this post was submitted on 04 Jul 2024

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Gaetz unveils bill allowing bitcoin tax payments (thehill.com)

submitted 5 months ago by [email protected] to c/politics

39 comments fedilink hide all child comments

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[–] 9point6 32 points 5 months ago (2 children)

Isn't gaetz one of the ones you wouldn't want near your kids?

[–] BassTurd 22 points 5 months ago

Yes, he is a Republican.

[–] [email protected] 2 points 5 months ago

Which is probably why he knows so much about Bitcoin

[–] [email protected] 21 points 5 months ago (2 children)

Someone is heavily invested in bitcoin.

Can we see his portfolio for a sec? Not saying there's an ulterior motive, but....

[–] MegaUltraChicken 3 points 5 months ago (1 children)

If I remember correctly, his buddy that got busted for getting fake ids for minors also spent a ton of government money buying GPUs to mine crypto.

[–] [email protected] 2 points 5 months ago (1 children)

Joel Greenberg, of the family that owns Greenberg Dental. I did not know about the crypto bullshit though.

[–] MegaUltraChicken 2 points 5 months ago

Yeah that's the guy.

https://gizmodo.com/joel-greenberg-the-tax-collector-tied-to-us-rep-matt-g-1846595381

[+] [email protected] -13 points 5 months ago* (last edited 5 months ago) (1 children)

A lot of congress is invested in Bitcoin. If you have anything in mutual funds, investments funds, pension funds, most of them have some degree of exposure to it. Even excluding that, 25-40% of Americans own crypto directly depending on what survey you read.

[–] dhork 17 points 5 months ago (1 children)

If you have anything in mutual funds, investments funds, pension funds, most of them have some degree of exposure to it.

Ok. I call bullshit on this. Funds do not hold crypto unless they explicitly say they do, like some of these crypto ETFs that have started up. The regulatory landscape is so weird for crypto right now that we don't even know if they are handled as a security or not. So I think it's safe to assume that fund managers are steering clear of it unless they explicitly call out that they are in it. Unless you mean indirect exposure through investing in Crypto related businesses like Coinbase, but even that's a stretch

Congress, on the other hand: yeah, they're all into it. How else would they get their foreign bribe money?

[+] [email protected] -7 points 5 months ago* (last edited 5 months ago) (1 children)

Ok. I call bullshit on this. Funds do not hold crypto unless they explicitly say they do, like some of these crypto ETFs that have started up.

It's more common than you think. Here's an article about the Wisconsin state pension fund investing in Bitcoin. You can pay taxes in Colorado with it and use it at the DMV. Pretty much every major bank has some exposure to it either by owning BTC outright or investing in adjacent technology. A little googling will find you plenty of more examples. And you are right, now that ETFs exist, we will see even easier institutional adoption.

The regulatory landscape is so weird for crypto right now that we don’t even know if they are handled as a security or not.

SEC has been incredibly clear that Bitcoin is not a security. The rest of them though, that's where they are murky on their language.

How else would they get their foreign bribe money?

They don't need Bitcoin for that, they can just legally accept those bribes in most cases or move around some money some other way while knowing there is a near zero chance they will ever get prosecuted for it. Ask Kushner how he does it.

[–] dhork 14 points 5 months ago* (last edited 5 months ago) (1 children)

Your first link illustrates my point; the Wisconsin pension fund disclosed their Bitcoin investment. I see a lot of speculation that other funds are, but no hard facts about it. If it is happening, it is super early. Here is a link from Fidelity stating that many funds are "thinking" about it:

https://www.nasdaq.com/articles/fidelity:-pension-funds-exploring-bitcoin-investments-on-etf-approval

It may happen on a broad scale (and I hope it does, I can use another 10x gain), but it's not there yet. If it happens, they will do it cautiously. The last thing they want is regulatory scrutiny for destroying a pension fund in the next exchange token crash.

Your second link also doesn't say what you think it does. It's a link to a digital tech consulting company, who seems to have a vested interest in pushing crypto into the mainstream. Even then, the link is not about these banks investing in Crypto, but about banks figuring out how to provide custody services to retail customers. OG Crypto Bros self-custody, of course, but that involves a bunch of steps that the general public doesn't want to bother with.

So, dont jump the gun on this.

[–] [email protected] 2 points 5 months ago

but about banks figuring out how to provide custody services to retail customers.

Opening a consulting firm to help implement this a bold business move, considering the FDIC doesn’t insure crypto and the FRB presumptively prohibits state member banks and their subsidiaries from holding most crypto-assets as principal.

[–] BassTurd 15 points 5 months ago (1 children)

Bitcoin and crypto is dumb and a waste of resources. We should tax it at 100% to kill off this unstable energy sink.

[+] [email protected] -22 points 5 months ago (2 children)

Bitcoin actually helps to incentivize the provisioning of renewables on the grid by evening out demand curves. Keep in mind that banking, finance, remittance services, all have an energy cost too, it just doesn't make headlines because it's not new or novel.

https://www.lynalden.com/bitcoin-energy/ https://www.youtube.com/shorts/6x_nfuNigI8

[–] legion02 13 points 5 months ago (1 children)

We could literally bank the energy in hydrogen to even the curves and be infinitely better off.

[–] [email protected] 2 points 5 months ago

hell, I'd even take direct carbon capture

[–] BassTurd 8 points 5 months ago (1 children)

Incentivizing renewables by demanding energy consumption. It's a waste. Not wasting evergy at all is better that than incentivizing renewables. It does something poorly that nobody needed at huge cost. Nothing crypto should be considered legal tender.

[+] [email protected] -10 points 5 months ago* (last edited 5 months ago) (2 children)

It enables me to send money to anybody anywhere on planet earth with a cell phone and a halfway reliable internet connection in under a second for pennies in fees. And I can send that money to anybody even if they have an unstable banking system, no banking system at all (billions of people), or their banking system excludes them due to their gender, sexuality, or status as a political dissident. Venmo can't do that, Paypal can't do that, my bank can't do that. It has a clear fiscal policy of a 21 million coin cap. It has faced attacks and attempted bans from nation states and world powers, yet it has reliably performed this function of sending money around for 15 years without a single hour of downtime, without a single hack, without a single bank holiday or failure or any kind. It has a market cap bigger than Sweden's GDP. It is more widely adopted than most national currencies. It can't be controlled, debased, or inflated by any corrupt central bank. It actually has use and value. You may not use it, but that doesn't mean other people don't get immense use out of it.

And it does this with <1% of global electricity usage, almost entirely from renewables since miners chase the cheapest electricity which comes from renewables and times of non-peak demand. Moving money around costs energy no matter how you do it. For a network that moves trillions of dollars every year, that's a pretty small amount of energy to do it with.

[–] BassTurd 10 points 5 months ago (1 children)

Waste. Of. Energy.

[–] dhork 7 points 5 months ago* (last edited 5 months ago) (1 children)

Bitcoin used to be valuable as permissionless peer-to-peer currency, but then it was ruined when it zoomed in price. Nobody transacts with it anymore, because it is a StOrE oF vAlUe.

The energy thing is a solvable problem, once Bitcoiners see the problem. BTC's PoW algorithm simply doesn't scale. The devs could slot in a new algorithm if they wanted to, and dramatically reduce BTC's power footprint. But they see the large energy expenditure as a feature, because they can say that all that energy is being used to secure the network.

[+] [email protected] -7 points 5 months ago* (last edited 5 months ago) (1 children)

Nobody transacts with it anymore, because it is a StOrE oF vAlUe.

I transact with it daily. Other people do to especially in the developing world, there is constant competition for blockspace, those people aren't just sending transactions between their own wallets. Its price has little to do with value as a transactional currency. I think you are conflating price with transaction fees, which lightning has solved. You can use a single on-chain transaction ($1.50) to open a lightning channel which can have over a billion transactions in it for less than a penny in fees each. Lightning transactions take under a second. You can use that lightning channel to transact with anybody else on lightning. All while being secured by main chain. It's powerful stuff and it's not even the only L2 in existence for Bitcoin.

BTC’s PoW algorithm simply doesn’t scale

It absolutely scales. It has scaled till now and will continue to do so. There are plenty of valid criticisms of PoW, this one isn't one of them. The energy is used to secure the network, it decides who can update blocks, that is literally the point. You can say that 'proof of ownership/stake' are 'secure enough' but there is no argument they are more secure. It's literally "who owns the coins controls the network" and once you get enough coins to 51% attack, you can 51% attack the network forever at no additional cost. It also causes increased centralization of wealth. Proof-of-work requires you to keep pouring money/resources/energy into your attack and when you can't do that any more, your attack essentially gets rolled back. Energy is the most equitably (but not perfectly equitably) distributed resource on earth.

[–] dhork 8 points 5 months ago (1 children)

This post triggered my /r/Bitcoin PTSD....

Nobody in this community cares about opening a tab on Lightning and needing to continually police it to make sure you don't lose your coins, but let me explain the Power thing a bit more.

Bitcoin's block confirmation algorithm is based on SHA-256, which is an algorithm that just uses computing capacity to work. Custom ASIC chips have been developed to solve that problem at a very high rate, and current Bitcoin mining farms just use a bunch of these in parallel to go faster and make more hashes. More chips = more power consumed.

But computing power is not the only resource that you can use for Proof-of-work. Other algorithms are designed to use a large amount of memory also, and memory is harder to scale than computing power. Other algorithms enforce that multiple nodes need to work in concert, and the network delays between them also enforce an additional cost. These make it harder to make things go faster simply by spamming more units. These are just as secure as the SHA256 algorithm that BTC uses. But fewer units = less power.

BTC Maxis think the enormous amount of power consumed on the network is a selling point, when in reality it is the only feasable excuse for governments to ban it. Governments can never ban the protocol itself -- it's just math, after all -- but can severely restrict where mining can happen if they think it is burning too much power and endangering other parts of the economy.

[–] [email protected] -5 points 5 months ago

Nobody in this community cares about opening a tab on Lightning and needing to continually police it to make sure you don’t lose your coins

You don't have to do this. This is all automated and abstracted away in UX. I've never manually looked at any channels. There is also zero incentive for an attacker to do an attack as your describing because prevention of such attacks is automated and they have to put coins at risk to do it. In lightning's early days what you're talking about was real and true, but it's been years since that's been the case. I dismissed lightning out of hand as well and came back round to it recently and it's really matured a lot.

Other algorithms are designed to use a large amount of memory also, and memory is harder to scale than computing power.

Ultimately you are replacing one type of scale with another. At the end of the day, it's hardware, and people will buy the appropriate hardware to mine, and if you can achieve economies of scale you can mine more efficiently all other variables the same. What route they use to turn that energy into BTC is almost immaterial.

Other algorithms enforce that multiple nodes need to work in concert, and the network delays between them also enforce an additional cost.

Until a device is created that can do it without concert, then you've ended up at square one except worse because one actor can now gain a significant advantage much more than say the party who gets the new ASICs first. You can "prove work", you can't "prove network latency". Basing anything on network delays will cause clustering and centralization and is a less equitable distribution of mining power than energy can provide.

but can severely restrict where mining can happen if they think it is burning too much power and endangering other parts of the economy.

I'm not sure they want to though. Bitcoin miners are 'buyers of last resort', they're not buying power at peak demand times. They're not competing with existing electricity buyers. They're helping grids over-provision renewables and ensuring they'll have a buyer for any extra power produced during non-peak time and driving down the electric rates for their normal ratepayers since your rate is essentially cost to produce electricity/units of electricity produced and as you scale and bring in more renewables cost per unit goes down. Regulators have taken both pro and anti-mining stances, we'll see how it shakes out, but regardless, as you say, it's math and mining will still happen regardless. My money is on the grids which have 100% of produced electricity bought 100% of the time at the most efficient scale possible.

[–] PugJesus 6 points 5 months ago (1 children)

Considering the extreme fluctuation of Bitcoin, it feels like that's a payment that has to be processed and cashed out within an hour of the filing for the Federal government to not get screwed.

[+] [email protected] -12 points 5 months ago* (last edited 5 months ago) (1 children)

They can easily do that. Bitcoin payments process in under a second for < 1% fee (Lightning) or 10 minutes for roughly $1-$2 in fees (main chain), selling on an exchange is instant. The federal government has also held onto some BTC long-term from criminal cases, that ended up being a pretty good investment decision for them. They hold onto lots of currencies.

In any other Bitcoin payment situation, you are credited the value of the BTC at the time you send it. What the receiver of that BTC does with it later or how its value changes is not your problem. Same with any other currency. The IRS isn't coming after you for an additional 20% from your last return just because a US dollar buys 20% less bread than it did when you made your payment last tax year.

[–] Bassman1805 8 points 5 months ago (1 children)

That's beside the point, because you don't pay taxes in denominations of "loaves of bread", you pay them in US dollars. If you pay with an asset that is wont to change its value in US dollars on a whim, that's a gamble for the government. There's a reason people don't regularly pay taxes with stock options.

[+] [email protected] -12 points 5 months ago* (last edited 5 months ago) (1 children)

My point is that the US dollar fluctuates in value as well. It loses purchasing power, by design, because it's an inflationary currency. Which means it loses value over time. BTC might go up, it might go down, but it's not literally designed to lose value. 2-3% per year is Fed policy goal in "good years", our recent inflation has been bad because it's beyond that.

The US govt can swap BTC for USD or other currencies instantly if they want to.

[–] Bassman1805 8 points 5 months ago (1 children)

The US dollar is never worth less nor more than than 1 US Dollar. If you owe a debt in USD, the size of that debt does not change based on the purchasing power of the dollar.

[–] ShittyBeatlesFCPres 5 points 5 months ago* (last edited 5 months ago)

Why? I know why far-right Republican bozos want it — all the bribes (or “donations”) from the crypto and oil industries. But how would anyone else benefit from this? We don’t pay our taxes in random things that have a perceived value, whether it’s Mexican Pesos, airline miles, gold doubloons, futures contracts, corn, land, etc. for a reason. Individuals sell those assets (and often pay capital gains taxes on the sale) to get dollars, the national currency that has a known value and doesn’t need to be sold.

Then, the U.S. government would have to sell them all anyway and the price fluctuations make that very risky. Why put that risk on the government? And only for Bitcoin, which is by design^1^ super volatile. It doesn’t even have a central bank. The U.S. government collecting and selling loads of BTC every April would probably make it even more volatile and speculative.

^1^ Probably unintentionally since Bitcoin fanboys all seem to have found their Economics knowledge in a Cracker Jack box instead of a textbook.

[–] dhork 5 points 5 months ago

Hey crypto bros, it's a trap! Once they get your tax payment in Bitcoin, they will consider that a capital gain and expect to see the transaction on next year's tax return.

[–] eran_morad 4 points 5 months ago

Nah fuck off.

[–] [email protected] 1 points 5 months ago (1 children)

No Venmo?

[–] floppybiscuits 0 points 5 months ago

This would be just like all the other services that allowed payments with Bitcoin and later sunset them because no one used it. See Wikipedia...