Yes 100% pay the taxes you owe. It is the correct, ethical and legal thing to do. To do anything otherwise is stupid. Do it.
Having said that... Bitcoin is supposed to be Peer-to-Peer money. I believe that vision, as incredible, extraordinary, and universal as it is can be realized at least in part by the Lightning Network.
However under the current rules, every Zap, every tip, every Satoshi is a taxable event...
Want to provide liquidity for Boltz/Atomic Swaps?
Taxable Event.
Run a routing node and receive 1 sat in routing fees?
Taxable Event.
Receive 10 sats, no 1 sat on Stacker News or Nostr... that has to be tracked for the exchange rate at the time received vs the time you 'sold it' (sent it? gifted it? spent it on Nostr????)...
Taxable Event.
Capital Gains on that Zap baby.
Question:
Is each lightning channel a 'different wallet' - for the purpose of defining 'cost basis'? Or maybe it's based solely on the "Lightning Node" itself, regardless of the number of channels within?
What if you're using Bip-85 Seeds (as some Lightning Wallets do) or Bip-85 on-chain... is that a separate wallet or considered part of the same one?
What of the account function, clearly a design element of Bip-39 useful for privacy, record keeping, or separation... Is that a different 'wallet' for accounting or tax purposes? Or is it considered the "same one" in a different 'account'??? Cost basis is wallet-by-wallet after-all?
Then when it comes to tracking 'individual UTXOs' (for cost basis and capital gains) well what if they are consolidated? What if part of a UTXO is spent to open a Lightning Channel? How is Cost Basis figured then? Doesn't that UTXO practically constitute the new 'cost basis' for a new Lightning Channel? Or is it the average of the Lightning Node and its "cost" from multiple 'UTXO openings'?
And if multiple UTXOs are used to open 'multiple channels' on ONE Lightning Node... isn't that separate costs basses for each UTXO? So it would be "per channel" instead of "per node"?
And what if 'sats are received' individually to each channel over time... considering how volatile Bitcoin's exchange rate can be?
Does that make any sense?
Doesn't anyone see how ridiculous this is?
Now take into account a 'CoinJoin', UTXO splits and consolidations, Lightning Channel opens, purchasing Lightning Channels, earning Sats (minuscule amounts of money) via Nostr or Stacker News...
Swapping to Liquid, closing channels (with the fees subtracted from Cost Basis)...
Simultaneously receiving Sats on Stacker News as a part of a community, global and world-wide...
In addition to buying the occasional coffee and there aren't that many places to get Bitcoin Coffee but Bitcoin has to work somehow...
How the hell is anyone supposed to 'calculate' this stuff? And it's 'per UTXO'? 'Per Wallet'?
That Satscard with ~50000 sats on it + private key... is a 'wallet' right? Does that have to be documented/screen-shotted and time-stamped? It has a cost-basis too right? But it's just a card?
Did anyone think through these rules and how it makes 'Money Better' for millions of people? Isn't that the purpose of Government, to better people's lives???
Let's be honest: The new IRS rules are designed for one thing - to have the 'user' buy coins on a KYC exchange, hold them in an "unhosted" wallet, never move them or do anything with them save look at them (like that does anything???) and then....
Sell them on that same exchange after the price goes up for 'fiat' money (dollars euros etc).
That's it. Done. Finished.
When the next "greater fool" buys in and the price goes up... sell them on an exchange and since the UTXOs haven't done anything, moved, or changed in any way then the "cost basis" for each UTXO should be easy to calculate. It's 'exactly the same' as when he/she bought it on an exchange right? Safe Harbor right?
The divisibility, immutability, censor-ship resistance, global digital money that 'cannot be hacked'... none of those qualities are important. Buy from an exchange, put it all on one 'wallet', do absolutely nothing (because the accounting is too complicated), then sell when someone... the 'Wall Street People' want Bitcoin to go up.
Is that it? And Bitcoiners are OK with that???
The last 15 years of Bitcoin development, real development on the Lightning Network, on Bip-39, on Self-Custody on node software for Plebs... has been overwhelmingly dedicated to making Bitcoin "better money" and WOW Bitcoin is an incredible idea.
But to the government it's just a... plaything. Buy it, document it, announce it, hold it (never move it) don't transact in it generally speaking even if you are a developer... and then wait for the "greater fool" to come in and buy it off you on the exchange. That's good-ole Bitcoin (TM) the investment. Hey why not just buy the ETF we don't need Nodes or Developers or Innovation anyway.
Done... Complete... That's it. No need for Lightning. No need for Privacy. No Need for Payjoins, Silent Payments, Onion Routing... or the zillions of software solutions available to Bitcoin users worldwide still in development today to make Bitcoin better money to all nope.
And If you are a developer, every single sat, every single 1-sat Lightning Transaction, is a taxable event so of course you're keeping records of every one.
And since every transaction (regardless of how small) has 'transaction fees' which (as I understand it?) can and should be subtracted from your "cost basis"... then every transaction should be 'tracked' and the transaction fee recorded for every transaction...
And don't worry about the 'privacy' of such a document recording every UTXO and every transaction you've ever touched.
Save it on your computer - or better 'save it to the cloud' what's the worst that could happen?
It's not like this stuff is valuable and there are bad people in the world anyway right?
The government will protect you after all... just like they protect the rest of their IT Systems???
I don't know why more people aren't talking about this. Some people are putting their head in the sand (and I guess I can understand why). However it's like hoping the Bear will somehow 'eat someone else first'. It is, in my opinion, a tremendous attack on Bitcoin not to meet the taxpayers, developers, and Bitcoin community half-way... and the absolute absence of debate, the 'deafening silence' towards this greater issue of "Bitcoin the Money" I cannot for the life of me explain.
Bitcoin in my opinion has a very limited future as a database entry you trade with exchanges. It has an incredible future as freedom-oriented money, the best of its kind, revolutionary and a tool for hope and better savings for millions or Billions through layers and clever solutions.
I want better money. I am here for 'quality money'. I am not here for 'get rich quick' and you know what? Bitcoin the exchange-database entry will be worthless anyway so in the end it won't matter I guess people get the money they deserve.
HAVE FUN PAYING YOUR TAXES YOU STATIST CUCK
People need to rise up and stop following politicians orders. Taxation is theft and has to END. I do not want lower taxes, i want NO TAXES. A civil war is necessary.