> Polis said the state is getting a payment provider to accept crypto equivalent and deposit the money into the state’s treasury for that amount.
Colorado won’t be accepting bitcoin. They will be accepting dollars from a payment processor that accepts bitcoin.
Your tax bill will still be in dollars, and at the end of the day you will be responsible for ensuring that the correct number of dollars ends up in state coffers.
This is the same as saying that Colorado will now be accepting Canadian Dollars and Peruvian Soles because I can use a foreign denominated credit card with their cc processor.
“In Colorado, we’ve been laying the groundwork to be a center of crypto and blockchain innovation for a number of years. We see it as a critical part of Colorado’s overall innovation ecosystem,” shared Polis.
If the governor is serious about this he will push to remove the tax, as some countries have. It'll be hard to be the center of crypto innovation while taxing transactions.
At most the governor could (with the help of the legislature) remove Colorado state taxes. He can’t do anything about federal taxes which would probably be the biggest concern for most people.
This is true and an important point. A state accepting anything in lieu of its own currency is basically adopting another currency.
That said, "you can now use crypto for X" is kind of news. The principle of "can do X with Crypto" may be established, but the practice isn't. Bigger news would be Y% of colorado residents pay tax with crypto.
Seriously though, a state announcement on Facebook reposted in a tabloid style website without any of the pertinent information, like what currencies are being considered, perfectly sums up the problems with information technology. I should be reading www.colorado.gov
As for the crypto, this seems like a nice way for the state to collect and keep tabs on cash flow. So good on them for being smart I guess. Is it actually easier for people? No. But a lot of people did get sucked into this crypto thing, so you move where the money is.
It doesn't sun up the problem with IT, it sums up the problem with bias in media.
Why do you think this article both misrepresents the situation, omits mentioning federal tax implications of paying in this manner, and is not on a Colorado government site? Cui bono?
The answer is: 'Because this is a submarine article targeted at crypto shills, by crypto shills.'
Perhaps a stealthy way to identify who's under-reporting their gains? If your payment comes in through crypto it gets flagged for extra scrutiny, so if they don't see a sufficient reporting of where the crypto came from, they prioritize you for an audit.
Fun theory: the only reason the USD has intrinsic value is because it is required for paying taxes for anyone living or doing business in the United States. It puts a legally-mandated floor on the demand for the dollar and provides the assurance that whatever happens in the world, as long as the US government is still standing and the US is an important place to do business, there will be demand for dollars.
If the federal government ever allows other forms of payment for taxes, the USD would be able go to zero as easily as any crypto can today.
Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction.
If you steal Bitcoin and use it to pay your Colorado state taxes, you remain liable (1) to the government for your theft, and (2) to the person you stole from for "conversion" of their Bitcoin. The first is a criminal issue (government comes after you); the second is a civil one (person comes after you). But Colorado's revenue agency doesn't care; they got paid and they get to keep it.
If you make up a fake credit-card number and use it to pay your Colorado state taxes, then the bank will eventually figure out what happened and reverse the transaction. Then the Colorado Department of Revenue will come after you for unpaid taxes (as well as for other misdeeds you have committed).
Note that Colorado isn't receiving Bitcoin directly, but rather is using a digital-currency payment processor. That company might decide to reverse iffy transactions. The problem is that the company can't reverse the Bitcoin transaction. They might decide, as part of their business model, to absorb the costs of fraudulent/illegal transactions and pass the (negative) savings onto the customer through fees. But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own.
> Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction.
Unlike cash, but like any other stolen asset, if you unknowingly receive stolen bitcoin, you could still be legally required to return those bitcoins to the original owner.
> But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own.
If "they" is a court, they absolutely can command you to take cash out of your pocket or to reverse a transaction you received.
The difference is that they aren’t involved: remember how one of the selling points for cryptocurrency is that there’s no recourse for fraud built in to the system? If someone pays the state of Colorado with a credit card without the owner’s consent, the state of Colorado has to eat the chargeback cost and other expenses for that transaction.
If someone uses Bitcoin, all they have to do is tell the victim “code is law, try suing them”. The appeal is obvious.
That’s the point: if you use a credit card, the tax agency gets the chargeback cost immediately and they’re always paying an overhead fee based on that risk (low but non-zero). With cryptocurrency, that cost is shifted to the victims and other departments and they don’t have to give the money back until a judge orders it.
Probably yes, but unlike a credit/debit card or a check, there's no administrative process to do so. Which means you'd need to go through courts and the expense of courts will dissuade many from filing claims.
It affects processing overhead rates. Even if you have a very low rate of returns you are paying the bank for the possibility that this would happen, so I can easily understand someone looking at a charge which adds up to n million dollars a year and thinking it’s worth saving.
Imagine if the government had a public receivable account for each line item in the budget that you could voluntarily pay into, and make it count 75% (or titratable percentage) as regular tax payment.
I would speculate that it's that Colorado wants to build up its tech industry, and a bunch of people in charge believe that things like this will help project an image that attracts investment.
The actual impact on US currency valuation will be negligible. Even if it weren't, I believe a large portion of Colorado's economy is based on producing export goods, so a weaker USD is theoretically beneficial to at least some segments of the state's economy.
Probably, but, if my hypothesis about what this is really about (that is, it's a PR stunt that's more about saying they taking BTC payments than actually taking BTC payments) is true, then they could theoretically accomplish their intended outcome without ever actually taking a single BTC payment.
Arguably, the fact that we're sitting here chatting about Colorado on hacker news indicates that the alleged plan has already succeeded, months before the system is scheduled to come online.
Sorry, I perhaps didn't indicate clearly enough that it was a wild guess. I know raw material extraction is a major part of the economy in the corner of the state where my family lives, but I have no idea of actual numbers.
I was also not trying to suggest that it's "export focused" - that would imply that that's a dominant factor in the economy, which is not what I intended to say. I chose the word "large", not to imply that it's a majority, but to imply there's enough money tied to it to make it politically interesting to the elected officials who are driving these sorts of decisions. See, for example, how coal played into the 2016 US elections, despite the US economy not being anything close to "coal focused".
I agree that there is a significant resource extraction sector, though primarily based around energy as opposed to raw materials. I have my doubts that it’s significant enough that the state could materially benefit from a weakened USD.
It would be nice to find a percentage-based chart which breaks down economic sectors for the state. It exists somewhere, no doubt, but I am unable to find it this morning.
I do agree with your first point: crypto-for-taxes is primarily a headline generating gimmick. One that sells Colorado as a state with tech-savvy leadership.
You mean by unprecedented money printing? That's how they weakened the currency in real terms.
“In Colorado, we’ve been laying the groundwork to be a center of crypto and blockchain innovation for a number of years. We see it as a critical part of Colorado’s overall innovation ecosystem,” shared Polis.
This is what the US needs to embrace as a whole, otherwise we won't be competitive with the countries that do as the US dollar (petrodollar) loses its primacy on the global stage.
Exactly, a very arrogant and short sighted comment.
Though one I would expect in a thread about crypto currency. I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy.
It's just a technology and for all we know, some larger distrust may arise in governments that leads to people using crypto more and although a very small chance, bitcoin may become the most commonly used currency. My point being, we just don't know and cannot predict these things.
Not really, cryptocurrency seems to be dying off for exactly the reasons I assumed they would.
The original point was for small and ultra low overhead transactions, not as a way to make money. I am not saying the price is hitting 0 in 6 months or even 6 years, but clearly the original goal failed, interest is going away, and no use case has replaced it.
So you don’t actually link to the evidence showing the number of crypto coin companies increasing, and you even quote a different number includes NFT’s and other non crypto coin companies.
That graphics shows 22 billion in cryptocurrency investments and 4 billion in NFT investments.
You keep saying it's going down and you still haven't given any evidence of that or explained why you think that. Saying the same thing over and over more forcefully is not evidence.
What is asserted without evidence can be dismissed without evidence.
I clearly said one of the reasons was the number of crypto coin startups had gone down. I got several responses in terms of investments which is really evidence of it’s own sort.
Of note, I didn’t refer to the ROI from holding coins which is way down. I suggest it take a second and consider why I didn’t make that argument.
So, I shifted goal posts by saying the exact same thing repeatedly. While you really want to quote an irrelevant statistic even after acknowledging it’s irrelevant.
Wow, that’s just perfect. Do you mind if I share this thread?
This is your claim with no evidence, no source and no explanation.
This could not possibly be more ridiculous. Any search you do produces an avalanche of links that directly contradict what you are saying.
Your sources of absolutely nothing are not very convincing.
Is this a joke? This is like someone getting soaked in a flash flood while claiming it isn't raining. I've never seen anyone deny reality this hard, even here.
And more links to hype and monetary amounts invested in startups most of which aren’t even crypto coins startups that where funded in 2021, or gasp 2022. If you’re spending that much effort and not actually comparing the number of new coin startups let alone my other points, I am in awe of your tenacity if nothing else. Good luck, your going to need it.
Anyway, this is public so I can always just link to it.
This is what you said. Stop pretending you didn't say this and give some evidence.
The New York Times article alone says:
Investors, too, have flooded in. They have poured more than $28 billion into global crypto and blockchain start-ups this year, four times the total in 2020, according to PitchBook, a firm that tracks private investments. More than $3 billion has gone into NFT companies alone.
More than 28 billion dollars into start ups in one year.
Anyway, this is public so I can always just link to it.
Oh yeah? Twelve comments deep and you're now threatening to maybe actually link some evidence (in the future)?.
How is this not embarrassing to you? Do you try to convince people the sky is red and the earth is flat?
Why do you keep replying without evidence? Because it doesn't exist. If it did, you would have linked it already.
> I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy
Yes the only reason someone can make this comment is because they’re jealous of all the money they missed out on.
By the way, the word you’re looking for is envy, not jealousy smh.
My theory is that U.S. and other governments recognize that digital currency will eventually be necessary.
Rather than expend the resources to develop it themselves, they are giving the crypto community enough space to do the R&D for them. Once the technology evolves to a point that it is both secure and practical, the governments will implement their own digital iterations of their respective currencies.
Digital currency is already necessary, and is also already here.
Taking myself as an example, of all the actual money I currently own (so, not counting securities and whatnot, just cash and bank account balances), approximately 99.5% of it is currently digital and 0.5% of it is analog. And 100% of that is US dollars. And I'm unusually heavily invested in portraits of Andrew Jackson right now; it's typically more like 99.9% digital.
At present, I'm quite happy with USD for my digital currency needs because it offers me greater convenience and lower transaction fees than the available alternatives. One particularly compelling feature is that it's easily convertible to physical currency (and always at a nice, predictable 1:1 exchange rate), which remains the only game in town when I want to make a truly anonymous transaction. For example, when I give money to a pahnandler, I really don't want there to be any paper trail that the person I'm giving money to can possibly trace back to me.
Digital currency already exists, but with the much less sexy name of "bank accounts", "checks", "debit cards", and "wire transfers". The only thing that cryptocurrencies bring to the table is trustlessness, but that is what introduces the inefficiencies of cryptocurrencies, and prevents useful features such as reversible transactions in the case of fraud.
I think GP is merely referring to the idea not that Crypto Currencies AGMI, but that the Fed/Gov are allowing it all the happen so the research/investment is made to get the technology to the point that a PoST/PoS/(Solana|Cardano|Etherum|etc.) system exists as a reference point to create "FedCoin" featuring centralized control by the fed, but decentralized and trustless processing beyond that.
A system that is powered by crypto making payments and etc basically free, but with the ability to reverse fraud transactions or similar. They have their own goals/constraints that are different than crypto currencies today. Another comment refers to a universal API; even if the API is JUST for settlement between banks it would probably make things way simpler, cheaper, and more efficient.
edit: typo, added universal api comment agreeing with comments from kasey_junk
This was my position until very recently as well but I’ve recently been convinced otherwise.
The trust stuff is actually the least interesting part (though perhaps a prerequisite for it).
The interesting part is the potential for a “universal” api. Instead of having to integrate with every financial institution to support the myriad payment methods out there you can support the crypto currency. That’s a big deal.
It’s not what the crypto libertarians are pitching and I still believe that governmental currency controls will always be a thing but standardizing the actual mechanics of money movement would be huge.
>>The interesting part is the potential for a “universal” api.
This is true both at the application level and the software standards level. An example of the first would be Uniswap. Any one in the world can access this exchange, both for listing tokens, and for trading them, and it is guaranteed to never shut down, as long as the Ethereum network and blockchain exists. This is absolute universality in terms of APIs.
In terms of software standards, the EVM is already used by multiple blockchains, which makes them all share the same address format out of the box, and compatible with software like MetaMask that has tens of millions of installations. I could send Ethereum tokens to your Polygon (an EVM based chain) address, and you would be able to use your Polygon Chain private key to access them. All that you would be required to do is go to MetaMask and switch your network from Polygon to Ethereum mainnet, and the tokens would be appear in your wallet interface.
>>It’s not what the crypto libertarians are pitching and I still believe that governmental currency controls
Government currency controls cannot be a thing any more. Monetary transactions dependent solely on cryptographic authentication, and published to a completely decentralized and immutable platform, totally unmoors money from the types of bottlenecks that state actors could use to control its flows. To control currency requires controlling the flow of information now, and with the universal adoption of the internet, that is not happening.
At least in the US, I'm of the opinion that the government leaning into "stablecoins", and letting private industry launch several different versions of these is the best path forward (and most likely path).
Some politicians secured campaign contributions from the crypto lobby, that's all. I didn't see details on how much extra it'll cost compared to paying with a check/ACH.
Colorado won’t be accepting bitcoin. They will be accepting dollars from a payment processor that accepts bitcoin.
Your tax bill will still be in dollars, and at the end of the day you will be responsible for ensuring that the correct number of dollars ends up in state coffers.
This is the same as saying that Colorado will now be accepting Canadian Dollars and Peruvian Soles because I can use a foreign denominated credit card with their cc processor.