RE: Why I Just Paid Taxes on My 2017 Steemit Earnings
The crypto-anarchists do not realize that government defining cryptocurrency as taxable item essentially legitimizes value of these virtual baubles. It is like that story about the farmer and the jade, for which the farmer had both his legs lopped off by the emperor who thought jade was just some rock. Only when the finance minister convinced the emperor of the value of jade (and thus tax income potential) did jade become a precious item. The best scenario for cryptocurrency would be, like Arizona, when central authorities allow for payment of taxes with cryptocurrency. Crypto-baubles are medium of exchange without any end use value. Value is only derived at the point of conversion into something of real value, i.e. fiat currency to pay taxes.
Exactly- and there also are very, very few places that accept payment in cryptocurrencies right now.
Governments are just collections of people. Yes, the culture right now hold these governments in very high regard for "knowing what's right" and put a lot of value in their opinions, as they tend to have a lot of force at their disposal, so "get with the winning team", right? But with better local and global communication via the internet, people understand that the functions that these organizations provide are quite limited compared to what can be achieved via transparent, trustless, peer to peer input.
I would never expect the people who would stand to lose power and money to be the first to attest that cryptocurrencies already demonstrate more value than fiat, but between underlying principles of crypto and the overwhelming imbalance of the victims to crony capitalist/government greed/waste in the mainstream to the people that benefit from maintaining the status quo, I can't see how governments that have devalued currencies are going to be able to keep folks on board.
I think the blockchain technology that is making crypto possible is the beginning of the shift for people essentially functioning as their own "business". A token like STEEM, for example, is making all of our "businesses" on here quite valuable to people like an advertiser. I think as the value of cryptocurrencies improves, with the shaking out of the ponzi schemes and more people (government officials or not) agree to its value, there will be great motivation for large corporations to accept this currency for their economic security, also further strengthening the value. I clearly have value in my own current holdings to gain from that scenario, but from considerations from economical, psychological, sociological studies and history, I have not seen a compelling argument for a contrary future...its just how fast or slow it occurs that is a big question mark.
If you ever feel confident you know what the future holds, be very, very suspicious of yourself.
In this specific circumstance, much of blockchain's underlying theory is based in fundamentally very Western cultural ideas- it's had a very, uh, unusual receptions in other cultures. I'm not convinced, for instance, that it will ever be seen as significantly more than a speculative commodity among, say, many East Asians- they haven't exactly been widely embracing alternative uses of blockchain like Steemit.
I appreciate that sentiment, I am a skeptic so I always state my conclusions so that they may be adjusted in the face of new data, but I don't make my comments lightly. I think it's clear that I hold the libertarian views regarding economics, but it is because I grew up learning American history. My independent study of these econ systems leads me to the conclusion that a free market is best. It is very new territory to no longer need these third parties of government create currency, but what about inflation, waste and other sides of cronyism within the fiat system would you miss?
Perhaps I have too focused an eye on the US right now, but I have a hard time to believe that the global population has not been a victim to some government or banking system abuse that would keep people from agreeing that humans are subject to greed and the best way to combat it, with this technology at our disposal, would be to remove the extra step. The trustlessness of these interactions is valuable to every person involved.
I am not anarchical by any means, but when a government continues to take value from it's people's work and restrict their liberties for the sake of their own personal gains, I refuse to ignore it. People will vote with their feet. If they love the way there government has treated them, then they can keep working to build in that system. I continue to earn fiat with my career, not because I'm a hypocrite, but because I know from hearing calls for communism among my generation, that there is a big learning hurdle ahead.
These discussions we are having now are vitally important to all of us understanding more fully. I really appreciate your time to respond and read, I am certainly growing from it.
Is this the constant libertarian refrain regarding "gubermit is unnecessary" drivel? It always astounds me how the libertarians place such zealous trust in mere merchants and mercantile processes to organize a functioning, stable society. Merchants' only goal is acquiring and hoarding more money, and society governed by such muck in "voluntarism" tend to devolve into chaos commonly seen in failed states (Somalia).
If your benchmark for a well-governed society is STEEM blogosphere, then I truly hope the nation-states and the banking cartel regulate cryptocurrency in order that such degenerative future does not actualize. STEEM blogosphere is ruled by so-called "whales" who engage in infantile flag wars for the most trivial reasons; it is a place where any two-bit bum can set-up a fiefdom; it is a platform that multiplies the vapidity of the modern Western "pop" culture by directly monetizing drivel; and it is a platform for anti-establishment "revolutionaries," who nonetheless giddily accept payment in virtual baubles pegged to the "worthless" fiat. STEEM platform is not some utopian ideal; it is accentuation of our current reality writ onto blockchain.
The libertarian drivel about "intrinsic" value of money is pure nonsense. Money derives value from socio-cultural convention, legitimized and propagated by the power of the state/king. Without central authority defining weights, measures, and coinage, money does not exist. The Lydian king's acceptance of worthless yellow metal, shaped into a disc, stamped with his imprimateur as tax remittance gave gold its value. Somehow, this basic relationship gets ignored by the libertarians. Government taxation creates value of money, since whatever medium (gold, silver, copper, bronze, horse, cattle, fiat, sea shells, pieces of wood) the state accepts as tax remittance is imbued with end-use utility. For all the hype regarding "peer to peer" drivel, why would any sane man accept virtual baubles without any end-use value as payment for services and goods? Cryptocurrencies have no value, if it cannot be converted into fiat for tax remittance.
And it truly does astound me that with government track records, others place zealous trust in regulation determined by a small group of citizens, versus all of the citizens(or at least those buy stuff...so I guess again, all of the citizens haha). Don't get me wrong, I am not arguing that this was a flaw in the past, it was absolutely necessary. But the ever expanding global connectivity no doubt improves local connectivity as well.
I have a hard time developing a response to your second paragraph...I don't intend to comment on how other people see fit to interact with the platform other than with my voting. What is valuable to one person is so subjective, but value is incapable of being "right or wrong", it is only an agreed upon value.
I understand that in the past, we looked to leaders with such high regard, and in some cases, very warranted. People used to believe Kings were chosen by a god, and in democratic states, people could choose. But there has never been a time where a ruler demonstrated the best outcomes for every citizen, in every person's individual opinion. I don't argue that as the goal, but I do argue that it will continue to happen. It costs some people value to their time, some people their freedom, some people their life...
The material that money is made up from never matters. That's why there's no difference in value between the USD backed by gold and the USD backed by nothing at all. The community continued to agree that it had value so it still does.