Bitcoin Is A Black Box To Many Government And Tax Regulators
Category : Uncategorized
Earlier this week, the European Court of Justice decided to exempt bitcoin transactions from Value Added Tax (VAT). The IRS in the US made its ruling on Bitcoin way back in March of 2014. The European ruling has been heralded as good news for Bitcoin while the IRS ruling was not so welcomed.
The point is that governments across the globe have still not reached any type of consensus as to what, exactly is Bitcoin and how to treat it. And all this confusion in governments is happening when the introduction of Bitcoin was over 6 years ago.
That is because there has never been anything like Bitcoin before. The governance of current financial assets evolved when those assets were first, commodities such as gold or silver and later became debts recorded on paper. The computer but even more the Internet made the debt and paper model untenable. Only 3% of US currency is represented as paper “dollars” meaning only 3% of the money issued has any unique identifier attached to it (i.e. the serial number of the Federal Reserve Notes). The remaining 97% of currency has no such unique identifiers and, so, can be created ad infinitum.
Trying to make a mathematically and technology superior system such as Bitcoin match up with such a corrupt and irrational system as what the world governments now operate is an impossible task for regulators.
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