well, this is one of the reasons it was created. There are many powerful institutions in our world run by people that simply don't or won't take part in forums like bitcointalk, mailing lists and so on. The way they operate is by holding meetings, conferences and hearings like this one. The Foundation not only funds development but acts as a bridge between these two very different worlds.

Thanks,

Mike Hearn
Chair, Law & Policy committee
Bitcoin Foundation

Source:https://bitcointalk.org/index.php?topic=329932.0
 
wexzone said:
well, you can only tax something that you can enforce the tax on (company or entity in your jurisdiction). So, at most, that would mean only taxing US customers. Again, I ask, how do you determine who to tax when everything is in BTC? Just because someone is cashing into USD, does not make them a US resident, and certainly if it wasn't a US based exchange, there would be no way to tax that transaction.
Click to expand...

The system will adapt. It will be a painful experience, but eventually they will have no choice. There are examples to that on the course of history. For example, the Romans arrested and executed Christians for nearly 300 years, but failed to stop the ever expanding adoption of the new religion among the enslaved nations. At the end, the empire adapted - Christianity became a must if you wanted to have any influence in the Roman society.

http://en.wikipedia.org/wiki/Persecution_of_Christians_in_the_Roman_Empire

As to taxation, there are alternative ways. One is voting for your preferred party with money - e.q. you give them enough money for 4 years, instead placing a vote.
 
W130SN said:
I agree with you, it will be difficult but you must realise that they are working out how to do this now.
Just because one tax is already charged doesn't mean they can't introduce another. Just look up Windfall tax.
Click to expand...
they can, but it can be contested,.

and then, to get around all that, just deal in localbitcoins and all the other exchanges that won't be subject to a tax.
 
Black.Star said:
All I know for sure is that I have a .dat file on a USB stick at my local bank that is worth some good amount of money. What I also know is that I successfully used different cryptocurrencies for purchases of various physical goods both locally and online. Posting random price predictions from different news sites does not make any assumptions here right (or wrong).

(BTW: Not everything is about the US. I don't really care if your goverment is going on a taxing rampage when the chinese market is backing the prizes up. The chinese are really interested in cryptocurrencies, goverment included.)
Click to expand...

Cool, I hope you are not storing your wallet.dat on a plain usb without encryption!

Here is a good way to secure your Bitcoins:

1. Add your addresses/private keys to a text file
2. Download TrueCrypt, make a TrueCrypt volume
3. When truecrypt asks you for a password to create, visit bitaddress.org, go to brain wallet, create a 8-9 word passphrase like apple banana cucumber dillpickle elephant fundraiser, use the private key as the password for your truecrypt volume
4. Add the text file into the truecrypt volume
5. Add the truecrypt volume to your flash drive, and since its well encrypted you can even email it to yourself

The good thing about this is that your addresses/private keys are not using a brainwallet, but your local file is encrypted well enough to if someone finds the file, they cannot do anything with it, because the private key which unlocks the truecrypt volume will be uncrackable. And noone will know the secret to finding the password (which is the 8-9 words hashed by SHA256 to create the private key which unlocks the truecrypt volume)
 
Patel said:
Cool, I hope you are not storing your wallet.dat on a plain usb without encryption!

Here is a good way to secure your Bitcoins:

1. Add your addresses/private keys to a text file
2. Download TrueCrypt, make a TrueCrypt volume
3. When truecrypt asks you for a password to create, visit bitaddress.org, go to brain wallet, create a 8-9 word passphrase like apple banana cucumber dillpickle elephant fundraiser, use the private key as the password for your truecrypt volume
4. Add the text file into the truecrypt volume
5. Add the truecrypt volume to your flash drive, and since its well encrypted you can even email it to yourself

The good thing about this is that your addresses/private keys are not using a brainwallet, but your local file is encrypted well enough to if someone finds the file, they cannot do anything with it, because the private key which unlocks the truecrypt volume will be uncrackable. And noone will know the secret to finding the password (which is the 8-9 words hashed by SHA256 to create the private key which unlocks the truecrypt volume)
Click to expand...

All good advice but read the following:

Police force more suspects to give up crypto keys
http://www.theregister.co.uk/2010/07/27/ripa_iii/

Key disclosure law
http://en.wikipedia.org/wiki/Key_disclosure_law

Breaking Hard-Disk Encryption
https://www.schneier.com/blog/archives/2012/12/breaking_hard-d.html

Elcomsoft Forensic Disk Decryptor
http://www.elcomsoft.com/efdd.html
[h=1][/h]



[h=1][/h]
 
W130SN said:
All good advice but read the following:

Police force more suspects to give up crypto keys
http://www.theregister.co.uk/2010/07/27/ripa_iii/

Key disclosure law
http://en.wikipedia.org/wiki/Key_disclosure_law

Breaking Hard-Disk Encryption
https://www.schneier.com/blog/archives/2012/12/breaking_hard-d.html

Elcomsoft Forensic Disk Decryptor
http://www.elcomsoft.com/efdd.html
Click to expand...

All those are based on if there are memory dumps on the original computer the volume was created on. And if your not doing anything illegal there is no need to worry about LE asking you for your keys.
 
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