I’m speaking only in the abstract. In practice, the controlling ideologues in Bitcoin as we know it today are very defensive against their protocol, they want everything practical to be built elsewhere.
In the abstract sense, Bitcoin could be technologically dominant had it not lost so much development talent to altcoin projects. It could have a zero-knowledge proofed base layer and-or a ton of additional layer-2 applications… for example
you are taking the “store of value” part of the equation for granted. It’s why governments control money. They do get it. and we need someone who gets it.
It’s a protection from money printing; digital gold. Not meant to replace money. It would not surprise me in the least if it was created by the fed or a government or if governments were some of its largest owners.
I hope so…Right now the best way to help the most people to transact privately is to have a centralized stablecoin USDz. Can the blockchain handle the volume? Instant transaction times are needed. We already know people will pay 1% for instant rather than waiting 2-3 days. Example, Uber drivers get this option and accept a 1% charge for instant payments. Stripe incorporates this option into its Connect platform (people want instant and will pay for it). ZEC wallets should do same using AMP or figuring it out so its built into ZEC. USDz would then pay a fee to ZEC for the blockchain and use ZEC (or USDz that gets converted to ZEC on backend) as gas to pay for dev and zec holders. Then it starts to become a platform where ZEC has intrinsic value as the network effects take hold.
If its regarding a stablecoin. At least the way I am thinking about it. It seems like the wallet starts to look a lot like a bank. And Zec stablecoin starts to look like a combination of cash and a money market (if its backed by treasury bills and some % of interest is flowed through to holders). So that might be the best model. EG the same way interest on a money market account is taxed. But then again, I have no idea what the specifications look like for the stablecoin. The wallet would probably have to let the user know how much interest income they earned and do the tax part; not ZEC.
In America the tax rules are fairly simple. You acquire an asset for a price point X, wait some duration of time Y, then sell your asset for price point Z.
Depending on duration Y, you’ll pay a short term or long term tax rate.
The difference between price point X and Z also determines which rate of tax you owe… for example if the result is negative you owe nothing.
What about airdrops? Staking? NFT’s ? Mining? Ordinary income (and/or) capital gains ? When and how do these apply. If BTC/ZEC is money, why is it treated like a stock for taxes? Does where I live change the calculus? This is not simple Folks make livings finding loop holes… this should say everything you need to know.
Its all the same, in USA they dont really care where your asset came from or what it may have cost or not. If you received coins as an airdrop then your cost basis is $0.00, same with mining, staking, or NFTs.
Your tax professional (or you) may opt to try and derive cost basis different when reporting… lets suppose you mine one bitcoin in the year, using a $5,000 piece of hardware bought that year and you had a dedicated electrical supply. You could subtract your $5,000 and electricity costs against the value of the coin prior to selling it.
In general, how you assemble your asset’s cost basis is at your tax professional (or your) discretion and if you attempt to use a lot of smoke and mirrors you may increase your risk of audit and all of the follow-up efforts involved there, to convince the IRS that you reported fairly and in your best good-faith effort.
What many American crypto people want to believe is that Staking or Mining is somehow different and deserving of a new chapter of rules… that is wishful thinking, its a reflection of their biases.
airdrops by themselves are largely marketing scams if inflationary. but if it’s based on transaction fees it could be good.
staking - I’m not a tech person. but from what i understand it needs to be supported by transaction fees and that makes a lot of sense.
NFTs - interesting for real world assets like what centrifuge and others are doing.
Mining - someone has to process the blocks. staking or mining is not optional is it?
Taxes - they are trying to work this out. i think BTC is a commodity and not a stock. I’m not sure what Zec is yet. it likely a commodity and hopefully more like ETH for the blockchain of money
If you are a person who wants private stable money. money that will capture and retain the value of your labor, i think the calculus is the same- you would want a Zstablecoin. i don’t see how it’s possible for zec to offer the stability, reliability, and trust people need from money. Some of these ideas would cause a currency to collapse if implemented in society. And a weak currency isn’t good for anyone. And we know governments have tried to implement some of the ideas and it’s failed miserably; especially for their citizens. let’s not do the same to ZEC. 21m cap at least protects us.
Again, its up to you or your tax professional’s discretion. I’ve been advised that if I didn’t pay for the airdrop then its a $0.00 cost basis. Claiming a much higher cost basis (such as the coin airdrop value at inception) would misrepresent what the asset actually cost me.
The issue would be does it hurt or benefit ZEC holders. more supply hurts and less supply helps. we are not arguing to reduce the supply even though that would benefit ZEC all else equal. But it would hurt dev funding in that scenario and we don’t want that.
The hypocrisy is coming from you. Claiming zec is money, arguing for more coins, and then arguing to fork. what about all those small store owners accepting zcash as money you claim to care about? are they just roadkill on your journey to save the world ?
wrt zechub, i just copied ethhub’s design because it was MIT and I thought the idea was cool. there was no direct collaboration with anyone from the ethereum community.
What you describe, and seem to prefer, already exists – its called BTC. What is your vision for ZEC, in regards to your view of some social contract? It seems you prefer a FIAT world and I’m not convinced this is what’s best for the world ( because it indirectly gives too much control to the US – lets be honest. )
Bitcoin is not private. I am describing something completely different. And again, I am not a tech person so my jargon might not be correct. But hopefully you will get the idea.
L1 blockchain - private, secure fast transactions
L2 assets - ZEC is the only one currently. It is basically private bitcoin and we could probably add more features to make it better in other ways. This is for long term savings to fight inflation an protect from government over reach. It is the insurance policy. By its very nature, given no collateral and 21M cap, it will trade like a commodity. But over time, if developers add the features people want and the culture and governance is good. It might become something people can trust. It is not a good way to transaction on a day to day basis because it will be impossible to get rid of the volatility on a daily, weekly, monthly or yearly basis. Just watch how gold trades. It can go in 20-30 year bull or bear cycles. And the only support it really has is from governments and people who think the world is going to end. Even if you could digitize gold, it would not be good for day to day transactions. People need money that will be worth 100% tomorrow the same as today. And that will never happen with ZEC or BTC, or Monero or any of the other ones. This is the nice shiny object people see at the moment. Now if you could have ZEC be used as gas for all L2 transactions, its starts to have fundamental value. So applying the technology to a stablecoin could really unlock the value of ZEC. And it does what you say you want to do - privacy. I think what is hidden in your privacy belief is really anti society. Or anti some government.
L2 USDz - This is the only viable option to provide secure, stable, private money for US Citizens and most countries who also choose USD even over their local currency. Yes. Its that good, its that trustworthly, its that stable. It is the foundation that can offer people the predictability they need in day to day transactions. So when I go to work and earn $1,000. I know I can spend $1,000. And its very important for people to have this stability over very short timeframes. Especially the people making low wages and incomes. As I said before, if anyone should understand the importance of stable money, its the ECC, the foundation, ZEC holders, and the people who actually accept ZEC as a payment for goods and services.
There it is! I have to admit. I love that you admitted this because its the under tone from many people who claim to want privacy. They really dont care much about privacy or ZEC value as they do about their political agenda. And if ZEC goes to 0, who cares, we fork it and move on.
This is hidden in your privacy fight. You are cloaking your political anti US agenda in private money. But its really not about privacy, its about anti society. When you hurt the US dollar, you hurt US citizens. And that appears to be what you desire. We need to parse out the people who have a political agenda from those that simply want private money for everyone worldwide.
My view is ZEC social contract is to ZEC holders. And I think it benefits ZEC holders to extend private money to any citizen of any country in the world by way of ZSA and Zstablecoins that run on the Zcash blockchain. I’m not in this for politics, or to try to hurt or help the goverment of any country I’m in this for privacy for every day people.