Let's talk about Regulations, laws, and more taxes.
It seems like the government doesn't have anything better to do with their employees than to think on the way to screw the little guy. When it comes to the crypto world, I can see governments trying to fight the death of cryptocurrencies, and I guess they don't see it yet that they are on the way out and that society will be better off without them. It is a long fight ahead. Who will win on one knows. Still, one thing is sure the crypto people are fighting without a single shot being fired. That's the intelligent way to wage war, in my opinion.
Zimbabwe sees price distortions on gold because of the South African tax rebate, which applies only to recycling gold, so gold smugglers fabricate transactions claiming they have paid the 15% VAT tax, but the goal is not to reclaim the gold. It is affecting Zimbabwe's prices. One of the properties of Gold is that you can melt it, and it will be tough to distinguish what kind of gold you have once you melt it. And this is the kind of deficiency that governments create in their effort to tax their citizens. The more you tax something, the more people will seek not to pay that tax.
The more governments try to extract wealth from the crypto world, the more it will move to the underground. Once taxes go beyond 15%, people will start to move their money in ways to get taxed less. The rich are already not paying taxes because they do it by moving their wealth a certain way. For example, the rich don't sell their assets. They borrow against them. They don't borrow to waste their money on beer and parties, and they borrow to buy even more investments that will produce income. And the crypto world is moving into that too.
Suppose you hold any crypto and sell your cryptos at centralized exchanges. In that case, you are doing it the wrong way. If you trade your cryptos to accumulate more, you should do it with decentralized exchanges. Once you have collected enough crypto, you should never sell it for fiat currency, you should borrow against it, and you should buy assets with that money, not waste your borrowed money. You don't have to pay any taxes on that asset because it is borrowed money.
You could also move to zero capital gains taxes territories too, and if possible, you should also buy your cryptos with peer-to-peer exchanges and pay your taxes. I am not telling you not to, and I am telling you to be innovative and pay your taxes as billionaires do. And the best part is that it is legal. You have to learn how the rich do it so that you can do it too. It is not financial advice, only my opinions.
Before you sell your cryptos for fiat, please do your research and find ways to avoid the tax bite. Cryptocurrency requires a lot of know-how taxes are the same try to learn about it because every territory has different laws regarding taxes. Study your tax laws in your environment. Remember that you decide when to sell in crypto, and you can choose not to sell if the taxes get too crazy. And if regulations get too restrictive, you can always jump to a greener lawn.
More and more people are getting into cryptocurrencies because fiat currencies worldwide have inflation issues. Hence, it is no surprise that now the guy that created MySpace is probably buying Bitcoin. The world knows about Bitcoin, but they know the issues that the first currency has, and they are yet to find out how the fees may affect their investment in the future. People that hold Bitcoin hold it for the wrong reasons. They believe it is a currency even when it's not, and they call it a store of value. Even when it is not, they will find out in the future that no one can afford the transaction fees.
If the rich are buying Bitcoin today, who will be the ones buying in the future, more affluent people? The working poor won't be able to afford the transaction fees, and I don't think that custodian services will be seen as good once regulations are also imposed on custodian services. More laws are coming for Bitcoin, but they will target the exits and entrances from fiat to crypto because that's the easiest target for governments. If taxes and regulations get too heavy on custodian services, one will use them to make the transaction fees problem more visible than today.
Governments can only effectively regulate custodian services which is what Bitcoin BTC is relying on to fix the transaction fees issues, and Lightning Network is just another custodian problem for Bitcoin. The way LN channels work can be categorized as money senders and subject to heavy regulations.
Suppose the world adopts the real peer-to-peer currency. In that case, the banks will be out of a job in the short future, and the rich countries are yet to embrace peer-to-peer currencies because their fiat currencies are still strong. Many third-world citizens have been forced to adopt Bitcoin BCH as a currency because their local currencies are worthless, and I suspect that the same thing will happen with rich countries. So if you live in a rich country, you better put some fiat into Bitcoin BCH.
And also, smartBCH will be here soon. Many say it will burn Bitcoin Cash, meaning that BCH will be deflationary. In the future, you will be able to lend your BCH in DeFi platforms that will pay you interest in Bitcoin Cash. I believe it will work like this, and you will lock your BCH in a smart contract that will print another token to sell to buy more BCH. The person who borrowed money will have to pay interest to those lucking their satoshis. Tools that utilize that idea will be created once smartBCH is in the main net, not to mention that also BCH will have the same tools that ETH has. I expect a Uniswap version for BCH but maybe with a different name same functionality. I think that Detoken may play an essential part in smartBCH, too. At this point, that is my speculation when it comes to Smart contracts and SmartBCH.
Regulations are coming and will be implemented in the crypto world. How harsh they will be will depend on many factors. Still, if governments decide to go too draconian on the crypto world, they may see a fleeing of brains to other parts of the globe, and if taxes are too high, they may also force people to move under the radar, which will hurt their citizens at the end of the road.
Today we can speak freely, but there will be a time when talking about taxes and regulations may come with a heavy penalty. Don't do or don't think that my words are financial advice or tax advice because they are not, and you are responsible for your actions, and I am only one individual on the internet speaking his mind. You should do what is best for you, and you should always follow the laws in your territory or country. This article has been an exercise of my right to free speech.
https://news.bitcoin.com/myspace-tom-anderson-is-buying-the-dip-posts-laser-eyes-meme-on-twitter/
