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View Diary: Dem senators want bitcoin crackdown (49 comments)

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    •  background on alternative currencies & the IRS: (9+ / 0-)

      Alternative currencies have long history in the US, and flourished during the last great depression.  

      One of the most successful examples today is "Ithaca Hours," a currency that is denominated in labor and is widely used in Ithaca NY and surrounding communities.

      News flash: officials from CHINA visited Ithaca and discussed using Ithaca Hours as a currency in China!  

      Interestingly, the IRS position on these things is really progressive:  you can use whatever currency you like, as long as there's a non-fraudulent and publicly posted exchange rate between it and the US dollar, and you report your income and pay your taxes in dollars.  That's 100% reasonable, and it should also be applied to Bitcoins.  

      If you are using Bitcoins, it's important to do the exchange rate calculations, report your income, and pay your taxes on the Bitcoin income.  This will help to legitimize the system.  

      Local currencies provide a very important economic benefit.   They partially de-couple the local economy from the national and global economies, thereby providing economic resilience in times when the larger economy is in deep doodoo.  This is one of the most important progressive reasons for promoting local currency systems.  

      •  To an extent (2+ / 0-)
        Recommended by:
        Jaime Frontero, semiot

        I'm a big fan of bitcoin for exactly the stated reasons: it's not under any government control, can handle inflation and deflation equally well (its bit length makes it divisible into very small numbers), and is very efficient.

        That being said, it's just a currency. Like any currency, you have to do something useful in exchange for it, so it isn't like unemployed people are any better off with bitcoin than dollars. It's  better than Ithaca hours because no one will take a labor-denominated currency seriously except on a local level: as soon as you require an input of some global commodity or other, the other party isn't going to take labor in exchange.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Thu Jun 09, 2011 at 09:12:39 PM PDT

        [ Parent ]

      •  Did somebody say... (2+ / 0-)
        Recommended by:
        nymosyn, semiot

        ..."exchange rates"?

        It ain't called paranoia - when they're really out to get you. 6 points.

        by Jaime Frontero on Thu Jun 09, 2011 at 09:19:02 PM PDT

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    •  Uh-oh, big trouble. (2+ / 0-)
      Recommended by:
      johnny wurster, semiot

      Spoke with a friend who knows much about this stuff and he said Bitcoin is heading for (or already in) a speculative bubble.  

      Price today was fluctuating between $10 - $30 each.  Not long ago it was 20-cents, and then $8 each.  Definite signs that someone is going to make out like bandits on this, but many are going to get left holding crap-a-roo.  

      I'd suggest not getting involved unless with money you can afford to throw down the toilet.

      •  Super high beta (1+ / 0-)
        Recommended by:

        Few users means a volatile market.  

      •  Actually, the price today... (0+ / 0-)

        ...has fluctuated between $26 - $29.

        And no matter how often we repeat the oft-relearned truth: "past performance is not a mathematical indicator of future performance", we are human, and look for those patterns.

        There are too many things about Bitcoin which are unique in the world of currency - the intentional deflationary 'minting' of it, the lack of fees or (mostly) the need for them, the utter lack of a centralized controlling body, the unstoppable transmission of them across borders.

        I would be hesitant about applying the commonly accepted 'laws' of currency trading to Bitcoin.  I would also point out that I am not recommending it - it's quite volatile, and obviously not for everyone.

        But it's a helluva ride...

        It ain't called paranoia - when they're really out to get you. 6 points.

        by Jaime Frontero on Fri Jun 10, 2011 at 06:30:14 AM PDT

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    •  Giant fail. (0+ / 0-)

      Schumer didn't call for a crackdown on bitcoin.

      •  Schumer isn't informed enough... (0+ / 0-) have made a clear 'call'.

        He is very unclear about the difference between Silk Road and Bitcoin - conflating them incorrectly.  They are two entirely different animals.

        He gets an awful lot of his campaign contributions from banks and other financial institutions though.  Bitcoin is not exactly the best news that banks have ever gotten...

        It ain't called paranoia - when they're really out to get you. 6 points.

        by Jaime Frontero on Fri Jun 10, 2011 at 06:35:09 AM PDT

        [ Parent ]

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