Japan to regulate Bitcoin trades, impose taxes(asia.nikkei.com) |
Japan to regulate Bitcoin trades, impose taxes(asia.nikkei.com) |
Question is: does this help or hurt MtGox's chance of resurrection? Probably makes it less likely to happen, but somewhat more likely that people will come back if it does.
So they're actually going through with this, when the economy has been depressed for over a decade...?
Love, a liberal Canadian bent on destroying freedom, liberty, capitalism, and all things good.
That's not strictly true. There are other countries who harbor economists possessed of half a brain and theory describing the basic principles of how quasi-rational actors behave in various situations. They just usually don't get listened to. :)
Promising free lunches for everyone is much more popular and gets you elected! :D
So I'm depressed, not Japan. :)
While it is incredibly complex, the fact that their population has been static, trending towards declining, has played a significant part of it.
In many countries, economic growth is just a side effect of population growth -- every number gets bigger, but the actual wealth of each individual person is static or in decline.
You understand that the value of something is not tied to the value of its base unit, right?
If you want to be pedantic, the value of a base unit of Bitcoin is about $.000006.
Loss of value is the counterfactual to value, or to put it another way, you cannot worry about avoiding losses until you have something to lose.
The regulator has therefore sent a signal to the market that Bitcoins have value by the virtue of the very regulation it will use to protect consumers from the loss of Bitcoins.
My point is that not all market signals carry equal weight and a market signal given by a regulator is significant.
Sounds great to me, though the volume will be very small to begin with. This is a great opportunity for sites and services to demonstrate legitimacy in the eyes of the law and their users. Of course there will be some dark exchanges and the like for those who'd rather not have a tax record attached to their wallet, but for lots of people this will be very beneficial.
Really? Maybe a silly question, but if banks aren't allowed to handle bitcoins... who is? Only individuals? Does this really outlaw ALL bitcoin banks?
Yesterday a kind reader posted a translation of a Mt Gox audio statement from Japanese. I'd be really eager to learn more about what's going on here but I keep running into language barriers.
What's to prevent everyone from just moving to Dogecoin or Likecoin or some other substitute to stay off book?
From what I've read, I doubt the Japanese government (mostly Aso, whose game I'm guessing this is) actually understands that there are other cryptocurrencies.
If you make a lot of money buying and selling Bitcoin, you're probably going through exchanges that are licensed and can be subpoenaed for records if your own are in question. If you are accepting Bitcoin as payment on a website, you're probably using something like Coinbase to facilitate it, which means there are 3rd party records of your income.
If you're trading drugs on Silk Road #3, maybe that won't be taxed, but neither are most cash transactions on Craigslist; the government doesn't attempt to put an auditor in every home to catch every transaction that's supposed to be reported.
This could be strategic to prevent illegitimate companies from using BTC because if they are not paying taxes properly, the government has motivation to investigate the company. Honestly, I think this is probably a good thing because it will make it hard for companies dealing in illegal services to operate (although only slightly).
A concern I have is whether taxing transactions will make it more difficult to make quick and easy transactions on the internet (one of things that makes bitcoin so great).
And, I am also a little skeptical because it will be really hard to enforce even for legitimate companies. I think that if the government wants to support cryptocurrency, and tax it at the same time, then they're going to have create their own cryptocurreny protocol. I almost reckon that they'd need a system where the blockchain was hidden from outsiders (basically, transactions would not be anonymous to the government, and users wouldn't be able to publicly see transactions aside from confirmations from the government).
They don't tax Bitcoin, they tax you, and you can evade taxes in any currency or commodity if you're extremely careful and not very risk averse.
Barter is taxable, yard sales are taxable; people don't report them because it's too small to get noticed but if you're making a killing doing it, you're going to get caught.