Receive all Cointelegraph news immediately in Telegram.
Expert wants Bitcoin encrypted for investors in AML/KYC startups to lose their investments.
One of the biggest development hurdles that Bitcoin expert and entrepreneur Trace Mayer wants the digital currency to overcome in 2017, in order for it to progress to the next stage, is for Bitcoin to go dark so as to become more expensive.
Mayer says in an interview with CrushTheStreet:
“I would like to see Bitcoin become encrypted so that all the investors (in those AML/KYC startups) basically lose their investments and Bitcoin goes dark. And then we have no idea what is going on fundamentally with Bitcoin and it just begins corrosively eating away at all legitimately feasible economies. In that way, we can make it much more expensive to stay in those economies and that would further incentivize the economic producers to move into the Bitcoin economy, which will hopefully bring the Bitcoin price up.”
He also wants the activation of SegWit, with its associated features such as coin swap and confidential transactions, which he says has been necessitated by the overly broad data being requested from Coinbase users by the Internal Revenue Service (IRS).
The IRS requires of Coinbase the complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods and any other information related to the funding sources for the account/wallet/vault, regardless of date.
Mayer says that the move will discourage the use of KYC/AML-approved exchanges and drive behaviors that the revenue collector does not necessarily want. “Right now, Bitcoin is very transparent and is very easy to track, like where the Bitcoins went and who did what,” he says. “But you start bringing in the IRS and threatening people with the tax hub and guess what happens? All of a sudden you see these technological solutions that make it cheaper and also make it more private.”
“Right now, you can see the Bitcoin economy; why do you want to give a further incentive to make the economy go dark?” asked Mayer. “From a technical perspective, like encrypting the Blockchain as a whole, and it’s going to be cheaper because we’ll pay fewer fees. So not only is it going to go dark and be encrypted, you’re also going to be financially incentivized to do that. The IRS came out with the John Doe summons because they are targeting every Bitcoin user; they are not targeting a specific Bitcoiner. They are targeting all Bitcoin users. That’s very problematic.”
Mayer assumes that the IRS is trying to see what the overall usage pattern of Bitcoin is as a means to observe how people use it, as Coinbase has a lot of merchant data. Mayer also compared the John Doe summons to a fishing expedition.
“For me, personally, I don’t really care because I try my best to account properly for any gains and losses that I had and appropriately pay all the taxes that are due,” he added. “But for your average Bitcoin user, I just don’t understand what the IRS is trying to accomplish. It just seems like they are going to spend a lot of time and effort.”
In conclusion, Mayer suggested that what they should do is just try to go in and talk with some of the companies and users, and attempt to develop a feasible way to tax such individuals.
Follow us on Facebook
For updates and exclusive offers, enter your e-mail below.
Thank you for contacting us! We will reply to you as soon as possible.
Thank you for your interest in our franchise program.
We are considering your request and will contact you in due course. If you have any further queries, please contact: