> How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't. Crypto-currency's strong protections on anonymity make it impossible for any state to know who is buying what, who is paying whom, who earns what, and who has what in savings.
BS! The state seems to be surviving just fine with its "inability" to track who is buying what with cash, and it could easily require and enforce documentation of large purchases (such as houses, cars, etc. as it already does btw).
> 2. Police:It would be almost impossible for states to detect certain crimes. One of the major alleged uses of Bitcoin -- though, of course, one can never truly know -- is buying illicit drugs.
Ohhhh noooo!! Cry me a river!!
You mean the batshit insane war on drugs that has destroyed countless lives will become even more ineffective than it already is?!? Please oh please, don't throw me into the briar patch!
Every one of these points applies equally to cash. Might as well write a second article titled: "Cash: An Existential threat to the modern liberal state"
BTW, there's nothing liberal about the war on drugs, the very existence of which is a cruel affront to basic human liberties.
> In a world where many transactions are anonymous, it’s unclear how governments could even compile accurate economic data, without which macroeconomic policy is impossible.
How exactly does having a public history of every transaction ever made somehow make it "impossible" to glean any useful economic data from it?
Add to it knowledge of certain transactions (such as those that go through companies), and you start to get a pretty clear picture of exactly what's going on.
>Can the government stop me from buying something with USD? Not a chance.
What? Of course they can. They can get a warrant and bust into your house and put you in jail if they have basis to believe you have bought something they think you shouldn't have (drugs, child porn, slaves, and tons of other things).
You're getting way off track here. The assertion was that the government is afraid that it can't stop you from spending bitcoins, the implication being that it can with cash. Bitcoin vs. USD doesn't solve your ability to purchase weaponized measles.
Generally I agree with you, but in some cases a government does interfere to limit, inhibit, discourage, or prevent purchasing to varying degrees. They make it very hard. Controlled substances for example.
They can even do it automatedly, such as freezing the ability to withdraw or deposit funds electronically.
Sure, but also notice how they never (in history) tried to control your dollars in such a manner.
If they had set their mind to do just that, I bet they would succeed. For one: forbid all cash, arrest at once anyone using or accepting it (or any self issued barter system) and only allow credit cards and e-money.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, etc., etc.
I'm not sure why that second sentence is there, it doesn't really make much sense. The rest of the point is valid, especially regarding money laundering.
There's a long list of prominent names being investigated or (not) prosecuted (basically scape-goating single employees): GS, Barclays, HSBC, UBS, Deutsche to name the most prominent ones.
And the (so far officially) biggest fish - Wachovia - and how this was (not) prosecuted, nobody really hold accountable, no (real) funds confiscated. A quick reminder on the size of that "business" (300 times bigger than Bitcoin even on the current blown-up total Bitcoin circulation):
"... Wachovia was fined $50m and made to surrender $110m in proven drug profits, but was shown to have inadequately monitored a staggering $376bn through the casa de cambio over four years, of which $10bn was in cash..."
All this is going on for decades. And please also don't forget: Like individuals or (private) companies, governments and politicians are using the same means to make illicit funds appear or disappear.
Your ISP "deliberately" routes child pornography over their networks all the time--that doesn't make them distributors of child pornography.
HSBC provides a banking service. Unlike with ISPs, they are responsible for overseeing how their service is used, to prevent money laundering. Failing to oversee the employees who failed to follow the regulations designed to prevent HSBC's service being used for money laundering is not the same thing as actually money laundering (juicy reporting aside).
HSBC knew what they were doing, that is things were explicitly illegal, and profited from that.
Who actually launders money then? Hint: it's not mobsters since their craft is illegal by itself and therefore no separate law for laundering would be needed.
> HSBC knew what they were doing, that is things were explicitly illegal, and profited from that.
The whole point is that the government couldn't prove that HSBC knew what was going on. The only thing they could prove was that the internal controls were broken (and that they knew they were broken and did nothing to fix it).
And yet, if it was some poor black kid caught on the wrong side of the tracks, the government/justice system could happily put his ass in jail despite them not being able to prove anything or him being innocent. As has happened time and again...
By and large, the government doesn't put poor black kids in jail without proof. A lot of my friends are public defenders working with these sorts of people, and by and large they commit the crimes they're accused of committing. The problem isn't that the government jails these people without proof, it's that you and I as voters, along with "just say no!" moms, etc, have continually voted for "tough on crime" laws that punish these people vastly out of proportion with what they did. But they did do it, and the police have proof because it's easy to prove "poor black kid" crimes. It's easy to prove it with evidence like "you tried to sell drugs to an undercover cop" or "we found the stolen car at your house."
With white collar crime the situation is different. Those laws make otherwise innocuous acts and omissions criminal to achieve broader social purposes. There is nothing intrinsically wrong with saying an incorrect fact to a shareholder, or making a killing on a lucky trade, or getting the better end of a big deal. All those things only become wrong with proof of criminal intent (you knew the fact was wrong and intended to defraud investors--you didn't just make a mistake or restate a bad projection, you had inside information about the trade--you didn't just get lucky, you didn't disclose information you knew to be material to your counter-party).
We require intent for these things, because they are otherwise quite ordinary. They happen all time. People make mistakes all the time. People get lucky on trades all the time. People get the better of a deal all the time. It's only intent that makes them wrong.
But intent is intrinsically hard to prove. If you want to nail a "poor black kid" for grand theft auto, you just have to prove that he has the car and it's someone else's car. The intent requirement (that he didn't do it involuntarily) is easy to prove from circumstances. If you want to nail a banker for insider trading, you not only have to prove that the trade physically happened (which is easy), but you have to prove that the banker knew insider information. And proving what was inside someone's head is hard.
How is that the proper response? If one person gets away with running a red light, do we just turn them all off?
The travesty of HSBC getting away with their crimes should be a reminder of the value of the rule of law and an impetus to fight even harder against those that would think themselves above it.
If this person is a minister of interior affairs then yes, we should just turn them all off.
And HSBC is something like that. It's exactly the bank that "we all the citizens" should trust in order to not be "anti-democratic" as another article put it.
And you know what, we're not going to trust HSBC or any other bank, no more.
> How do governments collect taxes on transactions in Bitcoin? The answer is they don't, and they can't. Crypto-currency's strong protections on anonymity make it impossible for any state to know who is buying what, who is paying whom, who earns what, and who has what in savings.
BS! The state seems to be surviving just fine with its "inability" to track who is buying what with cash, and it could easily require and enforce documentation of large purchases (such as houses, cars, etc. as it already does btw).
> 2. Police:It would be almost impossible for states to detect certain crimes. One of the major alleged uses of Bitcoin -- though, of course, one can never truly know -- is buying illicit drugs.
Ohhhh noooo!! Cry me a river!!
You mean the batshit insane war on drugs that has destroyed countless lives will become even more ineffective than it already is?!? Please oh please, don't throw me into the briar patch!
Every one of these points applies equally to cash. Might as well write a second article titled: "Cash: An Existential threat to the modern liberal state"
BTW, there's nothing liberal about the war on drugs, the very existence of which is a cruel affront to basic human liberties.
> In a world where many transactions are anonymous, it’s unclear how governments could even compile accurate economic data, without which macroeconomic policy is impossible.
How exactly does having a public history of every transaction ever made somehow make it "impossible" to glean any useful economic data from it?
Add to it knowledge of certain transactions (such as those that go through companies), and you start to get a pretty clear picture of exactly what's going on.