New US Virtual Currency Tax Fairness Act Will Help Bitcoin As Electronic Cash
US Senators Patrick Toomey (R-Pa) and Kyrsten Sinema (D-Ariz) have teamed up to introduce a bill that would exempt digital currency transactions of less than $50 from taxes. The exception will also apply to trades where the user earns less than $50.
As things stand, all transactions must be tracked and taxes must be paid every time digital currencies change hands. The Virtual Currency Tax Fairness Act, if passed into law, would exempt transactions of less than $50 and allow Bitcoin to be used for its original purpose; small random transactions, as outlined in the White Paper.
Recognizing the potential for Bitcoin and digital currencies to be used in everyday life, Toomey said, “While digital currencies have the potential to become a regular part of Americans’ everyday lives, our current tax code stands in the way.” It’s a sharp observation by a senator who had shown that he understands the true purpose Satoshi Nakamoto had in mind when he created Bitcoin. Toomey has promised to do everything he can to help the digital currency industry before he retires at the end of this session.
How likely is the Virtual Currencies Tax Fairness Act to become law? It is not likely to happen in 2022 as the cost of living crisis and mid-term elections take priority. However, there is optimism that it or something similar could pass in early 2023.
Bitcoin was always peer-to-peer electronic cash
In the early days of Bitcoin, it was accepted at face value that Bitcoin was peer-to-peer electronic cash and that its purpose was to facilitate small, random transactions that were prohibited by the cost of running a financial system dependent on trusted intermediaries. .
The reason why this was widely accepted is that it is written in black and white in the Bitcoin White Paper. But somewhere along the way, new entrants to the digital currency markets stopped reading Bitcoin’s founding document, and a mass social engineering campaign by the likes of the Digital Currency Group made public opinion view Bitcoin as a savings technology or digital gold. Furthermore, changes to Bitcoin’s code by BTC Core developers made the microtransactions it was able to perform unviable as transaction fees skyrocketed.
Of course, money blinds the best of people, and with BTC’s meteoric rise and the overnight millionaires it created left, right and centre, few were motivated to look back at the white paper and the early writings of Nakamoto to find out what Bitcoin really is.
Fortunately, not everyone has drunk the Kool-Aid. Entrepreneurs like Calvin Ayre, Stefan Matthews and Bitcoin’s inventor Dr. Craig Wright stood firm and refused to let the original Bitcoin die. Unlike the others, they didn’t sell out and instead invested huge amounts of time and money into reviving the original Bitcoin protocol and making it work as electronic cash. It exists today as Bitcoin SV.
If Bitcoin is to become the global peer-to-peer electronic cash system that Satoshi envisioned, laws that make it possible to trade in small amounts without having to record and report everything will help a lot. The Virtual Currency Tax Fairness Act would be a step in the right direction.
See: BSV Global Blockchain Convention panel, The Future World with Blockchain
New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – originally envisioned by Satoshi Nakamoto – and blockchain.
