Yes i agree I think that the gov sorta ignored it all until vast sums of money ran through the system, that is money that is not in their own crypto system called the stock market 8 }
Now that they are taking a look at it and know in the end it has to be converted to fiat that is where the taxes will be. These taxes will be placed on all products purchased and bled into the price of the product with no way around it unless the merchant wants to pay your taxes on it. I see crypto as a mini stock market with no commodity backing sort of a poker game between friends.
Crypto is not a commodity and is backed by fiat
Fiat is not a commodity
Fiat however is backed by commodities.
The GOVs are taxing on end game now.
Example - you buy a 500k home with crypto converted to fiat well that transaction has to go through a bank the GOV has that info that is not a problem until on your taxes you report a 20k income... Then it becomes a big red light. IRS says errr where ya get the 500k last yr to buy a house and where is the tax statement on your income ???? Very hard to keep the eyeballs of the GOV, State, and locals tax laws off the purchase.
The problem I see will be on the inside of the blockchain where for the yr all that use it will have to claim capital gains and pay taxes on per yr. That is what will disrupt the setup. The sharp ups and downs of the blockchain could put you in a situation where you make millions by the end of December pay taxes on it and by January its crashed to nothing. This sharp movement is a result of no commodity backing. If it had a commodity backing it would level out the spikes a lot.
Once converted to fiat it becomes stable based on the dollar or euro ect backed by commodities to make it somewhat stable.
Another quick thought: you generally report capital gains or losses against what you cashed out, not against what you hold at the end of tax season.
So if you were a millionaire in December and a pauper in January, nobody would care because it could still go back up. HODL is not capital risk, it is liquidity risk. Now, if you were to sell despite the plummet because you needed to salvage some spendable money you could recoup some of the loss through a capital loss declaration and get some tax reprieve.
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They will get their taxes one way or another. When they create their own gov blockchain to replace the fiat dollar I do not think they will allow other blockchains to run with it . It would be like someone today printing their own paper dollar and being able to exchange it for a us dollar today. I think they will exchange with other countries gov blockchains only.
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I said this on a different comment as well but how are Steem and SBD not fiat currencies? That is the only MANDATED and ACCEPTED form of payment within Steemit, which is a decentralized, self-governed environment. Also, as exchanging parties, we determine their value by paying what we think they're worth. Sounds a whole lot like the definition of fiat currency to me.
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In an earlier comment @nightwind used the term to describe crypto, and allowed paper currency to hold the fiat designation. Regardless, neither are commodity—we can agree to that. So I believe we are all of the same interpretation.
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Yes crypto has blurred some of the terms for sure.
Fiat has no value but for whats backing it. The US dollar is backed by the economy of the US and all it produces in terms of GDP,
Crypto is backed right now by the fiat for it produces nothing but can be traded for something that does, a countries fiat currency that is backed by that countries GDP or whatever they peg the currency at.. Pull the Dollar and the Euro from it as a backing and boom it has no backing but for a batering coin. The GOVs know this.
The blurred part is that companies like VISA look at cypto or anything else that is not a recognized country fiat as a commodity. I think they do not have a better word for it nor care they just do not trade in commodities so they call it that.
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A fiat currency is like the US dollar or Euro, a backed governmental currency based on a commodity backing like oil , gas, natural reserves, industrial merchandise ect, take the US fiat currency..In the old days it was pegged to gold and silver you could actually take a 20 dollar fiat bill to a bank and get the equivalent in gold given to you. That regulated the money supply to the amount of gold the country had which was not as fast in creating wealth as they wanted so they unpegged it from gold and allowed banks to loan however much they wanted to. today i think they can loan out 9 dollars to ever 1 dollar they have. When they unpegged from gold they used commodities or any hard asset be it oil or corn.
Steem and SBD is not until converted to a above fiat currency.
The form of currency Steemit uses or process is that crypto has to be purchased or given to someone bought with a fiat currency. Then the crypto can be used within the system. In order to have value it in turn has to be exchanged again for fiat currency
All crypto is a decentralized, self-governed environment but has no value unless converted to a gov commodity backed Gov currency like USD or Euro.
You can call any crypto a fiat currency the point is its not backed by a commodity so has no value until exchanged through a fiat backed by a Gov.
Example would you take 5000 usd in crypto for your car knowing you could not exchange that crypto for a a fiat currency backed by a Gov USD or Euro ect. If you do then its called a bartering system. And you would only be able to use the crypto you have to purchase something someone else has to sell that does not want hard currency as in usd or euro and will take only crypto.
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This comment is full of so many absolutely true statements, I love it.
If you live in the US you are expected to declare income to the IRS regardless where you earned it. If you reside in WI and earned money at a job performed in FL, you have to declare it on the WI state form (even though FL is state-tax free). If you earn money through a job, capital gains, a deceased relative, excessive gambling earnings, and even working a side-job for cash you are supposed to declare it and pay taxes to enjoy the programs offered by your country.
Obviously there are many situations where there is a "you don't report, I don't report" agreement...nobody wants to pay taxes if it can be kept. But theoretically you can report paying a housekeeper cash, and they can get in trouble if they don't report it, too.
It's just called tax evasion. Being a successful daytrader or currency exchanger doesn't give a hall pass. Eventually the government will audit purchase patterns and question where your money came from. If it came from unreported capital gains from the crypto market you'll have to pay back-tax, go through repo, and possibly serve jail-time.
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