Just let your government realize that a) you don't pay tax, and b) that you follow the recommendation of using different addresses blah blah, in other words transactions are not traceable. Then you'll have your crashdown.

If you can't pay taxes with them, can you at least deposit them at your bank?

Several nations have started treating trading of bitcoins in exactly the same way they treat trading on currency markets or the same way they treat physical property, depending on the nation.

The governments may not accept bitcoin as a way to pay, but they acknowledge it as trades of value.

Specifically for the US, under current tax law they are treated as a valuable property. Changes in value between purchase and sale price must be reported as capital gains or capital losses. Mining bitcoins is counted as taxable income with a value equal to the value at the time it was minted. Transactions that meet financial reporting limits (over $600 in a year) must be reported based on the estimated cash value of the transaction at the time.

Very importantly to many people in the US, because it is treated as valuable property that must be reported, and treated as income when it is mined, any person facing a tax audit can face enormous fines for not reporting the alternative income or the high-value trades. Those in the US need to file an amended return if they had anything to do with bitcoin since 2012. Before 2012 you're probably outside the time limits.

Canada apparently treats it as a money-services business, transactions are like trading currency for profit. The UK requires VAT on transactions and follows capital gains/losses rules.

If you are not paying taxes on your digital currency transactions, the tax man will likely discover it in the near future. Governments use large fines and prison time against those who fail to pay taxes; withholding money from the government is on of the most heinous crimes.

So what did your bank say to you when you asked it if you could deposit cryptocurrency?

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I still don't see how if I lend someone $100, and then they later only have to pay back $90, I've somehow made $90.

Treat 'debt' and 'money' separately. This will make it easier to understand.

Remember, you do not have the license to do do what the Lender does. You can't make money, the Lender can. If you do it, it's called 'conterfeit', if the Lender does it, it's called 'credit'.

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Some might have missed my last post on the previous page. (Hopefully it expands/explains a little clearer.)

So what did your bank say to you when you asked it if you could deposit cryptocurrency?

I thought at least somebody would say: "They laughed. And laughed. And laughed, and laughed, then I hung up - as they were still laughing."

I just wanted to summarize before I start the new thread for 'Step 2' (and thank you for your questions, it has helped refine the explanation - I only hope it might be of some use to someone someday.)

Warning: It's wordy...

(...but's that okay, because, I know words, I'm great with words, ask any word, words love me, I'm going to make words great again.)

I've heard that Economics is referred to as a "black art".

I typically hear economists say what they "believe".

I don't want to sound 'Utopian' here.

For a long time, I wondered why some people were able to 'make' money while others had to 'earn' it. It never occurred to me that money was actually, literally being 'made' through loans via various financial-institutions with a license to do so.

I didn't mind so much. "Good for them." I thought. The only thing that didn't make sense was why everyone seemed to be perpetually trying to stave off bankruptcy. "Where the beep is all the money actually going? It can't just vanish."

Enter 'being introduced to debt'. "Hello Debt, nice to meet you, I've heard so much about you." When I first realized how debt could be used to generate A LOT of wealth, I thought "Cool." followed by "Oh, shit. I'm not willing to be that evil. Surely there is a way for people/businesses to be debt-free without Banks being out of pocket." Sure enough, there is, and as it turns out, the simplest solution is also the best one.

Turn >100% debt into <100% debt, and here's why/how...

How Is This Even Possible?

Only the Central Lender can loan new money. But it does not lend directly to the public. It lends to other Lenders or to Government. The Central Lender also gives permission to Banks to create money, but there are strict rules for how to do so. The important thing to remember is that if the nature of debt changed (from one that is always trying to collapse the economy), the economy would be able to achieve its potential in this age of technological advancement.

Money And Debt Are Not The Same Thing

Unfortunately, at the time of writing, the sum of all debt is greater than the sum of all money. "So?" you might retort. In an ideal world, we'd like the Lender to accept other forms of payment, unfortunately, that would mean asking the Lender to sacrifice their controlling interest in the economy. Even though a person can produce something of 'value', the Lender is only interested in being repaid in the form of currency of which it issues.

Don't Get Me Wrong, Money/Debt Is A Good Thing

Money is an extension of barter. Money is great because you don't have to walk around with a ledger and bunch of receipts trying to prove what you're owed. The other reason why money is great is that the values can change over time and you don't have to be forced to reserve different prices for different people like you would in a so-called "mutual credit economy".

Greater Than A Hundred Percent Debt Based Economy

To say you live in a debt-based economy is not accurate. You actually live in a (greater than) >100% debt-based economy. >100% Debt is being sold as a good thing - your instincts probably say otherwise. A ">100% debt-based economy" would seem like a very tough sell (from my perspective), no-one would willing agree on being sold such a bad deal. It's the kind of deal that is detrimental to your wealth. It's like a black hole of finances. It's quicksand. It only exists today because the public implicitly agreed to it and generations afterwards have accepted it without question. It's a difficult 'spell' to break.

How This Effects Everybody

When deflation is greater than inflation, it affects everything from its point of origin outwards in a negative way. The consensus among economists is that hyper-inflation is bad. The irony is 100+% deflation will cause hyper-inflation. I don't blame anyone, including economists, for not noticing this. It's hidden-in-plain-sight.

Naturally, "Supply & Demand" ought to determine the price of resources, products and services. What is interfering with 'S&D' is money that becomes devalued because more is constantly needed - the price before is no longer enough to cover expenses.

The "Unsustainable" Cycle

So what stops the economy from failing? A delay. A delay between the point of inflation and the point of, shall we say, "Hyper-Deflation". Without that delay, every market dependent on money would crash instantly. It would fail before it could start. But because of the delay, the name for these inevitable failures are referred to as a 'recession'/'depression'/'crisis'. In actuality, these are "delays" of hyper-deflation that are beginning to shorten too quickly.

As a quick-fix, more "credit" is thrown onto the problem. But the problem never seems to go away. But there is a logical answer to the problem that benefits ALL.

Shifting Debt

Even if a person or a business manages to manoeuvre themself within the economy to be debt-free, the debt has simply been shifted to somewhere else. The debt may continue shifting until it causes bankruptcy/joblessness foreclosure/homelessness. It makes me sad to see this play out because "I" know it is completely unnecessary. To treat the symptom (rather than the cause) more "credit" is issued but 'Debt' always tags along for the ride. Which would be okay except for, 'Debt' (currently) demands over 100% share of the pie/market.

All Your Money Belong To Us

Technically, in today's world, there exists a privilege/license to essentially create money-from-nothing. It has its origins, long ago, in the form of 'receipts' which could redeem gold at goldsmiths. The method has evolved into the form that it is today, however, money can no longer redeem gold. It is the 'borrower' that is actually promising to 'do' something of value. The Lender does not have to do any work equivalent to the total value of the loan. It also does not have to provide tangible assets equivalent to the total value of the loan. In other words, it gets to pretend. The only difference between the Lender and anyone else is: It is enforceable.

Remember, you do not have the license to do what the Lender does. You can not make money, the Lender can. If you do it, it's called 'counterfeit', if the Lender does it, it's called 'credit'.

So, Hyper Deflation = Hyper Inflation

Every dollar issued, is a dollar owed. To make things more complicated, every dollar owed has interest owed on top of it. To pay the interest as well (and avoid your assets being taken back from you), you need to find more money than was actually issued. I call it a domino-effect of usury. This is why some people perceive 'money' as the root of all evil, but it is not the money itself.

Why?

The Central Lender has unsatisfiable greed. It doesn't want to part with any treasure and has the desire for even more treasure. The Central Lender will 'lease' treasure for a price. Guess what that 'price' is. It's more treasure. Now change the word "treasure" into the word "money".

For this reason, when debt is >100%, it only shifts, it never entirely goes away.

Your And Your Lender's Contribution To Society

The Lender facilitates the need to provide a trustworthy means of flexible/dynamic trade. But rather than create credit on behalf of one party for the other (for which the Lender could reasonably expect a small profit for providing mediation), it claims to already have that amount and loans (the newly created money) instead. In this situation, the Lender is OVERvaluing its contribution while the borrowers are UNDERvaluing their contribution to the society of which it shares.

A Debt Is A Debt, Render Unto Lender

Your Government decides what is legal tender. Your Central Lender issues legal tender. Here's the sneaky part: (At the moment) there is a conflict of interest between the Central Lender and the Government of the people. The Central Lender 'thinks/believes' you are still living under a monarchy. It (the Central Lender) doesn't yet 'know' that times have changed. What is ironic, is that 'the people' haven't noticed this.

Because everyone has agreed to use money to represent the trade of resources, products and services - they don't realize or haven't noticed that they've also agreed to the idea of the Central Lender owning ALL money it has allowed into existence and is expecting more in return than it has given out. In a completely real manner, the Central Lender technically OWNS everything, much like a monarchy would.

We are now far beyond the opportunity for a fresh start since the system has become so entrenched. The only resolution is renegotiation. The part to be renegotiated is what the percentage of debt should actually be and why.

Benefits

I probably can't stress enough the benefits of the suggestion, of renegotiating debt to be under 100%.

Economic stability. An ease to economic woes. To reduce the need for 'artificial' occupations (i.e. jobs that must be created for the sole purpose of providing an income). To promote automation without displacing people financially. To allow a voluntary reduction of working hours without sacrificing the affordability of the cost-of-living just as automation 'naturally'/gradually takes over workload & work duties. To allow useful businesses to remain profitable even during slow periods. To reduce the need/pressure on consumers to spend needlessly (just to keep the 'false-economy' alive) and therefore, hopefully, reduce pollution. To give people more opportunity to volunteer for worthy causes. To improve quality of life...

Renegotiation

It may seem difficult to re-regulate "insatiable-greed" but an effort to try, must be made. Ethically, 'odious' debt ought to be considered for forgiveness.

Renegotiation is possible and preferable. It would require awareness/understanding on the part of the public to influence their representatives. Rather than thinking in terms of a "revolution", think of it as another "renaissance". The more people understand and talk about it, the more likely the conversation in politics will change. It's your Government that has the power to change laws/regulations. But it's the ordinary voter that chooses who they want representing them. Since in a democracy, the majority wins - the majority of people need to understand this concept (fully).

Whether it be 99.9% or 99.99% or even 99.999% etc. debt, it would be a far better outcome than what presently exists. Of course, conditions/restrictions would have to apply to avoid exploitation. It should also be noted that the new 99.9'etc.'% debt would need to be applied retroactively on all current loans as well.

It's not a one-stop fix to everything, but it would be a very good start.

You have my permission to copy and paste this.

BR

EDIT: Sorry, I had to make a few changes. I need this to be, as humanly possible, easy-to-understand.

So what did your bank say to you when you asked it if you could deposit cryptocurrency?

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I still don't see how if I lend someone $100, and then they later only have to pay back $90, I've somehow made $90.

Treat 'debt' and 'money' separately. This will make it easier to understand.

Remember, you do not have the license to do do what the Lender does. You can't make money, the Lender can. If you do it, it's called 'conterfeit', if the Lender does it, it's called 'credit'.

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Some might have missed my last post on the previous page. (Hopefully it expands/explains a little clearer.)

Like a bank doesn't keep all deposited cash at bank and "invests" only with profits, a legal tender (those non-US ones to be precise) prints money more than its gold reserve as well.

It costs around 14-15 cents to print a $100 bill and you can buy $100 worth of commodity or services with that money. What differentiates US Dollar from the money I'd print at home is the trust that it will be paid back "somehow" , as USD no longer has a promise to pay to bearer since ages ago after all.

In addition to that, most of money in the world isn't even printed but injected into circulation electronically, they are somewhere in the banking system as long as no one wants them to be handed over physically.

So at the end, system relies on trust (that everybody won't withdraw money at the same time, it keeps as a foreseeable manageable risk) and creates a coefficient based on perceived risk. Actually, most of banks/financial institutions/ponzi schemes are bankrupted because of that "investor" panic.

Upon several reviews of the "summary", I noticed that some of the sub titles and order of paragraphs were creating more confusion than clarification. I have updated the "summary" post.

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As for lending - the argument by which banks "create" money is that when they lend out money that's deposited with them, the money gets counted twice (or even multiple times if that lent out money is redeposited). This is different to counterfeiting. In fact, an individual can do this, we just don't do it on the same scale as banks.

As far as I'm aware, an 'individual' cannot by law do this.

once the loan is paid back, the credit - and hence the created money - disappears again.

I'm curious to know as to where you got this information.

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When financial-debt is greater than 100% throughout the entirety of the system, it distorts the priorities of every individual (not to mention it also distorts the value of money itself). It makes genuine trade so much more difficult. It makes genuine wealth so much more difficult. It's like an economy driving with the handbrake on.

To say there is no problem is to say you enjoy poverty; to say you enjoy unnecessary pollution; to say you enjoy working long hours; to say you enjoy being made redundant by automation; to say you enjoy not being able to own property for the duration of your lifetime.

I can't advise any other fair and logical alternative.

As for lending - the argument by which banks "create" money is that when they lend out money that's deposited with them, the money gets counted twice (or even multiple times if that lent out money is redeposited). This is different to counterfeiting. In fact, an individual can do this, we just don't do it on the same scale as banks.

As far as I'm aware, an 'individual' cannot by law do this.

Can you actually address this part of mdwh's post:

Suppose person A gives me $100 for safe keeping. I think "He's not going to ask for that back in a while, I know, I'll lend it out to someone else." So I give the $100 to person B.

So A thinks he has $100, and B now has an extra $100 - I've created money with credit.

So you're suggesting I should be happy if B only pays me back $90. And that means I'm now $90 better off. This seems to be down to a misconception that because I (or the bank) created money, that created money remains in existence for the me or the bank to keep.

But it doesn't - once the loan is paid back, the credit - and hence the created money - disappears again.

And think about it: So I've now got $90, what happens when A asks for his money back? Now I've lost $10.

So I'm wondering how on earth I was meant to have made $90 or $100; or why there was any point in lending money out to B.

mdwh's example is simple and plain. Can you respond to it, using simple and plain language?

mdwh's example is simple and plain. Can you respond to it, using simple and plain language?

It does not work if you give the same 100 out. In that scenario, you would lose 10.

Only the Central Lender can loan a new 100. But it does not lend directly to the public. It lends to other Lenders or Government. The Central Lender also gives permission to Banks to create money, but there are strict rules for how to do so.

mdwh's example is simple and plain. Can you respond to it, using simple and plain language?

It does not work if you give the same 100 out. In that scenario, you would lose 10.

Only the Central Lender can loan a new 100. But it does not lend directly to the public. It lends to other Lenders or Government. The Central Lender also gives permission to Banks to create money, but there are strict rules for how to do so.

You are right on the fundamental differences between shares and bitcoins. But they share one thing: no "real" value backing the concept.

Ah, that is not true. The value of shares consists of two parts. The usually greater part is part defined by the bigger fool principle. It is, indeed a "no value" value.

But with shares you also own part of a company. Shares are not debt, they are ownership (without obligations, which is a funny thing). As owner, you have, at least in principle, a bit of a say in business decisions, and the leadsrship board has to answer to you. They do that once every year, too (I know people who own 1 share of three dozen companies and have nothing better to do than go to shareholder conventions all year for the free beer and food).

In practice, of course, you would need to own millions of shares for deciding anything, and almost all companies are effectively owned by 1-2 people (rarely more than 5-6) holding >50% of shares, so it's really just them deciding, but for example you only have to own 20% in order to have a veto right on business decisions. Yes, 20% is still quite a bit, but it's nowhere near the majority.

But the thing is, even with one share, you own a part of the company. With one bitcoin, you own shit.

If bitcoin gets bad press tomorrow because someone found an exploit and makes a website with a nice logo for it, then your bitcoins are worth zero over night. Your baker will start laughing frenzily if you try to buy a real bread with your worthless numbers. Your car insurance will tell you "no sorry", too.

If the car manufacturer that you are holding shares of is found cheating exhaust tests, well... then that is not precisely good news for your portfolio. But your shares are still worth a part of that company. You can still try to get some of your money back by drinking their free beer... :D

Well, that might be true for the many smaller fries that are realistically valued on the stock market. You know, your neighbourhood bakery that is valued at some 100k$, calculated from the money and machines they own, and the amount of money they usually make in quarter or so.

As soon as we enter the world of the bigshots traded on the stock market, we leave the real world. Is Facebook worth the billions it started trading as? The stock market said no... and some people lost lots of money. They are still traded way too high IMO for a company that AFAIK to date still failed to make as much money as people believe they do (or should do).

Is apple worth as much as it is traded as? It makes tons of money, and was really successfull in the past. Does that say anything about their future?

I could go on. If we enter the billions of $ valuations, most of the money is attributed to POTENTIAL, not actual value. Is potential a value? On an abstract layer, yes, you could say so. Can you turn it into cash and buy a loaf of bread with it in a short timespan? No.

In these cases, Stocks behave similar to Bitcoins. If the trust of the shareholders is gone, the value is wiped out, no matter what the company behind it still owns in real value, or produces. Most of the value was a hypothetical, future value anyway. At least this part of the total value is just as much subject to hyper-fluctuations as are cryptocurrencies.