OT: Crypto Guys

[Jeffreauxdawg]

INDIA TO BAN PERMANENTLY PRIVATE CRYPTOCURRENCY LIKE BITCOIN; WILL INTRODUCE OFFICIAL CRYPTOCURRENCY— First Squawk (@FirstSquawk) January 30, 2021

If China and the EU follow suit since they are both exploring their own Crypto as well, what happens to BTC et al?

https://techcrunch.com/2021/01/30/india-plans-to-introduce-law-to-ban-bitcoin-other-private-cryptocurrencies/

Will the value store play work if it becomes illegal globally? Will it be a better black market investment than cocaine or weapons?

 

[BoDawg.sixpack]

The purpose of crypto is decentralization...any attempt to centralize it and it loses any meaning.

 

[Jeffreauxdawg]

The purpose of crypto is decentralization...any attempt to centralize it and it loses any meaning.

Is it worth 10 years in an Indian prison to buy the decentralized crypto? The biggest problem with crypto is the governments lose control... We may not agree with it, but they are never going to let that happen. None of them. India is only going to be the first.

 

[BoDawg.sixpack]

Agreed. And I'll add nothing is more important to a country's national security than the stability of their currency. Once the currency fails they are ripe for all kinds of outside intervention and the working class loses their ability to innovate in the different economic sectors.

 

[Nicephorus]

I think we will see this with a lot in authoritarian and semi-authoritarian countries. I think it will be hard to legally ban people from owning cryptocurrencies in more liberal western democracies. Regulation will instead come through more stringent KYC/AML requirements.

Ultimately, countries will have to try to strike a balance with regulation. Too harsh, and you risk becoming a financial backwater 2 or 3 decades down the road. Lot of financial services will move to the blockchain IMO over the next couple of decades due to the transparency and increased efficiency compared to traditional financial instruments which are still predicated on the way business was done pre-internet. This twitter thread sums it up pretty well:

https://twitter.com/qwqiao/status/1355521893785337857?s=21

If you read that India article, there will be “exceptions” for certain technologies which is basically referring to above. If the west cracks down too hard and stifles innovation, Singapore and other asian countries with more liberal crypto policies will become the preeminent financial hubs of the future IMO. Crypto and defi are in an interesting spot. Right wingers don’t like it because it’s perceived as a “national security threat”. Left wingers hate it because it allows people to “opt out” of inflationary monetary policies. The more moderate voices in each party tend to recognize the future of it.

 

[Felonious Junk]

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[T-TownDawgg]

I believe much of this stems from a few factors.

1)India instituted a new citizenship law last year based primarily on religion. It was heavily slanted against Muslims, who could be classified as criminals with little or no rights to property ownership and financial system accces.
2)If a Muslim person is stripped of citizenship rights his accounts could be frozen and seized.
3)For several years, Islamic banks have been allowed to operate with limitations under whatever Sharia laws they deem sacred.
4)With the current Nazi-Germany-esque storm clouds looming there, I wouldn’t be at all surprised Muslims were transferring their currency to crypto en masse for obvious reasons, and the Indian government decided to head off that escape route.

Whether or not you have a shred of sympathy for an Islamic community in a predominantly Hindu nation is a whole other conversation. Pay attention anyway.

The fact is that governments around the world are tightening their grip on the two primary motivating factors to the masses (religion and wealth) should be noted.
It’s been happening and is happening here. See also France, Germany, Philippines, Russia, China, and Venezuela, among others.

Be ready for some momentous market and religious crackdowns here once this administration sees that the die has been cast and is shown to be effective.

 

[Jeffreauxdawg]

I have always loved the idea of crypto. I despise the idea of the government controlling the entire populace of a country through it's currency. With that said, overthrowing the currency of a nation is essentially overthrowing the government itself. Major nation's like the US would experience massive inflation if it's currencies lose demand. We would be taxed to high heaven to pay debt. The consequences could lead to hot wars or wild civil unrest.

The only way decentralized currency works in a grand scale is with decentralized government. I'm all for it, but I doubt it happens in the next century.

 

[Go Budaw]

What are the tax implications of crypto? Is it subject to capital gains? Seems that would be pretty hard to enforce.

 

[Apoplectic_Objurgator]

What are the tax implications of crypto? Is it subject to capital gains? Seems that would be pretty hard to enforce.

At a high level - it’s similar to stocks. I think there’s going to be a question on your return this year asking if you traded in crypto’s. The difficulty is keeping track of transactions and change of value relative to USD. Exchanging should be pretty straightforward.

 

[Nicephorus]

Terrible if you follow all the rules by the letter. Current laws were not meant for crypto. Anytime you switch from one token to another, it’s considered a taxable event. For example, if you deposit a token on lending platform aave.com to earn interest, you receive an IOU token that can be redeemed for the original deposit plus interest later. This is considered a taxable event, and you will realize a gain/loss on the token you deposited based on price at the time you deposit.

Regardless, in my opinion, outside of btc or maybe eth, not worth trying to hold crypto for a long term gain. Stuff is too volatile and will likely result in you making less in the long run due to being too conservative or missing out on realizing a big gain or worse turning it into a loss.