[b-man]

Think about it.

What better way to hide illegal activities.

Trafficking.

Look beneath the surface.

That’s all I’m going to say.

[JLMounce]

Originally Posted by b-man

Think about it.

What better way to hide illegal activities.

Trafficking.

Look beneath the surface.

That’s all I’m going to say.

This argument is used a lot with bitcoin (or any decentralized currency) because the transactions only exist as a consensus on a digital ledger. There's only a record the transaction took place. Nothing about who the participants were or what the transaction was for.

This is unlike the SWIFT system that knows who is involved in the transaction and what goods or services are being transacted for with fairly good granularity.

That doesn't however mean that digital currencies are exclusively used by the scourge of the planet. Plenty of fraud exists within the current banking system. Because of the difficulty in even measuring fraud in an anonymous system like Bitcoin, making such a statement is itself complete speculation.

I would also point out that the same inherent issues occur where cash is transacted.

[MatthewKlein]

Originally Posted by JLMounce

This argument is used a lot with bitcoin (or any decentralized currency) because the transactions only exist as a consensus on a digital ledger. There's only a record the transaction took place. Nothing about who the participants were or what the transaction was for.

This is unlike the SWIFT system that knows who is involved in the transaction and what goods or services are being transacted for with fairly good granularity.

That doesn't however mean that digital currencies are exclusively used by the scourge of the planet. Plenty of fraud exists within the current banking system. Because of the difficulty in even measuring fraud in an anonymous system like Bitcoin, making such a statement is itself complete speculation.

I would also point out that the same inherent issues occur where cash is transacted.

Maybe you're the one to help me understand. So far to me bitcoin seems more fiat than standard dollars.

No one is compelled to take bitcoin as payment for a transaction. I cant buy gas or groceries with bitcoin. To spend a bitcoin legally I need to convert in into dollars.

Outside tax evasion, I don't understand the benefit.

Do you have an idea of what legal transactions are completed daily with bitcoin?

I can understand the desire to give the government a big middle finger, but I don't understand how this can stay viable long term. The government LOVES it's taxes.

thank you

[JLMounce]

Originally Posted by MatthewKlein

Maybe you're the one to help me understand. So far to me bitcoin seems more fiat than standard dollars.

No one is compelled to take bitcoin as payment for a transaction. I cant buy gas or groceries with bitcoin. To spend a bitcoin legally I need to convert in into dollars.

Outside tax evasion, I don't understand the benefit.

Do you have an idea of what legal transactions are completed daily with bitcoin?

I can understand the desire to give the government a big middle finger, but I don't understand how this can stay viable long term. The government LOVES it's taxes.

thank you

Until such time as wide adoption of Bitcoin happens (if it happens at all) it exists in a state of only really being useful as an investment tool as an asset class against dollars.

Peer to peer transactions take place on wallets all the time, but again like cash who knows what’s being transacted.

The problem with trading it is what may or may not happen with the dollar specifically. If the dollar inflates beyond reason, or the government and institutions start restricting what people can and can not do with dollars, then Bitcoins, uses cases broaden.

Guns are always a hot topic, but it’s a good example. There is already ample evidence that payment processors and banks are cutting down on legal purchases of guns and ammunition because of a political agenda. So what do you do if you’re a gun shop owner and now your livelihood is at risk? You can accept payment from a crypto currency like Bitcoin. Because it’s decentralized, there’s nobody that can say no to the transaction.

[MatthewKlein]

Originally Posted by JLMounce

Guns are always a hot topic, but it’s a good example. There is already ample evidence that payment processors and banks are cutting down on legal purchases of guns and ammunition because of a political agenda. So what do you do if you’re a gun shop owner and now your livelihood is at risk? You can accept payment from a crypto currency like Bitcoin. Because it’s decentralized, there’s nobody that can say no to the transaction.

How would a gun shop owner launder bitcoin payments from frowned upon gun sales

Owner of the shop needs dollars to pay the mortgage, utilities, gas, food. If there is an audit he's got to explain its origin

[JLMounce]

Originally Posted by MatthewKlein

How would a gun shop owner launder bitcoin payments from frowned upon gun sales

Owner of the shop needs dollars to pay the mortgage, utilities, gas, food. If there is an audit he's got to explain its origin

In small quantities you can use exchanges to cash out. Or you can borrow against the value of the coin like you can do with stocks. That’s why Bitcoin is inelegant when viewed alongside the dollar.

Let’s say you’re transacting on digital wallets with your customers. Just like taking cash to your bank, you can deposit the coin from your wallet onto an exchange or an intermediary. Many people use what is known as a stable coin for this. Stable coins are pegged to a specific currency. The most popular is USDTether. You trade your Bitcoin for USDC then sell those for dollars. You book the cash in your accounting software as if the transactions were made via cash/card.

You’re not hiding the payment from the government and you’re still paying taxes on it. But you bypassed your payment processor that may not like you. Possibly saving money on transaction fees at the same time.

The SWIFT system that includes payment processors use what’s called an MCC code with individual transactions. Here’s the current lists of codes. https://www.citibank.com/tts/solutio...gory-Codes.pdf

There is not currently a code specifically for weapon dealers as congress quashed that attempt last year. We aren’t talking guns but it’s when, not off that category gets added and tracked, giving any payment processor using SWIFT the technical capability of stopping that type of purchase if they wanted to.

Since Bitcoin’s ledger doesn’t have these MCC codes or any other type of transaction detail, it can’t stop the transaction for any reason as long as the network has consensus.

The end goal of course would be to pay your bills using bitcoin, not dollars. That is a long way off though unless there is some sort of black swan event that kills fiat currencies.

[pont3]

[QUOTE=JLMounce;6478519]In small quantities you can use exchanges to cash out. Or you can borrow against the value of the coin like you can do with stocks. That’s why Bitcoin is inelegant when viewed alongside the dollar.

Let’s say you’re transacting on digital wallets with your customers. Just like taking cash to your bank, you can deposit the coin from your wallet onto an exchange or an intermediary. Many people use what is known as a stable coin for this. Stable coins are pegged to a specific currency. The most popular is USDTether. You trade your Bitcoin for USDC then sell those for dollars. You book the cash in your accounting software as if the transactions were made via cash/card.

You’re not hiding the payment from the government and you’re still paying taxes on it. But you bypassed your payment processor that may not like you. Possibly saving money on transaction fees at the same time. "end quote"

Now there you go making things complicated again. Seems to me, you have to know a lot about monetary transactions, and, still, I cannot seem to grasp the concept of bitcoin existence. Nevertheless, I can't help wondering why the stock has soared so much. I remember when it plateaued at 40some k then fell to 17k and has since rebounded to 47k. So does that 47k represent the value of ONE bitcoin? Or how, exactly is it represented on dow?

For me, it is not the clandestine ways of transferring funds that interest me, but the idea of making a profitable stock trade. But with something so complicated I just don't see it as a sound investment.

You sound like you are an investment banker or some other arm of our financial system, and I really appreciate your input. You have given me/us the most detailed explanation of this crypto stuff to date. Thank you!

[kingbuzzo]