Large German lobby organization supports ban on Bitcoins(forum.bitcoin.org)
forum.bitcoin.org
Large German lobby organization supports ban on Bitcoins
http://forum.bitcoin.org/index.php?topic=11061.0
7 comments
You probably knew this, but that statement is a bad mistranslation: "Die reale Wirtschaft darf nicht zum Monopoly-Spiel werden." = "The real economy must not become a Monopoly game." (note the capital M in Monopoly).
He isn't saying that bitcoin shouldn't monopolize the economy, he is saying that funny colored bills shouldn't be the economy. What the difference a capitalization makes...
However, can anyone point me at what a "real" economy is in the first place? Rare near-useless metal hauled from the depths of the ear = real economy? Rare near-useless bits hauled from the depths of the internet = no real economy?
He isn't saying that bitcoin shouldn't monopolize the economy, he is saying that funny colored bills shouldn't be the economy. What the difference a capitalization makes...
However, can anyone point me at what a "real" economy is in the first place? Rare near-useless metal hauled from the depths of the ear = real economy? Rare near-useless bits hauled from the depths of the internet = no real economy?
I understood this in the original parent's comment from "monopoly game", and I suspect the original parent understood it & meant it that way. Rarely would those words be used together not meaning the board game. (NB nouns in German are all capitalized).
In economics, in English, "real economy" refers to the creation of products and performance services as distinct from financial markets, but it's hard for me to tell if that's what is meant here.
[edit: fixed my post to refer to the OP ]
In economics, in English, "real economy" refers to the creation of products and performance services as distinct from financial markets, but it's hard for me to tell if that's what is meant here.
[edit: fixed my post to refer to the OP ]
Yes, the German "Realwirtschaft" is typically understood in the same way: production and services separate from financial "products" and services.
I am not sure what a "real" economy is either. It seems that government entities (lookin at you, Greece) can make up whatever rules they want and the German bankers will grudgingly support it in order to perpetuate and maintain their control. But if you are simply a group of anonymous world citizens looking for a means of exchanging things of value in a way that can't be manipulated by governments and bankers, then you are simply playing a Monopoly game.
I guess real vs everything else economy can be kinda defined as... take all 'economic' activity. Put everything into one of two groups. The group for which you can eliminate without harming your physical ability to continue to operate the other group is the 'not real' economy.
Or in the words of my econ prof, the real economy is an engine that runs on the lubricant of money/currency. In other words, -any- currency market is by definition 'not the real economy'.
Or in the words of my econ prof, the real economy is an engine that runs on the lubricant of money/currency. In other words, -any- currency market is by definition 'not the real economy'.
This is surprising. Aren't they aware that this is probably the best publicity that Bitcoin could hope for?
Not in Germany. The finance office has made billions recently because nearby tax havens like Luxembourg and Switzerland were betrayed by bank employees. If this lobby organization says bitcoin might be abused for tax evasion, money laundering and illegal transactions, you can be sure many people in Germany will avoid it. Besides, I think the whole project is pretty naive ..
> proven means of payment
Yeah, for example, a shared secret (credit card details; shared with everyone you pay to, or just a random guy behind your shoulder who had a good memory) is way better than Bitcoin's crypto.
And PayPal works only in some countries and is proven to sometimes ban upright accounts.
Are there any alternatives to Bitcoin, which are non-discriminating (in a same way paper cash is) and fairly secure to exchange online? I believe "real economists" had failed to provide any solution in this field.
Yeah, for example, a shared secret (credit card details; shared with everyone you pay to, or just a random guy behind your shoulder who had a good memory) is way better than Bitcoin's crypto.
And PayPal works only in some countries and is proven to sometimes ban upright accounts.
Are there any alternatives to Bitcoin, which are non-discriminating (in a same way paper cash is) and fairly secure to exchange online? I believe "real economists" had failed to provide any solution in this field.
The so called "lobby organization" says on their website "we are the web" - a statement which usually pretty much disqualifies one from speaking for anyone but themselves.
is it possible to stay "above board" with bitcoins? i.e., pay capital gains tax when you cash out, or in someway pay taxes on your bitcoin income?
I think the complicated decision here is how to classify Bitcoins:
If you treat Bitcoins as currency you would need to state the value of your Bitcoin income on your tax statement. However, when doing so you would need to convert the Bitcoin value to your government's local currency, so that taxes can be calculated. The problem here is that the Bitcoin market is still relatively small and that you have no guarantee that you can sell a given amount of Bitcoins at a given price. E.g., you may have earned 100.000 BTC in a given year. However, when you try to sell all of them on the Bitcoin exchange markets at the same time, it may be possible that you crash the market. So you would need to pay taxes in your governments currency for something that you cannot sell at the estimated price.
On the other side, you could only declare income resulting from selling Bitcoins for a "real" currency. However, I'm not sure if your government will allow this, as this would allow for "creative" tax statements. E.g., as a freelancer you could charge your clients in Bitcoins, but then only convert Bitcoins to a "real" currency if you need to buy something that cannot be bought for Bitcoins. So if you would have charged your client in USD, you would have had to pay a large amount of taxes in a given year. However, by using Bitcoins, you can delay the payment of those taxes.
If you treat Bitcoins as currency you would need to state the value of your Bitcoin income on your tax statement. However, when doing so you would need to convert the Bitcoin value to your government's local currency, so that taxes can be calculated. The problem here is that the Bitcoin market is still relatively small and that you have no guarantee that you can sell a given amount of Bitcoins at a given price. E.g., you may have earned 100.000 BTC in a given year. However, when you try to sell all of them on the Bitcoin exchange markets at the same time, it may be possible that you crash the market. So you would need to pay taxes in your governments currency for something that you cannot sell at the estimated price.
On the other side, you could only declare income resulting from selling Bitcoins for a "real" currency. However, I'm not sure if your government will allow this, as this would allow for "creative" tax statements. E.g., as a freelancer you could charge your clients in Bitcoins, but then only convert Bitcoins to a "real" currency if you need to buy something that cannot be bought for Bitcoins. So if you would have charged your client in USD, you would have had to pay a large amount of taxes in a given year. However, by using Bitcoins, you can delay the payment of those taxes.
I expect it will work out like this:
1. If you mine a bit coin yourself, there are no tax consequences at that time. Your basis in that bitcoin is $0, or perhaps the cost of generating the bitcoin.
2. If you exchange that bitcoin for dollars, you realize a gain of the difference between the number of dollars received and your basis.
3. If you exchange that bitcoin for goods, you realize the difference between the market value of the goods and your basis, and your basis carries over to the goods.
In other words, it will likely be treated like any other barter transaction in which goods that are not like kind goods are traded.
Bitcoin is novel in how they are generated, and how transactions are tracked and verified, but it is not novel outside of those areas. Trading bitcoins for goods is not really any different than trading, say, shares of Apple stock for goods, or trading first edition books of 19th century literature for goods. The tax system knows how to deal with these situations (and to prevent their abuse).
1. If you mine a bit coin yourself, there are no tax consequences at that time. Your basis in that bitcoin is $0, or perhaps the cost of generating the bitcoin.
2. If you exchange that bitcoin for dollars, you realize a gain of the difference between the number of dollars received and your basis.
3. If you exchange that bitcoin for goods, you realize the difference between the market value of the goods and your basis, and your basis carries over to the goods.
In other words, it will likely be treated like any other barter transaction in which goods that are not like kind goods are traded.
Bitcoin is novel in how they are generated, and how transactions are tracked and verified, but it is not novel outside of those areas. Trading bitcoins for goods is not really any different than trading, say, shares of Apple stock for goods, or trading first edition books of 19th century literature for goods. The tax system knows how to deal with these situations (and to prevent their abuse).
I've heard of gold prospectors doing something similar and only selling their gold nuggets when they need to make large purchases and otherwise living on the government dole because they have no regular income.
If it gets to the point you can do a significant number of transactions in bitcoin, it should hopefully be to a stable exchange rate.
What commodity-based currency has a "stable" exchange rate?
Where a thousand units won't move the market?
I think the most obvious way to classify bitcoins is to consider them as a fungible commodity (like gold). Just about anybody would accept gold as payment for something, but it is still classified as a commodity tax-wise.
Surly declaring your BC income on a tax return would take care of that?
Only if government is willing to collect bitcoin tax in bitcoins, without a conversion.
How would you value it though? If you accepted the coins at a $5 per bitcoin rate for a product valued at $5, but the rate at the time of the tax return is $15 per bitcoin, do you pay tax on the $15 or the $5?
That is merely an accounting issue. Multinationals are dealing with currency translation all the time.
In your example you would of course pay tax from $15.
In your example you would of course pay tax from $15.
And even if you take a given rate you cannot be sure that you can really sell your coins for this rate. E.g., assume that you are one of those early miners who currently owns at least 400.000 BTC (see http://bitcoinreport.blogspot.com/2011/01/latest-bitcoin-top...). How do you declare this on your tax statement? Yes - in theory that's worth 4 million dollars. However, as soon as you try to sell your BTCs you will crash the market.
Do the rules for bartering apply to exchanges of goods and services for bitcoins? http://www.irs.gov/taxtopics/tc420.html
Would taxes be paid on generated bitcoins? or just transactions?
Interesting question.
I can give you a counter-example, why I think that taxes shouldn't apply to generated coins: Let's say you programm an application (or paint a picture, etc.) and it is easy to estimate the market value. Do you need to pay taxes for your application (or the picture) as long as you don't sell it? IMO it's the same with generated Bitcoins.
I can give you a counter-example, why I think that taxes shouldn't apply to generated coins: Let's say you programm an application (or paint a picture, etc.) and it is easy to estimate the market value. Do you need to pay taxes for your application (or the picture) as long as you don't sell it? IMO it's the same with generated Bitcoins.
I agree. But that seems a bit too intuitive for tax laws anywhere haha
This is an attempt at misdirection. If bitcoins take over the monetary system, they will naturally be stored in banks. No family man would walk around with his family's rainy day fund in his iPhone. For reasons of practical logistics, organized crime will use private banks that can be captured and destroyed.
What actually scares the bankers is loss of the ability to control the discount rate, which is a very legitimate concern. Human psychology being what it is, all economic systems end up running on credit and suffering from periodic crises of confidence. A fiat currency can simply print its way out of a deflationary terror, but a hard currency like bitcoin is well and truly screwed.
Seriously, how would you possibly bail out a company like AIG if it had written derivative contracts on bitcoins?
What actually scares the bankers is loss of the ability to control the discount rate, which is a very legitimate concern. Human psychology being what it is, all economic systems end up running on credit and suffering from periodic crises of confidence. A fiat currency can simply print its way out of a deflationary terror, but a hard currency like bitcoin is well and truly screwed.
Seriously, how would you possibly bail out a company like AIG if it had written derivative contracts on bitcoins?
So says the banker with the monacle.