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37 sats \ 23 replies \ @028559d218 24 Mar \ parent \ on: Replacing Cash With CBDC Would Pose A Grave Threat To Our Rights and Freedoms econ
Just like you put, I never understood a CBDC currency that a central bank issues directly... because commercial banks "in the west" play such a roll in intermediating currency. Commercial banks are 'fractional reserve' like you mentioned... but a CBDC can't be? How can a central bank be fractional if it issues the CBDC directly? Where does lending come from?
The other thing is privacy. Even if a UTXO is 'kyc-ed' to an individual... once a Lightning channel is opened with that UTXO the lightning transactions are off-chain.
The UTXO 'seller' can see that a channel was opened maybe, but after that the transactions are private, right? The 'closing balance' of the UTXO is on-chain perhaps for the UTXO-seller to look at... but they don't know where the "rest" of the UTXO actually went or with whom the channel was opened. Maybe the UTXO is almost completely depleted, then sent off into the 'void' meaning that even with KYC the transactional activity is private.
Because of this I never understood the purpose of KYC
KYC assigns/identifies ownership of L1 Bitcoin and enables taxation enforcement and potentially L1 payments censorship.
Yes if you move BTC onto LN then any LN subsequent transactions are not on the BTC blockchain, but are they potentially track and traceable by the LN itself?..and technically you should have declared the transition from L1 to LN as a tax assessment liable event.
KYCing most of the Bitcoin held on the blockchain also increases the potential for a ban on private custody- If they know you have Bitcoin they can offer to compulsorily acquire it and if you refuse that offer the government knows you still hold it or have disposed of it without paying any tax due or at least filing the appropriate tax assessment.
KYCing with the ability to monitor ownership and subsequent tax liability makes it extremely inconvenient to lawfully use Bitcoin as a MoE as each and every transaction is liable for tax assessment.
KYCing plays a vital role in strongly discouraging / effectively obstructing the widespread use of Bitcoin as a MoE.
Every time we zap each other on SN or otherwise use LN for payments, we are probably, technically, in breach of tax reporting and liability requirements.
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and technically you should have declared the transition from L1 to LN as a tax assessment liable event.
99.99% of Bitcoin users if using Lightning will never do this.
Every time we zap each other on SN or otherwise use LN for payments, we are probably, technically, in breach of tax reporting and liability requirements.
My guess is that 99.9% of Bitcoin users are probably ignoring this or will ignore this.
Look at the zaps and sats on Nostr... are people declaring those for tax purposes?
but are they potentially track and traceable by the LN itself?
My understanding is that while Lightning is technically traceable, it is very difficult.
If they know you have Bitcoin they can offer to compulsorily acquire it and if you refuse that offer the government knows you still hold it or have disposed of it without paying any tax due or at least filing the appropriate tax assessment. KYCing with the ability to monitor ownership and subsequent tax liability makes it extremely inconvenient to lawfully use Bitcoin as a MoE as each and every transaction is liable for tax assessment.
If there are as many Bitcoiners as there supposedly are (according to Coinbase there are ~20% of the US population) there is no way the enforcement can take place for every zap, and every sat and channel close. It is completely impossible.
It would be like the government in the US deciding to 'confiscate all the guns'. Aside from the legality of doing so... there are over 300 million guns in individual homes and the manpower and resources to go 'door to door' doesn't exist. Or go door to door to collect seed phrases and lightning nodes (which is just software after all).
I say this especially considering the 'war on the federal government', for better or for worse, being waged by the Trump administration. I would imagine most federal employees are just trying to keep their jobs... not pay attention to Bitcoin Lightning transactions of little consequence
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Agree it would be difficult if not impossible to track and trace LN zaps but LNs are centralised and can't those centralised operators of LN be served with enforcement orders or the like?
SN itself appears to have been forced to implement CCs to avoid potential legal consequences of mediating LN payments- perhaps that was more under the Chokepoint2 Biden administration but its stuck.
Yes it seems doubtful if many if anyone is recording every LN zap and reporting it for tax- it is simply too absurdly onerous - and that is my point- they have deliberately made lawful Bitcoin/LN MoE use effectively impractical...while not doing so explicitly but rather very slyly!
Every time we do use it we are exercising peaceful civil disobedience against the fiat debt slavery bankers cartel and their colluding - client governments.
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I think the capital gains stuff is really about 'traders'.
And specifically 'traders' who never take self custody but just buy and sell looking at some charts on coinbase or Kraken or somewhere else. Click to buy Click to sell rinse repeat...
Smart Bitcoiners 'don't sell' (for obvious reasons) not only because it's a dumb idea, but because selling is trading and 'trading' is a losing strategy.
And imagine all the 'shitcoinery' that needs to get reported to the 'authorities' - trading, selling, staking, NFTs, memecoins, tokens based on farts, dogs, penguins, Elons... more staking... 'safemoons', 'reddit moons', 'airdrops'... it's all complete nonsense of course.
But it's all 'taxable events'!!! I mean can you imagine the complexity???!!!
Who is going to parse and report all that stuff? Bitcoin is simple by comparison and if you're not trading does anyone care?
With regards to Lightning... it's easy to spin up a Lightning node and connect to 'another' node in almost any country. I don't know how nodes get served with 'orders' much less how they get enforced on individuals for using software.
Phoenix for example isn't even 'in' the United States - are they going to get served an order by the Americans?
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The capital gains tax certainly captures traders but it also makes 'legal' MoE use of Bitcoin whether L1 or LN effectively impractical- it results in Bitcoin being effectively only practical to use as a SoV/speculative commodity- and not a MoE...and in achieving that outcome (which they largely have) they (the fiat operators- ie banks and governments) protect and preserve their precious fiat MoE hegemony.
Think of the importance of SWIFT as a US strategic lever ~ to understand the importance of MoE hegemony.
My admittedly limited understanding of LN is that it is centralised and as for the US exerting its jurisdiction over others there seems to be a variety of ways this has been and could be done - effectively most of the developed world is both militarily and monetarily subservient and tributary to the US.
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Dude (and I apologize if you're not a dude I shouldn't assume)...
The US is doing absolutely everything it can, as fast as it can, to reduce its influence, dependence on, and relationships with all its traditional allies. The US is trying to make the rest of the world - developed or not - as distant from the United States as quickly as possible.
Everything else is "Europe's fault" or "Canada's fault" as to why the US isn't as prosperous as it used to be... and why China is growing faster economically than the United States.
My admittedly limited understanding of LN is that it is centralised
My understanding is that while it's not as decentralized as 'on-chain'... it is decentralized it's not just a big liquid or something. There are tons of apps, node implementations, open source node software, android implementations etc...
If the US controlled everything like it did 40 years ago... maybe the US could go door to door tracking down every lightning company, LSP, liquidity provider, node company, Lightning implementable, android repository etc...
But now? Now way. The Europeans will say 'screw you' 'none of your business' and the US is too politically chaotic and determined to tariff itself 'for freedom' to do anything constructive.
I wish this weren't the case, as the US in my opinion used to be a totally different country.