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Germany: Bitcoin Is "Private Money"

samzenpus posted about a year ago | from the real-cash dept.

The Almighty Buck 223

hypnosec writes "Germany has declared Bitcoin as a 'unit of account', which makes the virtual currency a kind of 'private money' and the process of Bitcoin mining has been deemed 'private money creation.' The recognition as 'unit of account' makes Bitcoin eligible for use in "multilateral clearing circles" and because of this citizens are liable to pay capital gains tax, if they profit from the crypto-currency by sale or purchase within a period of one year – the same as they would have to in case they profit by selling stock, bonds or other form of security. The question here is how the finance ministry would come to know of a person's Bitcoin holding as it is a decentralized currency with no governing body to keep count on the number of Bitcoins a person has. The German government expects that citizens declare their Bitcoin while filing their annual tax return."

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223 comments

Same as any other potential fraud. (5, Insightful)

Anonymous Coward | about a year ago | (#44604497)

Honor system, but if you do anything to get on their shitlist they'll eventually find it out when you try and get it converted into salable assets.

Undocumented income may be frowned upon, but UNDECLARED income is worse if you get caught.

Remember Al Capone after all :)

Re:Same as any other potential fraud. (4, Insightful)

Sarten-X (1102295) | about a year ago | (#44604589)

Exactly.

The question here is how the finance ministry would come to know of a person's Bitcoin holding as it is a decentralized currency with no governing body to keep count on the number of Bitcoins a person has. The German government expects that citizens declare their Bitcoin while filing their annual tax return."

...just like cash.

Re:Same as any other potential fraud. (-1, Offtopic)

Anonymous Coward | about a year ago | (#44604691)

Slashdot Crew,

Bit Coin is a new digital money popular to hackers and Anonymous, but now it’s getting attention from Bankers and WallStreet Types too. Hackers and computer programmer experts who have analyzed the Bit Coin code program have described it as “alien technology.” They are just tyring to express how sophisticated the program is, but do the research yourself and you’ll see that this is no joke.

Never mind that nobody knows who the anonymous hacker jesus Satoshi Nokamoto is who created Bit Coin. And never mind that the only popular faces of Satoshi Nokamoto look disturbingly like the ancheint faces on Mars.

Everyone said that the Singularity of the Mayan Calendar would signal the arrival of the rogue planet, Planet X, and the fulfillment of prophecy. And now everyone is laughing that nothing happened, but they’ll be the last laugh when they realize the TRUTH!

The invasion has ALREADY BEGUN, But we were fools the believe that flying saucers would fly over major cities like this was a movie. This doesn’t make sense because of the reality of space travel. Everything travels through space at different top velocities. Beings in the physical vibration travel much slower than beings in the energy vibration. That means that long before the physical arrival of the Reptilians, the signals of the Reptilians will reach us. That’s just physics. But if we recieve signals from them we’ll be ready for them and they know that. So, the signals themselves are crafted as an attack!

BIT COIN IS THE SIGNAL!
Bit Coin arrived on Earth from unknown origin, a immediatley proliferated on the Internet, and if you know anything about the Illuminati you know that the Internet is part of Skynet. The Internet was invented to aclimate us to digital world, and Bit Coin was invented to substitue for gold in the digital world.

Remember, the Reptilians want gold. The Sumerians knew this. The rogue planet Nibiru, or Planet X has a elliptical orbit that goes within Earth’s orbit every 3,600 years. Nibiru is the home of the Reptilians (also known as the Anunnaki) who came to Earth and genetically altered Homo Sapiens to crave gold, to mine gold for them. They used genetic manipulation to make slaves out of us. But they’re coming back to collect, and if mankind still craves gold when they do there’s going to be a war on their hands.

The Bit Coin Signal was created to trigger latent genetic codes in our gold craving genetic program. Bit Coin satisfies the gold craving genetic code, and tricks humans into accepting a synthetic substitute. Like aspartame and sugar. So when they arrive they can take the gold without fighting us for it.

The Bit Coin System is based on consensus. They say it can’t be manipulated by a central planner because in order to make any changes to the Bit Coin System you have to get adoption of the program change by the majority or users. But that’s assuming a closed system here on Earth. What happens when a million Bit Coin users, with a millions Bit Coin nodes, and a million Bit Coin mines, all arrive at once from Nibiru? I”LL TELL YOU!!!

They control the Bit Coin System. The Reptilians are coming and they’re bringing Bit Coin Consensus with them! And when they get here they’re buying all the GOLD!

The 2012 Awakening of Earth has begun too! And it’s the rebels, nonconformists and those exhibiting personal sovereignty who become the Light Warriors. It’s no coincidence that Bit Coin appeals most to these subcultures. Slaves of the Reptilians already run our governments, and our corporations and banking systems. We’ve already been invaded by androids and clones that walk among us but don’t have souls, and Bit Coin Signal is designed to spread that control into the rebel currency sphere to take control of the planet.

But there’s something we can do. Begining with the Singularity the Earth began being bombarded by highly charged particles that will result in a revolution of consciousness and activate the special gifts of everyone on the Angelic Human path.

Re:Same as any other potential fraud. (1)

Anonymous Coward | about a year ago | (#44604717)

Yeah, Silk Road is cool. Whatever.

Got Doritos?

Re:Same as any other downmod (-1)

Anonymous Coward | about a year ago | (#44604835)

Got Niggers?

Re:Same as any other potential fraud. (0, Insightful)

Anonymous Coward | about a year ago | (#44604783)

wat

Re:Same as any other potential fraud. (3, Funny)

Anonymous Coward | about a year ago | (#44604873)

I propose an experiment in conciseness. Let's strip the text of the fillers and only leave single instances of all the key words and phrases and see what we get:

BitCoin, Hackers, Anonymous, Bankers, Wall Street, Alien Technology, Jesus, Ancient Faces on Mars, Singularity, Mayan Calendar, Planet X, Prophecy, Truth, Invasion, Flying Saucers, Space Travel, Physical Vibration, Energy Vibration, Reptilians, Signals, Attack, Unknown Origin, The Internet, Illuminati, Skynet, Sumerians, Nibiru, Anunnaki, Genetically Altered Homo Sapiens, Genetic Manipulation, Slaves, War, Genetic Codes, Genetic Program, Synthetic Substitute, Aspartame and Sugar, Fighting Us, Manipulated, Central Planner, 2012 Awakening of Earth, Rebels And Nonconformists, Personal Sovereignty, Light Warriors, Governments, Corporations, Banking Systems, Androids, Clones, Souls, Control, Highly Charged Particles, Revolution of Conciousness, Special Gifts, Angelic Human Path.

Just as I thought - we managed to cut down on the length of the post and it still makes as much sense as the original.

Re: Same as any other potential fraud. (1)

hawks5999 (588198) | about a year ago | (#44604909)

You win the Internet!

Re:Same as any other potential fraud. (1)

Arancaytar (966377) | about a year ago | (#44605395)

You just went full time cube, man.

Re:Same as any other potential fraud. (2, Interesting)

Jane Q. Public (1010737) | about a year ago | (#44604779)

Admittedly off-topic:

"You do not have a moral or legal right to do absolutely anything you want."

Yes, you do... as long as you aren't harming others in the process.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44604861)

So you have the moral or legal right to do absolutely anything you want, except those things that you don't?

Re:Same as any other potential fraud. (-1)

Anonymous Coward | about a year ago | (#44604959)

You have a moral right to do anything you want, including harming or killing others since morality is entirely subjective. You have a legal right to do anything you want as well, so long as you can get away with it or you don't mind the prison sentence.

Re:Same as any other potential fraud. (4, Interesting)

Jeremi (14640) | about a year ago | (#44605097)

Yes, you do... as long as you aren't harming others in the process.

Where it gets sticky is in the definition of what constitutes "harming others". For example, some argue that self-abuse (e.g. chronic drug use, or suicide) counts as harming others, in that by removing yourself from society, the other people in the society lose the benefits of your productivity/friendship/support/expertise/etc.

Re:Same as any other potential fraud. (2)

tftp (111690) | about a year ago | (#44605129)

For example, some argue that self-abuse (e.g. chronic drug use, or suicide) counts as harming others, in that by removing yourself from society, the other people in the society lose the benefits of your productivity/friendship/support/expertise/etc.

As if those "others" have any right to those benefits.

But apparently many think so, and they want to keep you around, like a milk cow, to be milked of your labor. Prohibition of suicide is in most (all?) major religions for this very reason. A good slave must remain alive, no matter what opinion he may have on the subject. Nothing changed since middle ages; a person cannot control his birth, and may not control his departure. Others need your labor, peasant!

Drug users harm the society simply by being dependent on the drug. I always was in favor of giving the drugs (which are cheap if made in an industrial process) to anyone who is stupid enough to take them. Advise people to not do that, just as you currently advise people to not jump off the tall buildings and not to lick high voltage wires. But if they do, it's their choice. They can have as much drug as they want (it will become worthless in the street.) Narcomafia crashes and burns. And the average IQ of the society increases.

Re:Same as any other potential fraud. (1)

marcello_dl (667940) | about a year ago | (#44605519)

while I'm mostly agreeing that the "globalization" (increased interdependence from a complex system with the room of buttons placed far away the single citizen) makes us slaves in essence, I think society has a little right to frown upon people removing themselves from it, unless they made up for the effort society made in bringing them up. Your own family's effort is especially difficult to be offset.

Re:Same as any other potential fraud. (1)

tftp (111690) | about a year ago | (#44605685)

I think society has a little right to frown upon people removing themselves from it, unless they made up for the effort society made in bringing them up. Your own family's effort is especially difficult to be offset.

This suggests that there is a social contract that you can be entered without your approval, and that contract imposes duties upon you. I say hell no, there is no such contract until I review it and agree to it. The society does not have to raise children. It does that anyhow, at the risk that some children will grow to be bad members of the society. At least that's what an enlightened society would do. Most societies on the planet are not enlightened; they make children just because it happens, and because women like to have them.

It does not matter why the family produced a child. Usually it's just because the parents "felt the need." (Hardly anyone can claim today that it was financial reasons, or support in old age, that prompted them to have children. If anything, children usually make you poorer.) You can say "your own family's effort is especially difficult to be offset," but someone can say that "your own family's effort is especially difficult to forgive." Making a decision on behalf of a sentient being is a huge responsibility. As a trivial example, imagine two slaves who are held in a cage for all their life. They one day produce a child - who, of course, will stay in the cage with them. Was the parents' decision wise? Can the child, who will never see anything but pain and suffering in his life, forgive his parents? If their decision was not wise, is there a nonarbitrary threshold past which we can say that a given level of comfort is sufficient? Remember, nobody escapes death. Teasing people with life and then taking it away is cruel in itself, regardless of all the philosophy that people invented to avoid talking about this issue.

Re:Same as any other potential fraud. (4, Insightful)

jcr (53032) | about a year ago | (#44605413)

Yes, some people argue that, and they're wrong. It's like claiming that a slave who runs away is harming his owner.

-jcr

Re:Same as any other potential fraud. (1)

Anonymous Coward | about a year ago | (#44605433)

I would say that self-drug-abuse then requiring public health care counts as harming others. If you're wealthy enough to pay your doctors in full every time you harm yourself with drugs, I would have no problem with you.

Re:Same as any other potential fraud. (1)

Vintermann (400722) | about a year ago | (#44605149)

Except cash doesn't come with a full history of whose hands it's passed through.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605687)

Sure it does. Its called DNA.

Re:Same as any other potential fraud. (5, Insightful)

felixrising (1135205) | about a year ago | (#44604591)

Most taxation systems are self reporting. You can lie but if you get caught any profits from your deception rapidly evaporate.

But, now they're watching you (3, Interesting)

popo (107611) | about a year ago | (#44604847)

Of course, now that the NSA and Germany's equivalent can reach deep into your private online data, perhaps they *will* know exactly how much Bitcoin you have, and exactly how much you sold.

Re:But, now they're watching you (2)

Immerman (2627577) | about a year ago | (#44604943)

Yes, but they'll only mention it if you do something uncouth like criticize the Glorious Leader

Re:But, now they're watching you (1)

Anonymous Coward | about a year ago | (#44605095)

You can criticize the Glorious Leader all you want. But do anything to actually threaten the real rulers and you get the Snowden treatment - compare how much trouble the USA and their friends go to extradite/catch murderers and real criminals to what they did to try to get Snowden.

The real rulers of the USA are unlikely to be subjected to pesky stuff such as term limits.

And who in their right mind wants to be a US president when 9% of all US presidents have been killed on duty.

Re:But, now they're watching you (2)

Vintermann (400722) | about a year ago | (#44605177)

They don't have to, the block chain is public by design. You have to make great efforts to not link your identity to your bitcoin addresses - and if you at any time bought bitcoins at a public exchange, or used them to buy legal services (such as web hosting) the cat's out of the bag.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605455)

if you get caught any profits from your deception rapidly evaporate.

Plus jail time.

Re:Same as any other potential fraud. (4, Interesting)

fuzzyfuzzyfungus (1223518) | about a year ago | (#44604749)

Honor system, but if you do anything to get on their shitlist they'll eventually find it out when you try and get it converted into salable assets.

And bitcoin's design matchess the 'well, we don't really have any way of knowing; but you are in serious trouble if we find out' enforcement model pretty well. Watching the block chain [blockexplorer.com] is already a thing in suitably interested hobbyist circles, and doing so doesn't require any blackhat wizard-fu, it's a protocol feature. For the moment, the transaction history is also relatively small.

None of that helps them connect a person to one or more wallet addresses; but if they do, by other means (probably if you try to cash out, possibly by surveillance of improperly anonymized use), they get a full transaction history automatically.

Re:Same as any other potential fraud. (1)

Jane Q. Public (1010737) | about a year ago | (#44604803)

Doesn't matter. You can make a profit on Bitcoin, then do a little horse-trading with Bitcoin repositories, and if you did it right nobody would know that you made any profit at all... just that you now have X in Bitcoins.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605367)

Yes, but anyone who is not a criminal, would still report the profit and pay their correct tax liability. Not to do so would be ... well criminal.

the biggest fraud is the crypto (-1)

Anonymous Coward | about a year ago | (#44604851)

The biggest fraud with bitcoin is its dependence on elliptic curve cryptography. While it's neat for show and tell in Hollywood, it yields inferior cryptographic strength in the real world. I've been waiting to see someone attack bitcoin from the cypherstrength weakness, not just wallet theft due to platform vulnerabilities.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605163)

And, in modern countries (not corrupt banana republics like in Africa, or the USA), tax service are actually looking at your holdings, and expenditures. If you (or your family) spend more money than you can document you have earned or borrowed (on cars, property etc), then you are a tax cheater. And the tax service will estimate your unlisted profits, and you will have to pay tax of that + a fine of typically 3 times the cheated amount.

Small scale tax avoidance is doable. But large scale is difficult. Add to that, that any purchase over €1500 can not legally be made in cash, and you will start leaving a transaction trail.

The tax services here has powers far beyond that of the police. Tax evasion is a threat against the state.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605447)

Add to that, that any purchase over €1500 can not legally be made in cash, and you will start leaving a transaction trail.

German here, that's news to me... been purchasing items > €1500 fairly regularly for cash, with no ill effects son far!

AC just in case :)

Re:Same as any other potential fraud. (-1)

Anonymous Coward | about a year ago | (#44605545)

GP said he wasn't in the USA or Africa. While that narrows it down a bit, I don't think it leaves Germany as the sole possible answer.

Fucking imbecile.

Re:Same as any other potential fraud. (0)

Anonymous Coward | about a year ago | (#44605709)

The article is about Germany.

I'm out. Thank God (2, Interesting)

DigiShaman (671371) | about a year ago | (#44604517)

Way back when, I placed a pre-order on a small BitCoin miner from Butterfly Labs. Later they sent me an e-mail wanting to know if I wanted to continue with the order, or get a refund back to my PayPal account. I chose the refund. Thank God! Having to deal with all this IRS and other legal regulation shit is too much of a PITA. No doubt the NSA is tracking BitCoin transfers and users too at some level.

Re:I'm out. Thank God (2, Funny)

Anonymous Coward | about a year ago | (#44604597)

Yeah I hate how much influence the IRS has in Germany these days.

Re:I'm out. Thank God (5, Informative)

AHuxley (892839) | about a year ago | (#44604733)

Re:I'm out. Thank God (3, Interesting)

lxs (131946) | about a year ago | (#44605171)

Here in Europe thanks to the Euro crisis there is a big crackdown on tax evasion. This includes the German government doing grey area stuff like buying leaked confidential lists of clients of Swiss banks. So it stands to reason that they strike deals to help others catch free loading scum as well.

Personally I am proud that I pay my fair share to improve the society that I live in and have no time for people who don't. It also helps me feel that righteous anger when I suspect that "my" money is wasted which is a favourite pastime of many internet commenters including me.

Re: I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605221)

I agree. Paying taxes (and using them wisely) is a way to improve a society overall. It should however NOT be a slave tax. That is a means to get lazy people to work. It is a huamn right to be lazy.
Another example of a mechanism to "make slaves" is easy credit. As long as you are just poor but have no debt, you can thumb your nose at the man.
Once you are in debt hell, you are factually a slave.
So, taxes should not be a means to get people into debt...

Re: I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605255)

which makes me wonder. do people working and earning money for the tax office also pay taxes? if they want "more taxes" then ... maybe they should just higher more people and pay them huge salaries ... oh wait : )

Re: I'm out. Thank God (1)

lxs (131946) | about a year ago | (#44605369)

Once you are in debt hell, you are factually a slave.

And then the Man can thumb his nose at you.
Cosmic Balance restored.

Re:I'm out. Thank God (1)

Sarten-X (1102295) | about a year ago | (#44604675)

If I may paraphrase:

Way back when, I considered speculating in a monetary exchange, but now I'm realizing how many legal headaches are involved in securities trading, even in markets where none of the major investment brokers are willing to play. I'm glad I backed out before I had to deal with all of this stuff myself.

BitCoins are not special. They're legally just like any other investment, only since the big banks aren't involved, the big banks aren't there to make the traders' lives easier. There are no regulation-compliant statements, no audit records, and no breakdown of where your money went and how it came in. To properly report your income to the authorities, you'll have to track those numbers yourself. The same applies if you take an interest in speculating on any other unusual commodity, like collections or heavy equipment. Yes, technically, any gains from selling your old baseball card collection must be declared and taxed.

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44604677)

You're assuming you'd have eventually received a miner from BFL - how cute.
I noticed BFL are only accepting bitcoin or bank transfers for the new $4,680 600GH 28nm PCI miner. No Paypal = no pesky refund requests from customers

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44604787)

If Bitcoin mining were actually profitable, BFL wouldn't be selling the equipment, they're be racking it themselves and mining the bitcoins themselves.

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44604827)

So why is it that companies that sell gold mining equipment typically haven't ever bothered with gold mining?

History might teach you something, if you care to look at it closely. I'll give you the ADD version: Gold mining is very risky. Selling shovels is mundane but presents a consistent, although lower profit. Those who want consistent profits aren't also the types who want a rollercoaster ride of high profit and high losses.

Re:I'm out. Thank God (2, Insightful)

Anonymous Coward | about a year ago | (#44605007)

So why is it that companies that sell gold mining equipment typically haven't ever bothered with gold mining?

You're retarded. Plugging in a BitCoin miner requires almost no work, you only need access to electricity. Mining gold requires you to find where it's likely to be, buy/steal the land, acquire mining rights, acquire the equipment, hire workers, wait until the miners actually find something, etc. It's completely different.

Re:I'm out. Thank God (1)

indeterminator (1829904) | about a year ago | (#44605011)

Gold mining is very risky. Selling shovels is mundane but presents a consistent, although lower profit. Those who want consistent profits aren't also the types who want a rollercoaster ride of high profit and high losses.

A well-balanced portfolio would include a bit of both.

Re:I'm out. Thank God (1)

khallow (566160) | about a year ago | (#44604841)

If Bitcoin mining were more profitable than selling Bitcoin miners, then BFL wouldn't be selling the equipment. I wouldn't actually touch Bitcoin mining, but it is possible for it to make a profit and yet still be less attractive than selling the tools.

Now, I'm not going to touch Bitcoin mining (though the marginal increase in moderate electricity usage is free for me), but my point is that it can be a profitable activity and yet BFL could still be making rational and honest decisions (note: can be != is).

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605111)

>If Bitcoin mining were more profitable than selling Bitcoin miners, then BFL wouldn't be selling the equipment.

This is true, but somewhat simplified. Mining takes energy and nets you heat. BFL probably don't need to generate more heat than they're doing, but someone else might find that a usable side-effect of mining. There's also the question of cost of energy. BFL may not have access to cheap energy, whereas someone else might.

They also might prefer real money to bitcoins :-)

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605131)

They can't do that, because then they would have all the bitcoins and it would be worth 0.

Re:I'm out. Thank God (1)

cultiv8 (1660093) | about a year ago | (#44604855)

In the US, if it's less than $600 in profits, I'm sure nothing applies to you. Regarding NSA and Bitcoins, a year ago I would have modded you a troll...

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605271)

Seriously, it would take about 30 seconds to punch your Bitcoin-related info into TurboTax. Oh no, onerous gubermint regulations!

OP confirmed for overweight libertarian IT paycheck-slave.

Re:I'm out. Thank God (1)

elfprince13 (1521333) | about a year ago | (#44605279)

So what you're saying is....a year ago you didn't actually pay attention to current events? It's not like this hasn't been documentably been taking place since the warrant-less wiretapping + retroactive telecom immunity fiasco years ago (and then again with Thomas Drake's leaks).

Re:I'm out. Thank God (1)

gnasher719 (869701) | about a year ago | (#44605645)

In the US, if it's less than $600 in profits, I'm sure nothing applies to you. Regarding NSA and Bitcoins, a year ago I would have modded you a troll...

In Germany, the distinction is between professional and non-professional, and between speculative gains and non-speculative gains.

If you trade bitcoins professionally then you pay tax, but your cost is tax deductible. Whether you are doing it professionally is determined by what you are actually doing, not by what you claim you are doing. Speculative gains is simple: If you buy and sell within less than a year, that's speculative gains and is taxed. If you keep it for more than a year, that's just good luck if the value climbs, and no tax. But remember that _first_ is the determination whether you do it professionally.

Re:I'm out. Thank God (3, Informative)

Animats (122034) | about a year ago | (#44605133)

Way back when, I placed a pre-order on a small BitCoin miner from Butterfly Labs. Later they sent me an e-mail wanting to know if I wanted to continue with the order, or get a refund back to my PayPal account. I chose the refund. Thank God!

Good move. Butterfly Labs has a large number of angry customers on the Bitcoin forums. They deliver months late or not at all. The Bitcoin "difficulty" level is now increasing so fast that late hardware is unprofitable when delivered.

Re:I'm out. Thank God (1)

tftp (111690) | about a year ago | (#44605431)

The Bitcoin "difficulty" level is now increasing so fast that late hardware is unprofitable when delivered.

I am not an expert on BTC, but as I understand the miners are an essential part of the network. What happens to BTC if all miners take their hardware and unplug it? ("It was a good racket while it lasted, but not anymore.")

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605509)

The network as a whole would detect the drop in the number of miners, difficulty would plummet through the floor within a couple weeks and multicore CPU mining would become profitable again. At that point miners would probably plug their hardware back in to take advantage and the difficulty would climb back to where it is now.

Re:I'm out. Thank God (1)

Vintermann (400722) | about a year ago | (#44605181)

No doubt the NSA is tracking BitCoin transfers and users too at some level.

Well yes, but so am I. It's very easy since all transactions are public forever.

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605247)

If the IRS in Germany works in a simular way as the one in The Netherlands it should be quite easy to declare income and cost of bitcoin transactions. Tell the IRS that you are a business and they will ask you to fill in the profit/loss and balance for your company.

Re:I'm out. Thank God (0)

Anonymous Coward | about a year ago | (#44605389)

Thank God! Having to deal with all this IRS and other legal regulation shit is too much of a PITA

You make it sound as though it's compulsory to evade tax when BitCoin mining.

Re:I'm out. Thank God (2)

gnasher719 (869701) | about a year ago | (#44605631)

Dealing with the IRS is no problem in Germany. Just put it into your tax return. You say what regular income you have, what tax deductions, and what over income. So you write "Profit from trading BitCoin: 365 Euros", and that's it. One line in your tax return.

The Same Way They Know About Your Paper Money (2, Insightful)

Anonymous Coward | about a year ago | (#44604581)

Paper money and coins are just as anonymous, and we've been working with them fairly well for a thousand years.

Re:The Same Way They Know About Your Paper Money (1)

fuzzyfuzzyfungus (1223518) | about a year ago | (#44604765)

Paper money and coins are just as anonymous, and we've been working with them fairly well for a thousand years.

One difference is that physical currency tends to make moving large sums a bit awkward. It's doable, especially if nobody pats you down or you have an uninspected cargo container to work with; but the sheer inconvenience and risk discourages very large scale movements of physical currency (though, given currency's role in 'informal economy' arrangements, there are a lot of people moving small amounts of it).

Re:The Same Way They Know About Your Paper Money (2)

Immerman (2627577) | about a year ago | (#44604963)

>but the sheer inconvenience and risk discourages very large scale movements of physical currency

I disagree - it discourages medium-sized movements, but if you have truly large quantities (like say a shipping containers worth) to move then purchasing the proper customs officials, diplomats, or other well-placed individuals is probably a minor business expense.

One of the places where Bitcoin opens an interesting door is the democratization of money laundering, international purchasing, and other such realms where knowing the right people and being able to afford their services have traditionally been a gatekeeper that keeps out the riffraff.

Re:The Same Way They Know About Your Paper Money (0)

Anonymous Coward | about a year ago | (#44605651)

>but the sheer inconvenience and risk discourages very large scale movements of physical currency

I disagree - it discourages medium-sized movements, but if you have truly large quantities (like say a shipping containers worth) to move then purchasing the proper customs officials, diplomats, or other well-placed individuals is probably a minor business expense.

On a personal level, cash is quite dense. A million dollars would fit in a (heavy) suitcase, no problem. I for one do not have one million dollars. I do not even have 100,000 dollars. Or even...

The limitation is the ease of loss... if it's electronic, through a bank, then if you screw up, someone else can help you out. If you have your life savings in cash, and you drop it, it gets wet, catches fire, or is stolen, no one gives a damn.

Re:The Same Way They Know About Your Paper Money (1)

Vintermann (400722) | about a year ago | (#44605187)

No, they're more anonymous. They're homogenous and they don't smell (except literally - don't sniff your coins). Neither are true for bitcoin.

But if you have a large amount of cash, you face problems when trying to use it, unless you can explain how you got your hands on it. Same with bitcoin - except that there, there is actually a lot of public information about how you got your hands on it.

Re:The Same Way They Know About Your Paper Money (2)

Errol backfiring (1280012) | about a year ago | (#44605491)

Paper money and coins are just as anonymous, and we were working with them fairly well for a thousand years.

There, fixed that for you. It gets harder and harder by the day to use real and anonymous money. In the USA, not using a credit card is at least suspicious. In Europe, governments and large organisations make it harder and harder to pay with the real national currency. Want to park in Rotterdam? You have to pay, but real money is not accepted. There are already shops that do not accept real money. Off course, digital money does not have to exist, so banks will push as many companies as they can toward cashless systems.

Law too slow to adap to technology? (1, Interesting)

Acapulco (1289274) | about a year ago | (#44604607)

When a new story comes out about how the government has adapt the law because of some technology advancement, we can all see how slow they are achieveing anything at all. We can see this clearly with patents, copyrights, sexting and any other number of subjects.

But how about when it has to do with money and taxes? Oh boy, so now they understand perfectly?

I actually never thought governments would move this fast to regulate BitCoins. How I wish they would move this fast to address other more important things...

Re:Law too slow to adap to technology? (3, Insightful)

fuzzyfuzzyfungus (1223518) | about a year ago | (#44604821)

But how about when it has to do with money and taxes? Oh boy, so now they understand perfectly?

I actually never thought governments would move this fast to regulate BitCoins.

I suspect it helps that, while they depend on a novel mechanism for preventing duplication and double spending, BitCoins aren't really conceptually much different, once they hit the market, from the assorted oddball synthetic commodities that people (albeit generally not the general public) have been trading for years, often decades.

This means that governments are both already familiar with similar things (so they probably have applicable laws or easily adapted laws on the books) and that governments are already familiar with the tendency to concoct and sell ever more creative synthetic assets (so they are probably already used to dealing with new asset flavors popping up, and either have a system for moving quickly or sufficiently broad definitions to catch what the investment bankers have been inventing).

That's the thing: bitcoins are architecturally somewhat novel; but as a commodity that people trade with each other (especially if they trade for currency or for securities with established market values) it really doesn't bring anything fundamentally new to the table. We already have 150+ currencies in circulation, and an unknown number of stocks, bonds, futures, and more exotic derivatives. The fact that bitcoins use a different anti-counterfeiting measure doesn't really make a whole lot of difference when trying to slot them into existing regulatory structures.

Re:Law too slow to adap to technology? (2, Interesting)

Errol backfiring (1280012) | about a year ago | (#44605551)

I suspect it helps that, while they depend on a novel mechanism for preventing duplication and double spending, BitCoins aren't really conceptually much different...

There's your difference. According to Basel III, banks may spend each coin 19 times. With traceable money, a customer could ask his bank to show which coins were his. The entire Ponzi Scheme that our currency system is today could crumble if banks could all of a sudden be monitored and held responsible.

Re:Law too slow to adap to technology? (4, Insightful)

Jane Q. Public (1010737) | about a year ago | (#44604823)

"we can all see how slow they are achieveing anything at all. We can see this clearly with patents, copyrights, sexting and any other number of subjects."

Not even. Not in regard to patents and copyrights, at any rate.

The government hasn't been "moving slowly" at all. It was changes made by the government within the last 2 decades that have CAUSED the problems. Both patents and copyrights worked just fine prior to that.

(No doubt some people would argue with me about the "fine" part, but it's pretty easy to demonstrate that they worked BETTER than they do now, under the current, changed laws.)

Re:Law too slow to adap to technology? (1)

Acapulco (1289274) | about a year ago | (#44605037)

Uhmm... good point. Maybe I picked the wrong examples.

Public Notice (-1)

Anonymous Coward | about a year ago | (#44604625)

The Warwick Bunch of '29 is holding their annual summer reunion on 1 September at Palisades Park starting at noon. Bring the family.

Can you really profit from bitcoin mining? (1)

jecowa (1152159) | about a year ago | (#44604679)

Does mining bitcoins count as profit if you're spending much more money in electricity costs to run your mining rig?

yes, you can and no, it wouldn't (2)

raymorris (2726007) | about a year ago | (#44604753)

Yes, you can still turn a profit if you're using the appropriate technology and managing power cost. No, it's not a profit if the revenue is less than expenses.

However, there are other ways to make a profit that are sustainable, useful, and fulfilling. With bitcoin, you need to buy new equipment every year or so. With carpentry, for example, your equipment lasts a decade or more. With carpentry, programming or most any other business activity, you end up producing something that's actually useful and often beautiful. With bitcoin, you end up producing a number, nothing useful and certainly nothing expressive.

Tax mining discoveries? (1)

cold fjord (826450) | about a year ago | (#44604707)

I wonder if they will tax bitcoin mining discoveries? It is a means of value creation that would seem might attract attention for taxation.

On a related note, I wonder if they will try to force VAT (Value Added Tax) on bitcoin transactions?

Re:Tax mining discoveries? (1)

lxs (131946) | about a year ago | (#44605207)

You mean like they do on cash transactions? Of course. Fiscally there is no difference between Bitcoins, goats, Dollars, Euros, gold bullion or tulip bulbs.

avoiding (0)

Anonymous Coward | about a year ago | (#44604709)

avoiding taxes is your own problem, and it's only stealing from yourself, you're not always going to be rich...

It's all cats (3, Interesting)

AK Marc (707885) | about a year ago | (#44604715)

If I were to start a cat breeding business and buy/sell/trade cats as currency, making money on some, losing money on others, it's a currency. If I am stupid, I'll play dumb declare nothing, and the government will come after me eventually and measure my income against my stated non-cat income, and sentence me to Al Capone Prison. Smart is declare it a business. Write off everything I can, and count every sale as a sale of a stock or pork bellies or a cat. If it's a business, I pay taxes only on profit, not income.

These are the US rules today, bitcoin changes nothing.

Re:It's all cats (0)

Anonymous Coward | about a year ago | (#44605267)

What if you don't actually sell the bitcoins at a profit but spend them instead? Is that still taxable and how would you calculate the tax?

Re:It's all cats (1)

AK Marc (707885) | about a year ago | (#44605303)

You calculate the value on trade the same way you would if you bought stocks with cash, then traded them with someone else for a car. I don't know how it's so complex. The rules are hundreds of years old, and bitcoin fits fine. It's nothing new.

Oh, and the "simple" answer is you give the cash value at the time of the trade. If it takes 5 BC to buy a car that would have cost $10,000 in cash, then the value of the coins is $2000 each, and you treat the "trade" (for tax purposes) as if you "sold" the BC for $2000 each, then, in a separate transaction, bought the car for $10,000. Oh, and if BC aren't going for about $2000 on the open market at the time of the trade, then be prepared for an audit. Selling for an exceptionally high or low value often sets off triggers for fraud.

Re:It's all cats (1)

Anonymous Coward | about a year ago | (#44605457)

Going to be very messy if you make a profit of 1 cat and the government try to take 20% of that as tax.

Why oh why oh why (1)

able1234au (995975) | about a year ago | (#44604755)

Do we have regular bitcoin stories everytime they sneeze. I guarantee there are Bitcoin PR people planting stories here and they are goaled on how many stories they get out. It is like they are trying to make this ridiculous pseudo-currency scam into something real. Nothing to see here folks, just ignore bitcoin and it will go away.

Re:Why oh why oh why (3, Insightful)

Jeremi (14640) | about a year ago | (#44605119)

Do we have regular bitcoin stories everytime they sneeze. I guarantee there are Bitcoin PR people planting stories here and they are goaled on how many stories they get out.

There's no need to invoke a conspiracy. The fact is that BitCoin is catnip to several common type of nerd -- the wannabe cypherpunks who like to see computers change the world, and the libertarians who want to see the centralized government control marginalized in favor of individuals. Not to mention the programmer nerds (like myself) who are simply impressed by BitCoin as a p2p software design that has managed to avoid catastrophic implosion (so far) despite the obvious monetary incentive for people to attack it.

So yes, there are a lot of BitCoin stories on Slashdots, simply because many nerds find BitCoin interesting.

Re:Why oh why oh why (1)

able1234au (995975) | about a year ago | (#44605169)

I am sure these stories are planted by either bitcoin people directly or those who have lots of money invested in bitcoin and are trying to flog that dead horse.

Re:Why oh why oh why (1)

Vintermann (400722) | about a year ago | (#44605205)

I guarantee there are Bitcoin PR people planting stories here and they are goaled on how many stories they get out.

Heh, that's not how it works. How it works is that a lot of people bought bitcoin not to use as currency, but to use as speculation object. They expect it to rise in value, and plan to sell when it does.

Since there is a finite supply of bitcoin, if more people want it, it's going to increase in value. So anyone holding bitcoin has an interest in pushing it. No goaling necessary.

This deflationary structure is inherently bubble-prone. Any event that causes a hit to the bitcoin price risks sending it into a super-fast downward spiral, as holders realize that it will be a long time (if ever) that they can get as much for it as they can now.

Re:Why oh why oh why (1)

able1234au (995975) | about a year ago | (#44605233)

agree this is what is happening. it is a false market, with the only real demand for the currency from drug dealers and criminals as well as speculators. Once the authorities close off the ability of drug dealers and criminals to use the currency then the demand will crash.

Does bitcoin matter anymore? (0)

Adult film producer (866485) | about a year ago | (#44604759)

Creation of bitcoin is no longer feasible for the average person. The investment in the basic hardware is beyond them. Is the average joe working in a 9 to 5 or killing themselves in a coal mine really going to care about a virtual currency?

Re:Does bitcoin matter anymore? (0)

Anonymous Coward | about a year ago | (#44604927)

Allow me to break down your fail:
1) You can buy USB sticks which can mine Bitcoin relatively efficiently.
2) Claiming that a person must be a miner to benefit from Bitcoin is like claiming that a person must operate their own e-mail server to benefit from e-mail.
3) Perhaps the average Joe won't care about digital currency, but he might care a tiny bit about paying a little bit less for food and gasoline which is enough to make entrepreneurs care about Bitcoin.

I.e. Barter? (1)

edelbrp (62429) | about a year ago | (#44604865)

Isn't this just a declaration of barter? Like trading chickens for other goods/services?

Monday Bad For Obama (-1)

Anonymous Coward | about a year ago | (#44604885)

Mr. Obama and his illegal IRS were about to declare Bitcoins the property of ... Obama ... of course fool.

Too Bad.

Mr. Obama is a douche bag again. Dang.

Bang Ding Ou
Bang Ding Ou

Ho Lee Fuk
Ho Lee Fuk

Exchange rate (0)

Anonymous Coward | about a year ago | (#44604947)

Even if people would declare their profits, those profits would be in Bitcoins. How do they plan to convert this to Euro? Are the official exchange rates for it?

Re:Exchange rate (1)

Golden Section (961595) | about a year ago | (#44605195)

The are exchange rates for Bitcoin. You can buy or sell at e.g. https://www.mtgox.com/ [mtgox.com]

Re:Exchange rate (0)

Anonymous Coward | about a year ago | (#44605243)

And these are "official"?

Re:Exchange rate (-1)

Anonymous Coward | about a year ago | (#44605231)

Just pay your fucking taxes shithead. We can't go on bailing out your freeloading ass forever.

The thrill is gone. The goose is dead (0)

Anonymous Coward | about a year ago | (#44605059)

Too bad the governments had to stick their greedy fingers in so soon. They should of let it run for another 10 years, and some kinda new wild economy would have developed. Sorta like when the real gangsters created the business model, setup and ran Vegas. THEN the Wall Street Banksters took over and it got all respectable and boring and disneyfied.

To butcher a metaphor, they killed this goose before it even laid the FIRST golden egg.

Meh.

A few dope peddlars selling mail order pot. That's not innovative, Amazon has already done that business model.

Too bad. Who knew what coulda been. Note that nobody here is bitching about lost revenue, cause bitcoin finally was almost stable enough for a lot of us to get in there an start developing the next 'Social Media' or 'Search Engine'.

Hackers need some room to play, dammit. Back the fuck off already. Killed the cloud. Killed the digital money economy. The NSA. The gift that keeps on fucking up and killing business.

And whatever new idea would have come up, the stupid bankster schmucks at Wall Street coulda pyramided that up and made another dot com boom. Ya, Mr. Broker. Say good bye to that new Porsche and the Stripper Girlfriend. They just killed you next big score too.

But this kid, in his mother's basement is gonna turn his computer off now, nothing is gonna come of it, no fat windfall profits for first guys to stake a claim. Because Visa or Wells Fargo got their panties in a bunch over lost transaction fees, or somebody MIGHT send some grocery money to the folks back in Iraq or Syria or Palestine.

The dream was aborted before it was born. . Yeh. I'm pissed. Fuck you USA.

Excelent. (3, Insightful)

VortexCortex (1117377) | about a year ago | (#44605091)

So, if one's bitcoins are considered "Private Money" and instead of a profit, I take a huge loss, but my state sanctioned currency is in abundance, then I can sum the two values and pay little to no taxes.

I'll take it!

Re:Excelent. (1)

Vintermann (400722) | about a year ago | (#44605213)

Little to no capital gains tax, and little or no wealth tax. It won't help your income tax at all.

But do you really want that anyway? You have to actually lose money and be able to document it in order to get the pity tax rebate. Isn't it better to not lose the money?

The Bitcoin slimeball problem (3, Insightful)

Animats (122034) | about a year ago | (#44605189)

Bitcoin would be useful if it weren't such a slimeball magnet. The basic feature of Bitcoins is irrevocable unidirectional funds transfer between anonymous remote parties. This is the scammer's dream. Scammers don't have to worry too much about the marks coming after them with cops or baseball bats. So just about every financial scheme known has been tried in the tiny Bitcoin world in the last two years.

Even the "legitimate" Bitcoin companies are flakes. Most of the "online wallet" companies turned out to be scams. Several of the "exchanges" turned out to be scams. The previous market leader, Mt. Gox, stopped paying out on US dollar withdrawals two months ago. (Whether they're broke, incompetent, or persecuted is a subject of active debate. They claim problems with their banking relationships that prevent withdrawals, but continue to accept deposits.)

Bitcoin could have been a useful petty cash system for the Internet. If you could buy song downloads or MMORPG game items with it, it would be convenient and widely used. But that's not happening. You can buy WordPress hosted blog upgrades with Bitcoins, but that's about the most mainstream thing you can do.

How many Bitcoin stories? (1)

Anonymous Coward | about a year ago | (#44605359)

How many fucking Bitcoin stories do we have to read?

"The Cook Islands have declared that they are considering the legal status of Bitcoin"

"Senior government official admits to buying a pair of pants using Bitcoin"

"Bitcoin value decreases by 3% - is this the beginning of the end?"

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