Government taxes and the Blockchain revolutionsteemCreated with Sketch.

in cryptocurrency •  7 years ago 

The blockchain revolution has started, but we might be a bit too idealistic on how everything will work out at the “end”. I don’t think it is a fight to the death between centralized and decentralized systems. It is about shifting the balance and each sphere of life will have a different shifting. The most important aspect of this revolution is that we now have a choice, and in the future this choice will be very diverse.

It is very probable that we will have almost a completely decentralized world, but I think it is too soon to call on a time table. I think the centralized systems have their own evolving to do and they might cook up something that will be very attractive to the “relaxed” portion of the population. Governments and large corporations will need to give up on the old style of control and look at what is left that is of value to people. Basically, they need to look at their fundamental usefulness to people and channel it through the blockchain technology.
This will trigger a competition with the private sector, which I think is a good thing.

What about taxes? If there are any services left for the government to provide for the people, then how are taxes going to be determined? Public keys are hard to link to legal names. Plus there are so many ways to cover your trucks. It is a messy game. So, I think eventually the Governments will create a way of “encouraging” the cryptocurrencies to be taxable. This sounds like a taboo, but lets not forget that in a way the Government still got us by the balls on many day to day activities. You cannot move all your finances on the blockchain today. This will probably hold for the next 10 years. We are still attached to the physical world, and on that dimension, the centralized systems still rule. This may change one day, but until then, don’t count out the old system. I suspect that initially blockchains that are tax-friendly, will receive deeper adoption from the general population. Again, this depends on which country we are talking about. This phenomena will vary significantly from country to country.
The future of centralized and decentralized will be nothing like what we imagine it today. This however, does not mean we should stop imagining and thinking of the future.

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