Odell does not have to pay those taxes now, while Bitcoin is at the current low value. And he does not need to convert those Bitcoin into USD now (I assume he has some other pocket money available to pay his current bills). The logic in that quote would only be correct if he is forced to convert all those Bitcoins to USD now and use it to pay those taxes.
Baron's Crypto Trading Journal
- Thread starter Baron
- Start date
Baron
ET Founder
That logic applies to any currency, not just Bitcoin. How someone accumulates money is by offering a compelling product or service that saves people time and brings value into their lives. If a few people accumulate the most money over time, then they obviously deserved it. For example, I believe the richest man in my state of Florida is Thomas Peterffy, the founder of Interactive Brokers. That wealth didn't fall into his pocket out of nowhere, he earned it. IB has brought a tremendous amount of value to the financial marketplace through a variety of services, and the marketplace has decided that Mr. Peterffy deserves the wealth he has accumulated. Never forget...
Life doesn't give you what you want. It gives you what you deserve.
I think he will pay taxes on his salary regarless of how he took it. I have no clue how it is valued, but he will be paying taxes on his salary. Just because you don't convert it to dollars doesn't get you out from under the taxman.
Yes I agree totally. My contention was just that a flaw with a finite currency is that the bulk of it ends up with just a few folks and there is no new currency to be had by the many. This is the flaw I see long-term with Bitcoin although it would never be an issue in our lifetimes.
Dude, he has to pay taxes on his income. Just like businesses have to pay taxes on their sales. It means nothing to government that you signed a deal for $750,000 in Bitcoin but now that bit coin is only worth $350,000. They want taxes based on the salary you received.
Thus the problem with using Bitcoin for purchases. The problem isn’t with the buyer in this scenario, it’s with the seller. Let’s say half of your take is in Bitcoin states are not going to tax you at the rate of the Bitcoin at the end of the year, they are going to tax you on the sale price. Same thing will happen to your profits. It’s a gamble to use Bitcoin for day to day business.
I can see lack of supply adding to the demand and increasing the value. But what makes bitcoin valuable?
Anyone can develop a crypto currency. As a medium of exchange it only has to be accepted by both parties. There is no secret to blockchain, it's open source. So if I can't afford bitcoin to use as a currency, I have several other choices. As a currency the stable coin makes more sense at this time. (Maybe not if/when the US dollar isn't the currency of choice)
If we don't think of bitcoin as an alternate currency but as a store of value, how do we determine the value. It's whatever someone else is willing to pay for it.
I would say that it's the fact that others will accept it as payment or exchange.
Not to besmirch Bitcoin or crypto et al but that is why Bitcoin is used in purchases of illegal activities. These activities are extra governmental, meaning not subject to taxation so a crypto currency works. Crypto simply does not work within the framework of the global economy.
Now, I know the point of crypto is to get away from government/nation backed currency. But crypto on whole is actually a pretty good idea if it can be stabilized because it eliminates the need for banking when making digital transactions. This would be awesome in the real world. So the irony is that for crypto to be a means of exchange it needs reserves, ideally US dollars.
The global implications of a stable digital currency would be enormous. It would bring economic viability to many places with unstable governments and unstable currencies.
That's largely an outdated narrative. In recent news, Putin's shift on BTC does validate the possibility of using BTC to get around sanctions. However, privacy preserving chains like Monero, Zcash, Dash and others would be a better fit of an illegal intention usecase.
Increasing transparency is generally considered good but with releases like the Panama Papers, privacy is conflating with illegal activities whether deserving or not.