Comment by deepinsand | Hacker News Reader

Comment by deepinsand | Hacker News Reader

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I assume you'll see other countries' follow China's lead. There's no reason for a government not to.

I fear this might be dire to the Bitcoin economy. Skirting wealth flight laws WAS Bitcoin's killer feature. All of the other Bitcoin use cases I know of are incremental in nature (ie, 2.5% savings on e-commerce transactions).

The open question is if enough of a hype-market was built to keep the other use cases alive. In the case of e-commerce, I assume a rational merchant only accepted Bitcoin because of 1) viral marketing channel 2) speculative hoarding.

The speculation MIGHT work out if the underlying Bitcoin economy was powered by the transaction volume and value of international wealth movement. Running forward it'll be from e-commerce and store of wealth, and I'm skeptical if that'll be enough.

"All of the other Bitcoin use cases I know of are incremental in nature"

I don't think most people are aware of some of the crazy things Bitcoin could enable. Bitcoin is programmable money in a much deeper way than PayPal/Stripe/whatever APIs are "programmable money". It's a global distributed ledger with a scripting language [1] for performing a wide variety of transactions [2][3] with zero or minimal counterparty risk.

However, it's certainly possible we're shooting ourselves in the foot by growing too quickly and unleashing the wrath of banks and governments before any killer applications are built, but if these ideas are compelling enough they'll survive in some form.

1. https://en.bitcoin.it/wiki/Script

2. https://en.bitcoin.it/wiki/Contracts

3. https://www.youtube.com/watch?v=mD4L7xDNCmA

More reading for the curious:

https://en.bitcoin.it/wiki/Smart_Property

https://docs.google.com/document/d/1AnkP_cVZTCMLIzw4DvsW6M8Q...

https://en.wikipedia.org/wiki/Decentralized_Autonomous_Corpo...

https://github.com/DavidJohnstonCEO/DecentralizedApplication...

https://bitcointalk.org/index.php?topic=152334.0;all

Great sources, in the middle of the YouTube video now. Though I've always had this question about "Bitcoin as a protocol":

Isn't the viability of the distributed ledger predicated on the value of Bitcoin? Workers verify transactions because they get paid in something that they value. If the value of Bitcoin drops (say: government regulation), then the incentive to mine/verify goes away?

Assuming that happens and the miners go away, wouldn't the ledger be open to malicious attack?

Yes, that could be a problem. In an efficient market the total mining costs for the network (and thus the cost to achieve 51% of mining power) will tend to be slightly less than the value received from block rewards and fees. It's also the main reason I don't foresee alt-coins proliferating. People will prefer the most secure network.

There are other ways to "fund" the network security: https://en.bitcoin.it/wiki/Funding_network_security https://bitcointalk.org/index.php?topic=157141.msg1665332#ms... I don't know if these schemes would work if the value drops too low though.

What wealth flight laws do countries with freely tradable currencies have? AFAIK I could move a million dollars from my bank account to a bank account in England with no issues.

Perhaps, but I don't think the US has worries about wealth flight. I assume the countries that dominate this "economy" are Argentina, Cyprus, etc.

The US does have an expatriation tax[1] that is of concern for many. There was also a dramatic increase to the tax proposed as a result of Eduardo Saverin's expatriation before the Facebook IPO. Even though he hadn't been living or working in the US for some time prior, the US imposes taxes on all moneys a citizen earns, regardless of where they are living, or where that money was earned.

Beyond that, expatriation from the US is at an all-time high[3], and the rumor is that it's related to the adoption of Obama's progressive taxation schema.

[1] - http://en.wikipedia.org/wiki/Expatriation_tax#United_States

[2] - http://en.wikipedia.org/wiki/Ex-PATRIOT_Act

[3] - http://www.thefiscaltimes.com/Articles/2013/11/18/US-Taxpaye...

Wait, which "progressive taxation schema" is this? The expiration of the top 1% of the Bush tax cuts?

That, the "Buffet Rule", the reduction on charitable donations, the increase on capital gains, and his proposed "Grand Bargain", which lowers rates, but eliminates enough loopholes that it is at least expected to raise the effective tax rate for corporations.

Fair enough, but the "Buffet Rule" hasn't happened, and almost certainly won't during his term.

As I don't net more than $1 million a year, I hadn't followed it very closely, but I admit that I'm a little surprised. For some reason I thought it had most certainly passed and been enacted.

Thanks for the correction.

Well, I expect the IRS would want to make sure you were properly declaring that and paying the relevant taxes on it. No idea how it happens in practice, but given the interests of the parties involved, I'm pretty sure it does.

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