Comment by plock | Hacker News Reader

Comment by plock | Hacker News Reader

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>First of all, I can pay taxes in Bitcoin. There's a company that handles it for me.

That company doesn't pay the US government in bitcoin. They just buy dollars on your behalf. Every dollar owed in taxes must be paid in USD.

>Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition.

It doesn't 'disappear'. There are still millions upon millions of people who need USD to pay their taxes. That's where the backing comes from. It doesn't matter if not everyone has to pay taxes in USD. Quite a lot do, and they need to buy dollars from other people in order to do so.

>There are multibillion global transportation industries out there, and they don't care what they transport (as long as it's legal).

I'm sure the people that hire them to transport goods value what's being transported.

>People pay them because they provide ease of transportation at a reasonable price per pound.

What point are you trying to make?

>I'd say ease of transportation is much more valuable to the majority of the world than some "freedom from prosecution" by some government that can't touch them.

Freedom from prosecution is pretty important to the people in the US that owe taxes to the US government. But you're comparing apples to oranges.

Ease of transportation is a feature of bitcoin. But ease of transportation does not itself give anything value. You are easily transporting your words to my computer. That doesn't mean they're valuable. Ease of transportation makes bitcoin a more suitable currency than something that is equal in all other ways but is harder to transport. But something having some features that make it suitable as a currency doesn't mean it is actually a good currency.

On the other hand, freedom from prosecution is something you can buy with USD. It's not a feature of the piece of cloth called the USD that you can pay taxes with it. It just happens to be that way. And I would say that a guarantee that your money will be worth something [because people will always have to buy it in order to escape prosecution from non-payment of taxes] is more important than ease of transportation.

You're still confusing the burden to pay taxes under the penalty of law in one particular country with value.

You have a fundamental misunderstanding of what "value" means.

> That company doesn't pay the US government in bitcoin.

But I don't care. I paid in Bitcoin.

> That's where the backing comes from

I doubt dollar "intrinsic value" comes from the fact that you have to pay taxes in it. It can spiral into a 10000%/year inflation and lose most of its value, and you will still be able to pay taxes with it.

In fact, you've been required to pay US taxes in dollars for the last 100 years. It didn't stop the dollar from losing 97% of its value.

Again, you're confusing value with some criminal law.

> I'm sure the people that hire them to transport goods value what's being transported.

What? You can't transport something that has no value? Like an empty box?

> Freedom from prosecution is pretty important to the people in the US that owe taxes to the US government

Ah, red herring. I was talking about "majority of the world", and you switched back to the Americans, as if that somehow proves that most of the world doesn't give a crap about US criminal codes, which, according to you, somehow back the value of the dollar.

> Ease of transportation is a feature of bitcoin

Which adds to its value, like features of... everything.

Trying to play with words will get you nowhere.

> But ease of transportation does not itself give anything value

We already went over this. Multibillion transportation industry.

>You're still confusing the burden to pay taxes under the penalty of law in one particular country with value.

Let's say I'm a schoolyard bully. An honest one. I hand out slips of paper that say "Keep your lunch". If I tell you I want your lunch, and you give me a "Keep your lunch" ticket, you get to keep your lunch that day. If you don't have one, or don't want to give me your "Keep your lunch" ticket, I take your lunch. Clearly if you believe I'm capable of taking your lunch, that slip is going to have value for you. Agreed?

Now let's say you're three grades above me, so you aren't worried about me taking your lunch. But there are still plenty of people who are worried about me taking their lunch because they're smaller than me. That ticket still has value for them. You know you can trade it to them, and they'll take it. Therefore it has value for you, even though you have no direct use for it. The fact that I am willing to take that ticket in exchange for not taking someone's lunch backs the value of that ticket, even if you yourself don't need the ticket to stop me from taking your lunch. You can trade it to others who will use it for that purpose. Now do you understand?

>But I don't care. I paid in Bitcoin.

I know you don't care. But they had to buy dollars. Someone has to buy dollars in order to pay your taxes. That's the whole point. Someone has to buy dollars in order to pay your taxes. Someone has to buy dollars in order to pay your taxes. Someone has to buy dollars in order to pay your taxes.

>I doubt dollar "intrinsic value" comes from the fact that you have to pay taxes in it.

The fact that you have to pay taxes in dollars is one of the biggest reasons why people trade in dollars rather than some other random currency.

>It can spiral into a 10000%/year inflation and lose most of its value, and you will still be able to pay taxes with it.

I never said it was the perfect currency. I never said it got 100% of its price from the fact that you can pay taxes in it. You are completely missing the point, and I'm guessing it's because you just don't understand what's going on in this debate.

>In fact, you've been required to pay US taxes in dollars for the last 100 years. It didn't stop the dollar from losing 97% of its value.

What did I say that would lead you to believe this contradicts what I think?

>Again, you're confusing value with some criminal law.

No, you just have no idea what they have to do with each other.

>What? You can't transport something that has no value? Like an empty box?

Do people normally transport things that have no value to them or anyone else?

>Ah, red herring. I was talking about "majority of the world", and you switched back to the Americans, as if that somehow proves that most of the world doesn't give a crap about US criminal codes, which, according to you, somehow back the value of the dollar.

See the first two paragraphs of this reply.

>Which adds to its value, like features of... everything.

It is more akin to a multiplier. If it has value, it makes the value greater. If it has no value, then no one cares how easily it can be transported, because no one wants it to be transported to them.

>We already went over this. Multibillion transportation industry.

The transportation industry is moving things that people value for reasons other than the fact that they can be transported easily. If people didn't already value the things they have shipped, they wouldn't pay to have them shipped. If I had some worthless box of cat excrement, it wouldn't suddenly be worth something because I could cheaply ship it to a foreign country. If I had a worthless unit of cryptocurrency, it wouldn't suddenly be worth something because I could cheaply send it to someone in a foreign country. If no one wants it, they don't care how cheaply I can get it to them. They don't want it. Do you get it?

> You're still confusing the burden to pay taxes under the penalty of law in one particular country with value. You have a fundamental misunderstanding of what "value" means.

It is true that it's stretching it to say taxation gives an 'intrinsic' value to us dollar. Really I would say that the phrase 'intrinsic value' should be reserved for things that are useful for some survival purpose directly, like food, water, shelter, machetes, etc.

However, taxation does mean that there is a continued guaranteed demand for us dollars, placing a floor on the price. There is also the fact that having a store of something considered to be legal tender gives you some extra rights to protection from the criminal justice system in that country.

So 'intrinsic' is perhaps too strong a claim, but it's guaranteed to have at least some value as long as the US government endures, which is still a pretty good guarantee.

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