There's only two possibilities here. Either the IRS is intent on destroying bitcoin or they are so completely incompetence and they presume their capacity to introduce policy in the face of their own complete and utter ignorance of the facts. Nor would it seem that even a modicum of research is necessary for the big pant-loads at the IRS to screw up other people's lives. Well done you clowns!
They have ruled bitcoin is not a currency, but only property. The upshot of this ruling is that now every time I use my bitcoin, to purchase a meal, a beer or a new keyboard, I have to pay capital gains tax. So, lucky bitcoin, it's made it to the heady heights of gold: stigmatized as a currency competitor too scary to be allowed to compete on a level playing field with the pathetic U.S. dollar.
That's about the shape of things. If you needed any further evidence that the U.S government, and national governments, in general, hold free markets in contempt, there you go. Really though if you're surprised by these developments, you haven't been paying attention.
What does this mean for bitcoin? Things start getting interesting. Many have been talking about lobbying for a change of policy. That seems strangely myopic in its blindness over the necessity of national governments to not allow competitors with their currency.
IF you've been paying any attention, you should already know the skinny on this. The only way for bitcoin to succeed is as a competitor to fiat currency. Furthermore, the only way to be such a competitor is going to be outside the blessings of nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you mean people freely engaging in voluntary exchange which does not trespass on the life or liberty of anyone else, but which the wise overlords of the state determine is unacceptable? Well, maybe.
Of course what such accusations about bitcoin almost always ignore is that for real criminals, who assault, torture, murder, rape and steal from others, the U.S. dollar is the currency of choice. So the real criminals' savings in U.S. dollars just went up in value compared to bitcoin. Well done IRS. You're so smart.
Have no illusions. This ridiculous ruling is about criminalizing people who want to choose their own currency. After all, what can be scarier than that for the fraudsters and bureaucrats who run our government-banking complex?
They have ruled bitcoin is not a currency, but only property. The upshot of this ruling is that now every time I use my bitcoin, to purchase a meal, a beer or a new keyboard, I have to pay capital gains tax. So, lucky bitcoin, it's made it to the heady heights of gold: stigmatized as a currency competitor too scary to be allowed to compete on a level playing field with the pathetic U.S. dollar.
That's about the shape of things. If you needed any further evidence that the U.S government, and national governments, in general, hold free markets in contempt, there you go. Really though if you're surprised by these developments, you haven't been paying attention.
What does this mean for bitcoin? Things start getting interesting. Many have been talking about lobbying for a change of policy. That seems strangely myopic in its blindness over the necessity of national governments to not allow competitors with their currency.
IF you've been paying any attention, you should already know the skinny on this. The only way for bitcoin to succeed is as a competitor to fiat currency. Furthermore, the only way to be such a competitor is going to be outside the blessings of nation states.
Does that mean, some will ask, that it is condemned to fulfil the silly accusations of the mass media that it is the currency of criminals? Depends what you mean by criminals.
If by "criminals" you mean people freely engaging in voluntary exchange which does not trespass on the life or liberty of anyone else, but which the wise overlords of the state determine is unacceptable? Well, maybe.
Of course what such accusations about bitcoin almost always ignore is that for real criminals, who assault, torture, murder, rape and steal from others, the U.S. dollar is the currency of choice. So the real criminals' savings in U.S. dollars just went up in value compared to bitcoin. Well done IRS. You're so smart.
Have no illusions. This ridiculous ruling is about criminalizing people who want to choose their own currency. After all, what can be scarier than that for the fraudsters and bureaucrats who run our government-banking complex?
About the Author:
Wallace Eddington is a leading commentator on financial and monetary news and a regular contributor to the Bitcoin Profit Calculator blog, where he's gotten the scoop on the Mt. Gox fiasco and other hot bitcoin topics. See also his hard hitting piece on inflation at the Fiat Currency Review.
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