On 22 Jan 2014, at 8:15 , Juan Garofalo <[email protected]> wrote: > > I'm asking what practical means would governments use to deal with > bitcoin > if it becomes a real problem for them.
Obvious solutions: * declare BTC to be presumptively evidence of drug dealing or trading CP - possession of weakly-related artefacts being declared as sufficient evidence has, IIRC, been ruled legal in NY in the case of a law which made possession by a woman of multiple condoms evidence of prostitution. * require BTC holdings to be declared to the tax authorities, and make explicit that whatever the local tax on investment holdings applies to BTC (I think the current question is not whether growth in value of BTC is taxable but what kind of investment it should be taxed as). * snarl up BTC exchanges with the same reporting requirements as normal banks and trading houses, even though the much smaller scale will make that extremely difficult to comply with. * rule that BTC miners are engaging in banking by building up the record in the block chain, and make them all responsible for reporting the transactions they process Apart from the first, none of those would be very controversial, or even entirely without merit if you accept the validity of the anti-fraud, anti-money-laundering, and anti-tax-evasion laws which require reporting by financial services companies. The trouble is, what is a tolerable imposition on a company handling millions of dollars is a huge and crippling burden on some guy with a couple of hundred dollars worth of BTC. (This is where a “by way of trade” qualifier[0] would come in useful, but it would also be horribly exploitable when it comes to financial trading.) [0] Typically meaning, taking up a significant portion of one’s time or providing a significant portion of one’s income - the sort of clause which means that someone driving cross-country with some friends and accepting petrol money from them isn’t required to comply with the regulations regarding taxis or minicabs.
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