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Comment by xorcist | Hacker News Reader

"Cashing out" doesn't necessarily mean dollars.

Try to buy a Tesla or a house anonymously. All large transactions are subject to KYC.

It sounds like your definition of "cashing out" means "do anything that has historically involved counterparty risk". Unless you really think a warehouse manager would insist on carding you for several pallets of dishwashing detergent...

That sounds like exactly the kind of thing that raises some eyes.

You usually need some form of distributor's license to not have to pay sales tax on the transaction. That license requires identification.

Of course you could refuse that and just pay the sales tax, but who does that? I would be a little surprised if they even had the means to do it. Warehouses normally sell to distributors, who have distributor's licenses so they don't pay sales tax. Why would they have a system to collect sales tax and send it to the government? That transaction is going to stand out, a lot. Trying to pay for it in Bitcoin is only going to make it worse.

Unless, of course, you're trying to pay the warehouse manager to help you steal the dishwashing detergent. There's no papertrail, but remarkably high counterparty risk. Plus at the end you're stuck with a bunch of hot dishwashing detergent that you're going to have to offload.

Having worked for a company that did a lot of contract work for small-item/high-value RMA (which regularly gets sold to 2nd tier outlets), drop shipping, LTL freight, etc: it was totally normal for a rental box truck to roll up to the dock and get loaded after the driver presented an invoice matching what was on record. What tax jurisdiction was being operated under or level of needless personal data collection happened before that was up to whoever ran whichever digital storefront they used, all the shipping dock cared about was the invoice number. I don't know what incentive anyone would have had to give the purchaser the third degree - assuming the risk of a clawback was mitigated... so they'd doubly not care about a BTC based sale.

Way back in the day I took some profit by purchasing something like $50k in server hardware that needed to be bought one way or the other. Nothing but a "ship to" address and a BTC private key. Was I trying to secretly launder money? Nope, just a boring business transaction that didn't involve VISA. Was it to cheat the tax man? Nope, the IRS had very pointed refused to issue tax guidance up to that point (and continued to do so for years) - so I just paid the long term capital gains when doing the other paperwork one does in a self funded a business venture.

I always wonder about the people who assume cryptocurrency is something that needs a level of law enforcement scrutiny beyond any other method of payment, how much misinformation was required to yield that result, and if they'll be able to adapt to the inevitable.

Don't all these transactions show up in the books, or it's just not a problem?

It isn't a problem. I guess it potentially could be a problem if I had been buying a fleet of cigarette boats that ended up being used for drug running. Or if I could be personally embarrassed in the event that the transaction linked a wallet that I was publicly known to control to a German dungeon porn emporium's hot wallet. So if you wanna do those things - be mindful of the public ledger thing. It is funny whenever an "influencer" gets paid to promote a scamcoin and predictably flaunts his wad - accidentally sharing far more than he knew was possible.

I tried to pay BTC for a very small electronics purchase recently and the payment processor BitPay literally demanded passport information

> ...pay BTC...payment processor

It sounds to me like you tried to purchase from a seller who expected to be paid in USD, not BTC (which doesn't need a "processor"). Do you really not know why this is a silly complaint - especially given the context?

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