Charles Hoskinson just released this video revealing a tool we might be able to use to disrupt ties between the United States government and the Federal Reserve.
Here is the tool. It’s a document.
A lot of people think that the Federal Reserve is part of the US Government.
Actually, the Federal Reserve is just a bunch of big banks that control the US government.
The Federal Reserve his using the US Government to destroy crypto because they want control of all money. More about that here.
Charles is recommending we send this document to our representatives in Congress and the Senate and that’s a good idea. We should do that.
But how about we also make the complex adaptive system which emerges from our government feel enough pain to question it’s association with the Federal Reserve? How about we apply enough pain to make this creature let go of crypto and start working with our community instead.
How about we apply a choke point of our own?
So the document says that our government is trying to destroy crypto but the government also wants us to pay taxes on our crypto.
I have always paid my taxes on my crypto holdings and will continue to do so but now I am wondering…
How can the government legally collect taxes on the value of a citizens property when the government is actively working to destroy the value of that property.
I think that might make an interesting class action lawsuit.
The small and regional banking industry may be our allies in this action.
I am not knowledgeable enough about the legal system. However, it seems to me that the Govt would argue the following:
- Property rights are not absolute. Government has a role and has the ability to override certain property rights. For example, Government can compulsorily acquire land owned by individuals in order to build public infrastructure. Though, when it does this it has to compensate the previous owners.
- Property rights often compete with each other and with other human rights and Government has a role in regulating and passing laws that enshrine policy surrounding such competing rights. One simplistic argument the government could make here is that by attacking crypto it is protecting the property rights of the much larger more traditional part of the economy related to the fiat banking system - the debt based economy.
Thinking more broadly, the old financial system has these fundamentally different features:
- Centralised trust, users have no choice but to trust the banks
- Opaque (users are unable to check the entire ledger and nobody knows the total supply)
- Ledger settlement practices are not atomic (ledger transactions are rolled-up and often settled days later, and in many cases transactions are reversed)
- Money is debt based, so really banks are tallying and exchanging debts. IE: Not barer assets.
- Capacity for individual actors to manipulate the governing rules
Crypto is different. It is faster, provides immutable atomic exchange of barer assets, is open and trustless (no trust in centralised authority), everyone can check the entire ledger, and nobody can unilaterally alter protocol rules.
These features, combined with the fast paced access to information and social networks that the internet has enabled, appears to make crypto incompatible with the old fractional reserve baking system. We are now seeing problems with the old system getting exposed recently, where social media messages induced a bank run and this combined with the nature of fractional reserve banking quickly caused the bank to be rendered insolvent. Integrating crypto with traditional finance will allow crypto to get much bigger and expose more incompatible features.
I can’t see how this circle gets squared without significant disruption. We are definitely not going back to the world of the horse and cart. People cannot unsee the benefits of this crypto technology now.
Thanks for your comments @Terminada,
Guess I need to ask a lawyer that handles these types of cases.
I’ll report back here as I learn more.
The idea that something can be destroyed by the government and taxed has also been actively developed in India since 2018, when India’s own Reserve Bank (RBI) placed a “ban” on cryptocurrencies with no means of enforcing it.
Fast forward 4 years and the latest policy from 2022 (still in force today) is that crypto should be taxed like gambling: definitely not something you would do for a medium of exchange or any valued part of the economy. This article, probably not the best on the subject, is a starting point into that shenanigan:
I do agree that nothing but a sick and bloated government in any country would impose these kinds of restrictions on economic growth and technological development, and therefore any legal means of dismissing these obnoxious regulatory bodies should be actively pursued.
I spoke with a lawyer at a prominent law firm.
The lawyer agreed that I doesn’t make sense that the government would collect taxes on gains for an asset they are trying to destroy but didn’t appear too interested at the moment in turning it into a class action lawsuit. So I asked for the name of a law firm that might be interested in pursuing the matter. The lawyer ask for time to think about the whole thing.
I figure I will give it a few days before looking for another law firm to investigate the possibility of a class action lawsuit.