"Honest money" is an oxymoron.
Wrong.
Honest money means money that thieves can't counterfeit. Money produced by real effort, not government edict.
You wouldn't have civilization without money and the division of labor that it enables.
When politicians corrupt money with inflation it leads to economic chaos and social disorder (e.g. Zimbabwe, Venezuela) because it permits consumption without the requisite production. Instead of society being able to accumulate wealth and improve living standards, consumption swamps production and real wealth declines, along with living standards.
You can argue that the US dollar is worse than crypto but at least dollars are backed by something distinct and real: US power.
How? What does that mean to you?
'Backing' in a monetary sense meant the paper notes were simply warehouse receipts for tangible goods (e.g. gold)
Tangible goods that had to be produced by actual effort (mining and refining the gold).
The issue with counterfieting is that we recognize it is theft. The effort to produce a $10 note and a $100 are not different by a factor of 10x
Crypto is backed by what, exactly? Algorithms and massive energy expenditures. No intrinsic value.
'Intrinsic value' isn't an economic concept.
Value is personal and subjective.
Crypto is 'backed' back immutable laws of math that prevent counterfeiting, not the malleable laws of greedy politicians.
The value is found primarily in being a medium of exchange that the politicians can't abrogate with the printing presses.
I wonder how well crypto would hold up under a carbon tax?
Or a transaction tax?
Is crypto taxed as income when converted after appreciation? When? At the time of conversion, or when honest traders report it? At regular income rates or something else?
Current U.S. law:
Cryptocurrencies on their own are not taxable—you're not expected to pay taxes for holding one. The IRS treats cryptocurrencies as property for tax purposes, which means:
- You pay taxes on cryptocurrency if you sell or use your crypto in a transaction, and it is worth more than it was when you purchased it. This is because you trigger capital gains or losses if its market value has changed.
- If you receive crypto as payment for business purposes, it is taxed as business income.
- If you successfully mine a cryptocurrency or are awarded it for work done on a blockchain, it is taxed as ordinary income.
Because cryptocurrencies are viewed as assets by the IRS, they trigger tax events when used as payment or cashed in. When you realize a gain—that is, sell, exchange, or use crypto that has increased in value—you owe taxes on that gain.
Crypto has notably been used by criminals and terrorists because it's hard to track. What's the solution to those problems?
I've already pointed out that the criminal complaints are exaggerated, shrinking relative to other uses, and frankly dwarfed by the illicit use of USD.
Maybe you want the government tracking everyone's transactions, and thus see it as a 'problem' if the government can't, but I would view that as a privacy feature. That having been said, I think the blockchain is much less private than people assume.
